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TMI Blog2017 (3) TMI 1513X X X X Extracts X X X X X X X X Extracts X X X X ..... l material facts necessary for the assessment. We, therefore in view of our discussion above and totality of facts, are of the considered view that reassessment proceedings under Section 147 are bad in law and liable to be quashed - Decided in favour of assessee. - ITA No. 2681/Ahd/2013 - - - Dated:- 28-3-2017 - SHRI S.S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Assessee : Shri C.N. Shah, AR For The Revenue : Shri Sanjeev Kumar, Sr DR ORDER PER MANISH BORAD, ACCOUNTANT MEMBER: This appeal of the assessee for Assessment Year 2003-04 is directed against the order of the CIT(A)-XI, Ahmedabad vide appeal No.CIT(A)- XI/157/Cir-5/10-11 dated 10.09.2013, arising out of order under Section 143(3) r.w.s. 147 of the Income-tax Act, 1961 (hereinafter referred to as the Act ) dated 15.09.2010 framed by the DCIT, Circle-5, Ahmedabad. 2. Assessee has raised following grounds of appeal:- 1. The C.I.T. (Appeals) ought to have held that section 147/148 notice dated 30/03/2010 is bad in law as also on facts and so also the assessment order dated 15/09/2010 because the assessee had fully and truly disclosed all material facts ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on 30.03.2010 notice u/s 148 was issued for reopening of assessment and reassessment proceedings under Section 147 of the Act were commenced. Assessee challenged this reopening of assessment before the CIT(A) but could not succeed as ld. CIT(A) was of the view that appellant failed to fully disclosure all necessary facts for assessment and therefore, assessee s case was a fit case for attracting provisions of Section 147. Ld. CIT(A) further held that, in absence of complete details on the part of the assessee, the plea relating to change of opinion cannot be considered acceptable. 6. Aggrieved, the assessee is now in appeal before the Tribunal. 7. Ld. Counsel for the assessee vehemently argued supporting the submissions made before the lower authorities and further, relying on the decision of Co-ordinate Bench in assessee s own case in ITA No.2195/Ahd/2009 dated 05.05.2011 relating to AY 2001-02, submitted that the reopening proceedings were bad in law. Ld. AR also added that during the course of assessment u/s 143(3) of the Act, information were called for vide notice u/s 142(1) of the Act dated 02.09.2005, raising 25 questions which, inter alia, included question No.8, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further observe that Co-ordinate Bench, adjudicating similar issue in assessee s own case for AY 2001-02 in ITA No.2195/Ahd/2009, has quashed the re-assessment proceedings and held in favour of the assessee, by observing as follows:- 7. We have considered the rival submissions and perused the material on record. In our considered view the reopening of the assessment is bad in law. For the sake of convenience we reproduce section 147 and proviso thereto:- 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to the provisions of sections 148 to 153 assess or re-assess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y for assessment Hon. Allahabad High Court in CIT vs. Pradeshiya Industrial and Investment Corporation of Uttar Pradesh Ltd (2011) 332 ITR 324(All) has observed as under :- Admittedly, notice under section 148 of the Act was issued after the expiry of four years. The notice under the proviso of section 147 of the Act can be issued after the expiry of four years only in case where income chargeable to tax has escaped assessment by reason of the failure on the par! of the assesses to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. From the perusal of the reason recorded it is apparent that no case has been made out that the assesses had failed to disclose fully and truly all material facts necessary for his assessment and no observation has been made in this regard, On the basis of the same material which was available on record, the assessing authority was of the view that the deduction had been wrongly allowed under section 36(1)(viii) of the Act. The Tribunal observed that the assessee had furnished th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be reopened after expiry of four years on the ground that the claim of deduction u/s 80IB(10) included ineligible items of other income such as society deposits, street parking charges, sundry balances, etc. Hon. Bombay High Court in the case of Bhavesh Developers vs. A.O. Others (supra) observed as under :- Held, allowing the petition, that ex facie, the reasons which had been disclosed to the assessee would show that the inference that the income had escaped assessment was based on the disclosure made by the assessee itself. The reasons showed that the finding was based on the details filed by the assessee and from the profits and loss account. Therefore, it was impossible for the Assessing Officer to even draw the inference that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for assessment year 2002-03. Significantly, the reasons that had been disclosed to the assessee did not contain a finding to the effect that there was a failure to fully and truly disclose all necessary facts, necessary for the purpose of assessment. In these circumstances, the condition precedent to a valid exercise of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO to believe that expenditure so incurred was capital in nature, new view so taken for reopening of assessment would be only a change of opinion. Earlier same expenditure was held as revenue in nature and now considered as capital would be akin to reviewing his own decision on the subject. Hon. Bombay High Court in the case of ICICI Prudencial Life Insurance Co. Ltd. vs. ACIT (2010) 325 ITR 471 (Bom) also held that when there is no material on record and without there being any allegation of failure of the assessee to disclose such material fact, assessment cannot be reopened after four years. Hon. Gujarat High Court in Inducto Ispat Alloys Ltd. vs. ACIT (2010) 320 ITR 458 (Guj) and Nikhil K. Kotak vs. Mahesh Kumar (2009) 319 ITR 445 (Guj) also held that where the period of four years has expired from the end of relevant Asst. Year the proviso to section 147 would come into play. It stipulates three conditions and one of those conditions is showing omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. When we go through the reasons recorded and as mentioned above we do not find any reference to such failure o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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