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TMI Blog2021 (4) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... r the assessment. Under these circumstances, we have to hold that the re-opening of assessment is bad in law. Thus we hold that the re-opening is bad in law. In the result, the impugned assessment order is hereby quashed. X X X X Extracts X X X X X X X X Extracts X X X X ..... ses' were debited to the P&L A/cs which included ₹ 21,06,50,000/- towards 'VAT' adjustment (Note 2.14 on accounts for the year ended 31/03/2008). Out of the aforesaid amount, ₹ 10,68,90,000/- relating to earlier years was duly added back to the income. However, Note 2.16 of the Notes on accounts for the A. Y. 2009-10 revealed that VAT adjustment of ₹ 21,06,50,000/- included provisions of ₹ 17,61,80,000/-. A provision is not an allowable expenditure and required to be disallowed and added back to income of the A.Y. 2008-09. Since, ₹ 10,68,90,000/- was already added back by you, therefore the balance amount of ₹ 6,92,90,000/- which was not added back has escaped assessment and require to be added back." 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f all material facts. The jurisdictional requirement for carrying out the reassessment, after the expiry of period of four years, is not fulfilled in the present case." 4.5. The Hon'ble Bombay High Court in the case of Sound Casting (P) Ltd. v. Dy. CIT reported in 250 CTR 119 (Bom.) (HC), has held that there is no allegation in the reasons which have been disclosed to the assessee that there was any failure on his part to fully and truly disclose material facts necessary for assessment and therefore reopening beyond four years was not valid. (A.Y. 2005-06). 4.6. The Hon'ble Delhi High Court in the case of CIT vs. Orient Craft Ltd. reported in [2013] 354 ITR 356 (Del.)(HC) has held as follows: "The reasons recorded by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ason of the failure on the part of the assessee: (i) 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 (ii) to disclose fully and truly all material facts necessary for his assessment for that assessment year. Condition (a) is admittedly satisfied inasmuch as the original assessment was completed under section 143(3) of the said Act. Condition (b) deals with a special kind of escapement of income chargeable to tax. The escapement must arise out of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148. This is clearly not the case here because the petitioner d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eady mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking action after the said four year period remains unfulfilled. In our recent decision in Wel Intertrade Private Ltd (supra) we had agreed with the view taken by the Punjab and Haryana High Court in the case of Duli Chand Singhania (supra) that, in the absence of an allegation in the reasons recorded that the escapement of income had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, any action taken by the Assessing officer under section 147 beyond the four year period would be w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t does not fulfil the requirement of the Proviso to Section 147 of the Act, and as no tangible material has come to the possession of the Assessing Officer, we quash the assessment and allow the appeal of the assessee. 5. In the result, the appeal of the assessee is allowed. 5.1. Applying the propositions of law laid down in the above referred case-law to the facts of the case on hand, I hold that the re-opening of assessment is bad in law. 6. In the result appeal of the assessee is allowed." 4.2. Respectfully following the propositions of law laid down in the above case laws to the facts of this case we hold that the re-opening is bad in law. In the result, the impugned assessment order is hereby quashed. 5. In the result, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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