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TMI Blog2020 (11) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal inter alia plead that the CIT(A) has erred in law and on facts in quashing the Assessing Officer's action initiating sec. 148 r.w.s. 147 proceedings as merely based on conjecture and surmises thereby deleting the sec. 68 addition of unexplained cash credits to the tune of Rs.3,10,00,000/- and commission thereupon of Rs.3,10,000/- @ 1% of the former 69C of the Act; respectively. The CIT(A)'s detailed discussion to this effect reads as under:- "I have further gone through the reasons as recorded by the AO and the same does not reveals that it has been mentioned or held by the AO that there is failure to disclose fully and truly all material facts on the part of the appellant. The relevant portion of the reasons as recorded by the AO are as under:- It is pertinent to mention here that ill this case the assessee has filed return of income for the year under consideration but no assessment as stipulated u/s. 2(40) of the Act was made and the return of Income was only processed u/s 143(1) of the Act. In view of the above provisions of clause (b) of explanation 2 to section 147 are applicable to facts of this case the assessment year under consideration is deemed to be a case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truly all material facts necessary for assessment. When there is no case that there was failure on the part of the assessee to disclose all material facts necessary for assessment which is not whispered in the reasons recorded and for arguments sake even in the reassessment order the proceedings initiated u/s 147 is bad in law in view of various decisions cited as under:- The Allahabad High Court in the case of Pradeshiya Industrial & Investment Corpn. of U.P. Ltd reported 332 ITR 0324 has held that.- Reassessment-Full and true disclosure-Notice after expiry of four years-Where there was full and true disclosure of all material facts during the original assessment and in the return filed by assessee and all the basis of those facts and application o[ mind by the AO, deduction under section 36(1)(viii) was allowed, notice for reopening issued after four years questioning the deduction as wrongly allowed, on the same facts was not valid as complete facts were already submitted. There was no failure of the assessee to disclose full and true facts for allowabilty of deduction under section 36(1)(viii). Admittedly, notice under section 148 was issued after the expiry of four years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment The notice of reassessment was not valid and was liable to be quashed. Where an assessment under sub-section (3) of section 143 has been made for the relevant assessment year, notice under section 148 issued after expiry of four years from the end of the relevant assessment year quashed-because there was no material on record that Income chargeable to tax escaped assessment for such assessment year by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. The Delhi High Court in the case of Global Signal Cables (India) (P) Ltd reported 368 ITR 0609 has held that:-- Reassessment - Full and true disclosure Absence of new material on information-AO reopened assessment under section 148 on the ground that assessee had granted interest free loan, therefore, proportionate disallowance on account of interest and financial charges out of total interest and financial charges debited in Profit and Loss Account should have been made resulting in under assessment of income. Assessee challenged reopening of assessment on the ground that reopening was initiated on the basis of review o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 05- 11-2002 and received by the assessee on 07-11-2002. Under these circumstances, the notice is clearly beyond the period of four years. The reasons recorded by the assessing officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded are required to be read as they were recorded by the assessing officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn bared on reasons not recorded. 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failed to disclose fully and truly all material facts necessary for the assessment. Sustainable - In circumstances of case, three is hardly any case of escapement of income and Secondly, department has failed to prove that assessee has failed to disclose fully and truly all material facts required for assessment of its income therefore, notice issued after 4 years from completion of assessment is quashed. Before issue of notice under section 148, if he wants to issue notice after 4 years from the assessment years, the Income Tax Officer has to satisfy himself that there was an escapement of income to tax in the assessment order and secondly, that the assessee has failed to disclose fully and truly all material facts for assessment of his income. Admittedly, the notice under section 148 has been issued after the expiry of 4 years from the end of the relevant assessment years. If one looks into the assessment order as well as the chart produced by both the counsels, there is hardly any case of escapement of income. Secondly, the department has failed to prove that the assessee has failed to disclose fully and truly all material facts required for assessment of its income. Assumin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mains that it was an instance of regular assessment u/s 143(3) of the Act having been framed on 25.03.2015. We make it clear that we are dealing with assessment year 2012-13 and the Assessing Officer had initiated u/s 148 proceedings vide his corresponding notice served on the assessee on 27.03.2018. We observe in this factual backdrop that once it was a regular assessment and the Assessing Officer had nowhere recorded the assessee's failure in having disclosed fully and truly, all the relevant particulars, sec. 147 first proviso restricting the exercise of the re-opening jurisdiction without satisfying the corresponding embargo, renders the same as not sustainable in the eyes of law. We quote hon'ble apex court's celebrated decision in Commissioner of Income Tax, Bangalore vs. K.Y. Pillah And Sons (1967) 63 ITR 411 (SC) to affirm the CIT(A)'s action quashing the impugned re-opening in entirety as their lordships made it clear long back that such a course of actors may not involve independent examination of the relevant facts at the tribunal's behest. The Revenue fails in its sole substantive grievance as well as in the main appeal ITA No.2396/Kol/2019. 5. Learned authorized r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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