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TMI Blog2021 (4) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal in the case of RMP Holdings Pvt. Ltd. [ 2020 (11) TMI 402 - ITAT NEW DELHI] relied on judgments of the Hon'ble Courts and held that the Assessing Officer has to specifically record reasons with regard to failure of the assessee to disclose fully and truly all material facts. Thus we hereby quash the reassessment proceedings initiated u/s.147. - Decided in favour of assessee. - ITA No. 9542/Del/2019 - - - Dated:- 26-3-2021 - Sh. Bhavnesh Saini , Judicial Member And Dr. B. R. R. Kumar , Accountant Member Assessee by : Sh. Kapil Goel , Adv. Revenue by : Sh. Prakash Dubey , Sr. DR ORDER Per Dr. B. R. R. Kumar , Accountant Member The present appeal has been filed by the assessee against the order of the ld. CIT(A), Faridabad dated 31.10.2019. 2. Following grounds have been raised by the assessee: 1. That on the facts and in the circumstances of the case and in law, ld. CIT-A erred in sustaining the order passed by Ld. AO u/s. 147/143(3) without appreciating that assumption of jurisdiction u/s. 148 was by Ld. AO was in violation of mandatory jurisdictional conditions stipulated under the Act; 1.1 That on the facts and in the circumsta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings; e) Fifthly approval of PCIT by endorsing I am satisfied is mechanical approval not valid in eyes of law; f) Sixthly so called alleged information of investigation wing dated 20.03.2017 is no where placed on records so as to check what was in that information to implicate herein; accordingly orders of Ld. AO and Ld. CIT-A may quashed. 1.3 That on the facts and in the circumstances of the case and in law, ld. CIT-A erred in sustaining the order passed by Ld. AO u/s. 147/143(3) without appreciating that Mr. Pradeep Jindal who is revenue's exclusive and sole witness, was never lawfully cross examination despite repeatedly preyed before Ld. AO Ld. CIT- A thus flouting Apex court verdict in GKN Driveshaft 259 ITR 19 which must nullify reopening proceedings and perverse findings of Ld. CIT-A in para 20 to 24 are contrary to law and facts; 1.4 That on the facts and in the circumstances of the case and in law, ld. CIT-A erred in sustaining the order passed by Ld. AO u/s. 147/143(3) without valid approval from superior authority under the Act namely PCIT which shows serious jurisdictional flaw in reopening made, and accordingly orders of Ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the order passed by Ld. AO u/s. 147/143(3) without appreciating that none of evidence on records as filed by assessee is overruled in accordance with law; 3. That on the facts and in the circumstances of the case and in law, ld. CIT-A erred in not restoring the returned income declared by assessee in its return of income. 4. That on the facts and in the circumstances of the case and in law, ld. CIT-A erred in not deleting the addition made by Ld. AO which was also unlawful and made in violation of principles of natural justice as Mr. Pradeep Jindal is nowhere offered for cross examined to assessee during assessment proceedings despite request made in this regard which is sufficient to strike down the assessment framed. 3. The assessee filed return of income u/s. 139(1) of the Income Tax Act, 1961 on 15.09.2010 for the assessment year 2010-11 for which assessment u/s. 143(3) was completed vide order dated 08.02.2013 making disallowance of ₹ 1,00,000/- on account of general expenses by the ITO, Ward-2(1), Faridabad. 4. The case was reopened u/s. 147 with the prior approval of the ld. PCIT vide letter dated 29.03.2017. The reasons recorded by the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing 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 reassess 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 recompute 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 subsection (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason 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 or to disclose fully and truly all material facts necessary for his assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 and the notice u/s. 148 was issued on 26th March, 2018, therefore, the first proviso of section 147 is applicable to the facts of the present case. The Hon 'Me Supreme Court in the case of NDTV Ltd. Vs. DCIT vide Civil Appeal Mo. 1008 of 2020 dated 3rd April, 2020, has quashed the reassessment proceedings for not mentioning the first proviso neither in the reason recorded nor in the notice issued u/s. 148. The Hon 'Me Delhi High Court in the erne of BPTP Ltd. vs. PCIT, vide Writ Petition No. 13803/2018, order dated 28.11.2019 has held that if the AO has failed to perform his statutory duty, he cannot review his decision and reopen on a change of opinion. It has been held that reopening is not an empty formality. There has to be relevant tangible material for the AO to come to the conclusion that there is escapement of income and there must be a live link with such material for the formation of the belief. Merely using the expression failure on the part of the assessee to disclose fully and truly all material facts is not enough. The reason must specify as to what is the nature of default or failure on the part of the assessee. The Hon'ble Bombay High Court in the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sure of all material facts. 20. In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that became of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We have already 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 Wellntertrade (P.) Ltd.'s we had agreed with the view taken by the Punjab and Hary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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