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TMI Blog2017 (10) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... ituation, even if there was a disclosure of the aforesaid amount in the return filed by the petitioner under Section 139 of the Act and the assessment was completed under Section 143(3) of the Act, it would not amount to be a full and true disclosure of the material facts necessary for completion of the assessment. We do not deem it fit to interfere with the re-assessment proceedings or impugned notice issued under Section 148 of the Act. - Decided against assessee. - Writ Tax No. 196 of 2016 - - - Dated:- 19-9-2017 - Hon'ble Pankaj Mithal And Hon'ble Umesh Chandra Tripathi, JJ. For the Petitioner : Nishant Mishra For the Respondent : A.S.G.I., C.S.C. I.T., Praveen Kumar ORDER Heard Sri P.K. Jain, Senior Counsel assisted by Sri Nishant Mishra, learned counsel for the petitioner and Sri Praveen Kumar, learned counsel appearing for the respondents. The parties have exchanged pleadings and agree for the final disposal of the petition at the stage of admission itself on the basis of aforesaid pleadings. The petitioner is a duly registered company under the Companies Act, 1956. It was previously assessed in Calcutta and is now being assessed with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial facts necessary for assessment, a notice under Section 148 of the Act is bad in law more particularly when an order of assessment was made under Section 143(3) of the Act. On the other hand, the submission is that the very fact that the entry of ₹ 14,70,15,000/- was admitted to be a bogus entry by Jagdish Prasad Purohit, it constituted sufficient new material to conclude that the income of the assessee had escaped assessment in the relevant year and mere disclosure of the amount so received in the return would not be a full and true disclosure of all material facts for the purposes of assessment. Section 147 of the Act permits the Assessing Officer to assess or re-assess the assessee subject to the provisions of Sections 148 to 153 if he has reasons to believe that any income chargeable to tax has escaped assessment for any assessment year. It further provides that in the case of assessment under Section 143(3) of the Act, no action shall be taken under Section 147 after the expiry of four years from the end of the relevant assessment year, provided income chargeable to tax has escaped assessment by reason of failure on the part of the assessee to make a retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er in his return. He further submits that once the amount has been disclosed in the return and assessment order has been passed under Section 143(3) of the Act, it would not be a case of failure to disclose fully and truly all material facts necessary for assessment so as to permit the Assessing Officer to proceed for re-assessment under Section 147 of the Act. In support of his submissions, he has placed reliance upon the several decisions of the various High Courts as well as that of Supreme Court. The first decision, which he has relied upon, is that of the Division Bench of this Court in the case of M/s Noida Power Company Limited Vs. Commissioner of Income Tax and 2 others, 2017 (8) ADJ 350 (DB), in which one of us (Pankaj Mithal, J.) was a member. The aforesaid decision lays down that for the purposes of re-assessment, two conditions are required to be satisfied. The first is, the Assessing Officer must have reasons to believe that the income of the assessee has escaped assessment in a particular assessment year and; secondly, he must also have reasons to believe that such escapement of income has occurred inter-alia on account of omission on the part of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 148 of the Act held that where admittedly there is no failure on the part of the assessee to make a return or to disclose fully and truly all material facts necessary for assessment, the proviso to Section 147 of the Act would not be attracted and the impugned notice would be treated as barred by limitation. This authority also purports to lay down that for the purposes of issuing a notice under Section 148 of the Act beyond the period of four years, it is necessary to comply with the second condition or to record satisfaction with regard to the failure to disclose full and true material facts relevant for assessment. A similar view has been expressed by another Division Bench of this Court in the case of Amrit Corp Ltd. Vs. Additional Commissioner of Income Tax (2015) 275 CTR 174 (Alld). In this case also, it was reiterated that Section 147 of the Act lays down that where the Assessing Officer has a reasonable belief that income chargeable to tax has escaped assessment for any assessment year, he may assess or re-assess the said assessee but where assessment under Section 143(3) of the Act has been made, no action shall be taken for re-assessment after expiry of four years from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true particulars necessary for the assessment. The Supreme Court in Sheonath Singh Vs. Appellate Assistant Commissioner of Income Tax, Calcutta AIR 1971 SC 2451 was considering the expression reason to believe and observed that it suggest that the belief must be that of an honest and reasonable person based upon reasonable grounds and that the Income Tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour for the purposes of re-assessment. It also laid down that the Court can always examine if the conditions necessary for the re-assessment are satisfied and that there exists any material for the formation of such belief. The aforesaid opinion expressed by the Supreme Court has often been repeated not only by the Apex Court but by most of the High Courts. What would amount to non-disclosure of full and true facts necessary for assessment has been dealt with by the Supreme Court in the case of M/s Phool Chand Bajrang Lal and another Vs. Income Tax Officer and another (1993) 203 ITR 456. The facts of the aforesaid case were identical to that of the case, we are dealing with. In the said case, the assessee had claimed that it h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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