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TMI Blog2021 (9) TMI 248X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 31st January 2017, the assessing officer has allowed the set of - Therefore, by no stretch of imagination it can be concluded that there was failure on the part of petitioner to disclose fully and truly the fact that sum has been deducted against the losses claimed under Section 10AA. In the case at hand the assessing officer has not even indicated what was the material fact that was not disclosed truly or fully to him. When the assessment is sought to be reopened after the expiry of period of four years from the end of the relevant year, the proviso to Section 147 stipulates a requirement that there must be a failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year. This stipulation does not govern a notice for reopening within a period of four years. In the case at hand, as noted earlier, there is not even a whisper about what fact was not disclosed. In our view, therefore, the notice to reopen under Section 148 of the said Act itself was issued without jurisdiction. Consequently, the order passed also cannot be sustained. - Decided in favour of assessee. - WRIT PETITION NO. 2762 OF 2019 - - - Dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 9,42,03,318/- was being set off against business loss of ₹ 41,94,04,256/- computed by him. Petitioner filed objections thereafter, which was rejected by a Dispute Resolution Panel. Subsequently, petitioner received a final assessment order dated 31st January 2017. Petitioner thereafter received the impugned notice dated 29th March 2019 under Section 148 of the said Act, proposing to reopen the assessment of petitioner for the assessment year 2012-13. After receipt of this notice, petitioner challenged the final assessment order in appeal before the Income Tax Assessment Tribunal (ITAT). This appeal was decided in favour of petitioner and by this order the ITAT, in effect, accepted the return as revised and filed by petitioner. 5. Thereafter, petitioner received from respondent no. 1 a letter dated 26th August 2019 giving reasons recorded under Section 148 (2) of the Act for reopening the assessment for assessment year 2012-13. Petitioner vide its letter dated 9th September 2019 filed its objections challenging the validity of the reassessment proceedings. The objections were rejected and respondent no.1 passed its order dated 16th September 2019. Reassessment is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8377; 41,94,04,256/included Capital Gain of ₹ 9,42,03,318/-. Still the deduction under section 10A was allowed for an amount of ₹ 41,94,04,256/-. The deduction has to be restricted to the income under the head Profits and Gains of Business of ₹ 32,52,00,938/-. 5. Hence, it is obvious that deduction 10A of the Act wrongly allowed to the extent of ₹ 9,42,03,318/-(amount of income from capital gain). This finding is the basis of reasons to believe that income chargeable to tax has escaped assessment. The facts of the case are covered by explanation 1 to 147 of I.T. Act 1961. 6. In this case a return of income was filed for the year under consideration and regular assessment u/s 143 (3) r.w.s. 144C (13) of the Act was made on 31.01.2017. Since 4 years from the end of the relevant year has expired in this case, the only requirement to initiate proceeding u/s 147 is reason to believe which has been recorded in above Paras. It is pertinent to mention here that in this case the assessment was made as stipulated u/s 2(40) of the act. However as discussed in reason to believe in this case the income chargeable to tax has been under assessed by an amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equently come to the notice of the assessing officer. 8. It is settled, as held in Aroni Commercial Ltd. Vs. Deputy Commissioner of Income Tax-2(1) 2014 (44) Taxmann. Com 304, that the reasons for reopening an assessment has to be tested/examined only on the basis of the reasons recorded at the time of issuing a notice under Section 148 of the said Act seeking to reopen an assessment. These reasons cannot be improved upon and/or supplemented much less substituted by affidavit and/or oral submissions. In the reasons to believe, except for a general statement that the escapement of income is by a reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, there is no mention anywhere that the assessee did not disclose that the deduction under Section 10A was allowed on capital gain during the course of assessment proceedings under Section 143(3) of the Act or that the subsequently it came to the notice of the assessing officer. Infact in the reasons for reopening, it is expressly mentioned that the assessee has added short term capital gain of ₹ 9,42,03,318/-. We would also add that in the assessment orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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