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TMI Blog2015 (8) TMI 414X X X X Extracts X X X X X X X X Extracts X X X X ..... t case, the AO has picked up the issue of written off amount of ₹ 23,43,179 pertaining to amount advanced to M/s Shonkh Technologies International Ltd. and the amount forfeited by Greater Noida Industrial Authority towards aborted project. As we have noted above, the assessee furnished entire details on this issue vide its submissions dated 26.2.2006 during the original assessment proceedings which have been placed by the assessee in its paper book pages 83 to 90. In this situation, the AO was not correct and justified in holding that the assessee did not truly and fully disclose all material facts relevant to the impugned issue of written off amount of ₹ 23,43,179/- during original assessment proceedings. Therefore, the case of the AO goes out of the ambit of first proviso to section 147 of the Act. CIT(A) was quite justified and correct in granting relief for the assessee by allowing legal contention and ground of the assessee against issuance of notice u/s 148 of the Act beyond the prescribed period of four years specifically when there was no failure on the part of assessee to disclose fully and truly material facts relevant to the issue of written off debts - De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duties by not adding back the same into his computation of income as per the IT Act. Thus the income chargeable to tax has escaped assessment and to reassess such income chargeable to tax which has come to notice now and was of the failure on the part of the assessee by not adding back the same into the computation of income along with return filed by him and the assessee company fails to disclose fully and truly the above material facts necessary for the assessment. I have therefore, reason to believe that the income chargeable to tax has escaped assessment for the A. Y. 2003-04. Issued notice u/s 148. 3. The assessee objected to the reopening of assessment but the AO dismissed the objection of the assessee and finalised the reassessment order u/s 143(3) /148 of the Act on 19.11.2010 by making a sole disallowance of amount written off treating the same as capital expenditure amounting to ₹ 23,43,179/-. Being aggrieved by the above reassessment order, the assessee preferred an appeal before the CIT(A) which was allowed on legal grounds. Now, the aggrieved revenue is before this Tribunal in this second appeal with the sole legal ground as reproduced h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued notice on 4.9.2009 which is a juridical error. Ld. DR also pointed out that the CIT(A) was incorrect in holding that there was no failure on the part of assessee to fully and truly disclose the material facts in the return of income as well as during assessment proceedings, therefore, the order of the CIT(A) may kindly be set aside by restoring that of the AO. 4. Replying to the above, ld. Counsel of the assessee pointed out that the assessee submitted all material facts in the return of income as well as during the assessment proceedings before the AO pertaining to the claim of the amount written off. Ld. counsel has also drawn our attention towards assessee s submissions dated 23.2.2006 during assessment proceedings available at pages 83 to 90 of the assessee s paper book wherein at page 87, there was a detail of debts written off during the financial year under consideration. On perusal of relevant part of submission of the assessee dated 23.2.2006 pertaining to bad debts, we observe that the assessee has submitted names and relevant amount of three parties and further explained that in the first two cases, company has issued legal notices and against the third party, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s dated 14th September, 2005 and 14th October, 2005. The petitioner was called upon and asked to furnish names and addresses of the sundry creditors and since when the amount was outstanding. The petitioner was also asked to explain details of each creditor. There is nothing on record and it is not even the stand of the petitioner that those details in respect of all parties were furnished. If there is no disclosure and details were not furnished, there cannot be full and true disclosure. In W.P.(C) No. 9036/ 2007, Honda Siel Power Products Ltd. vs. The Deputy Commissioner of Income Tax and Anr ., decision dated 14th February, 2011, we had held: 10. ......The term failure on the part of the assessee is not restricted only to the income-tax return and the columns of the income-tax return or the tax audit report. This is the first stage. The said expression failure to fully and truly disclose material facts also relate to the stage of the assessment proceedings, the second stage. There can be omission and failure on the part of the assessee to disclose fully and truly material facts during the course of the assessment proceedings. This can happen when the assessee does n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y all material facts 92 necessary for his assessment, for that assessment year 8. We further observe that the CIT(A) granted relief for the assessee on legal grounds with following observations and conclusion:-- 5 . Re: Ground of Appeal Nos. 1.3 1.4: Barred by limitation in terms of proviso to section 147, there being no failure on part of the appellant to disclose material facts. The appellant has submitted that there has been no failure on its part to disclose the material facts due to which the AO could have started proceedings u/s 147 after the end of four years from the AY 2003-04 i.e. proceeding could have initiated by way of issuing of notice by 31.3.2008; in this case the AO had issued the notice dated 4.9.2009 which is not as per law. A number of citations have been referred to in support of the aforesaid contention e.g. CIT vs Tirath Ram Ahuja(HUF)306 ITR 173(Del) and Haryana Acrylic Mfg. Co. vs CIT 308 ITR 38(Del). 5.1 The issue involved and the submissions made by the appellant have been considered. In view of the factual position and failure on the part of the AO to bring on record any lapse on the part of the assessee to disclose truly and fully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. wherein their lordships referred to its earlier judgment in the case of Honda Siel Power Products Ltd. vs DCIT dated 14.2.2011 in WP (Civil) No.9036/2007 wherein it was held that there can be omission and failure on the part of assessee to disclose fully and truly material facts during the course of assessment and this can happen when the assessee does not disclose or furnish to the AO complete and correct information and details pertaining to the issue alleged by the AO. In the present case, at the cost of repetition, we have no hesitation to hold that the assessee has furnished and disclosed fully and truly all material facts pertaining to the issue of written off amount of ₹ 23,43,179/- as picked up and alleged by the AO while recording reasons for issuance of notice u/s 147 and 148 of the Act. Therefore, we respectfully hold that in our humble understanding, the ratio laid down by the Hon ble High Court of Delhi in the case of Dalmia Pvt. Ltd. vs CIT does not support the case of the ld. DR and on the other hand, the ratio laid down by Hon ble Jurisdictional High Court of Delhi in this case supports the contention and case of the assessee in the present case in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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