9911796707
TMI Blog2019 (1) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... y limitation - decided in favour of assessee. - ITA No.1111/Del/2016 - - - Dated:- 26-12-2018 - Shri R.K. Panda, Accountant Member And Ms Suchitra Kamble, Judicial Member For the Assessee : Shri Vikas Srivastava, Advocate Shri Mayank Aggarwal, Advocate For the Revenue : Shri Anil Katoch, Sr.DR ORDER PER R.K. PANDA, AM: This appeal by the assessee is directed against the order dated 21st August, 2013 of the CIT(A)-8, New Delhi, relating to Assessment Year 2006-07. 2. The grounds raised by the assessee are as under:- 1. The order passed by the Learned CIT(Appeals) ('Ld. CIT(A)'), confirming the assessment order passed by Learned AO ('Ld. AO') under section 143(3) read with section 147 of the Income Tax Act, 1961 ('the Act'), is bad in law and on the facts and circumstances of the case. 1. The Ld. CIT(A) has erred in upholding the re-assessment proceedings initiated by the Ld. AO, after expiry of four years from the end of the relevant assessment year, even though the appellant had disclosed fully and truly all material facts during assessment under section 143(3) of the Act. 2. The Ld. CIT(A) has erred in uphold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. The mistake resulted in over assessment of loss and under assessment of income by ₹ 1,07,78,050/- and ₹ 55,26,824/- respectively involving tax effect of ₹ 64,92,799/-. In view of the above, I have reasons to believe that income of ₹ 1,63,04,874/- has escaped assessment under the meanings of section 147 of the Income Tax Act, 1961. 4. Subsequently, the Assessing Officer determined the total income of the assessee at ₹ 55,26,824/-. After restricting the brought forward loss of ₹ 1,80,15,267/-, he determined the taxable income at nil. 5. Before the CIT(A), the assessee challenged the validity of the reassessment proceedings as well as the addition on merits. However, the ld.CIT(A) rejected both the issues by observing as under:- I have perused the assessment order, written submission of the AR, grounds of appeal and discussed the matter with the AR very carefully. The ARs have two issues on this case. One legal issue is that the AO had reopened the case on the basis of audit objection and not done any preliminary inquiry before reopening the case u/s 148 of the IT Act. The ARs objected such reopening on the basis of audit ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then it should be written on value of the sales of the watch at the time of sale. There is no need of making such provision for closing stock any more. Hence, the addition made by AO of ₹ 1,63,04,874/- is hereby confirmed. 7. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 8. The ld. counsel for the assessee, at the outset, submitted that the assessment has been reopened after a period of four years from the end of the relevant assessment year. Referring to the reasons recorded u/s 147 of the IT Act, he submitted that there is no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment. Relying on various decisions he submitted that when there is no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment, such reassessment proceedings are void ab initio . The ld. counsel for the assessee further submitted that the assessment was reopened on the basis of audit objections. Therefore, in view of various decisions the reopening of the assessment is null and v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach to the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6. Secondly, the Court finds that at least in respect of one of the issues, viz., payment of interest on fixed deposits, the Assessees drew the attention of the Assessing Officer ( AO ‟ ) to the fact that the amount has already been offered to tax and tax had been paid and yet, in the order disposing of the objections, the AO is completely silent as regards this objection. 7. The Court is of the view that notwithstanding several decisions of the Supreme Court as well as this Court clearly enunciating the legal position under Section 147/148 of the Act, the reopening of assessment in cases like the one on hand give the impression that reopening of assessment is being done mechanically and casually resulting in unnecessary harassment of the Assessee. 8. The Court would have been inclined to impose heavy costs on the Revenue for filing such frivolous appeals but declines to do so since the appeals are being dismissed ex parte. However, the Court directs the Revenue through the Principal Chief Commissioner of Income Tax (Pr CIT) to issue instructions to the AOs to strictly adhere to the law explained in various decisions of the Supreme Court and the High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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