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TMI Blog2024 (1) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... primary facts and it was for him to make necessary inquiry and draw proper inferences. The AO has not discharged his duty and in fact has relied upon financial statements and other documents furnished by Petitioner itself for his reason to believe escapement of income. It cannot be said that income chargeable to tax for the AY under consideration has escaped assessment by reason of the omission or failure on the part of Petitioner to disclose fully and truly all material facts. Thus, it can safely be held that the reopening of assessment of income is clearly on the basis of change of opinion without availability of any tangible new information. Consequently, notice u/s 148 rejecting the objections of Petitioner to the reasons to believe notice and the draft assessment order are quashed. Petition allowed. - K. R. SHRIRAM DR. NEELA GOKHALE, JJ. For the Petitioner : Mr. Nitesh Joshi, with Mr. Aagam Doshi Ms. Shraddha Jadhav i/by Aagam Doshi Co., For the Respondents : Mr. Suresh Kumar. JUDGMENT (PER DR. NEELA GOKHALE, J.) : 1. Rule. Rule is made returnable forthwith. Heard parties by consent. 2. Petitioner has assailed notice dated 23rd March 2021 under Section 148 of the Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit and damages to wharf. 7. By letter dated 28th June 2021, Petitioner submitted detailed objections to the notice dated 13th May 2021. Respondent No. 1, by an order dated 14th February 2022, rejected the objections of Petitioner. On 16th March 2022, draft assessment order was passed. The notice under Section 148 of the Act together with the order rejecting objections and the draft assessment that are assailed in the present petition. 8. Mr. Nitesh Joshi, learned counsel for Petitioner, assails the order on the following grounds: i. As the notice has been issued under Section 148 after the expiry of 4 years from the end of the relevant AY, assessment can be reopened only if income chargeable to tax has escaped assessment on account of failure of assessee to disclose fully and truly all material facts necessary for its assessment for that AY. The four years expired on 31st March 2018 in respect of AY 2013-14. Notice dated 23rd March 2021 is thus beyond limitation. ii. Petitioner s claim for deduction under Section 80-IA of the Act is correctly allowed as compensation for loss of profit and damages to the wharf qualifies as profits derived from business of developing, maintaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopening of assessment is on the basis of verified facts on record and there is no failure to disclose by Petitioner. 11. Moreover, the Apex Court in Gemini Leather Stores v. Incometax Officer [1975] 100 ITR 1 (SC) held that once the AO has in his possession all the primary facts, it is for him to make necessary inquiries and draw proper inference. If the AO fails to do so, it is plainly a case of oversight and cannot be said that income chargeable to tax for the relevant AY has escaped assessment by reason of omission or failure on the part of assessee to disclose fully and truly all material facts. The AO cannot then take recourse to Section 147A of the Act to remedy the error resulting from his own oversight. This has been followed by this Court in Ananta Landmark (P.) Ltd. v. Deputy Commissioner of Income-tax, Central Circle 5(3), Mumbai [2021] 131 taxmann.com 52 (Bombay). 12. Mr. Suresh Kumar, learned counsel appearing for the Revenue, submitted that it is the Revenue audit that raised an audit objection for AY 2013-14 and the view taken by the Department regarding the amount of compensation to be revenue in nature and taxable under the head Income from other sources is an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has held as follows: 8. It is settled law that where the assessment is sought to be reopened after the expiry of a 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. Since in the case at hand, the assessment is sought to be reopened after a period of four years, the proviso to section 147 is applicable. It is also settled law that the Assessing Officer has no power to review an assessment which has been concluded. If a period of four years has lapsed from the end of the relevant year, the Assessing Officer has to mention what was the tangible material to come to the conclusion that there is an escapement of income from assessment and that there has been a failure to fully and truly disclose material fact. After a period of four years even if the Assessing Officer has some tangible material to come to the conclusion that there is an escapement of income from assessment, he cannot exercise the power to reopen unless he discloses what was the material fact which was not truly and fully disclosed by the assessee..... ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 148. Even where the jurisdictional facts prescribed under Section 147 exist and all conditions laid down under section 147 and the proviso thereto are satisfied, the notice under section 148 can be issued only after the Assessing Officer has recorded his reasons for doing so under sub-section (2) of Section 148 and has further obtained the necessary sanction for issuance of the notice as required under Section 151 of the Act...... The restriction.. of a period of four years, In the present case, the reasons which have been recorded by the Assessing Officer for reopening of the assessment do not disclose that the assessee had failed to disclose fully and truly all material facts necessary for the purpose of assessment. No doubt in the last paragraph of the reasons, the first respondent has stated: I am satisfied that due to furnishing the false particulars of the income by way of incorrect certificate which means failure on the part of the assessee to disclose fully and truly all material facts required for the assessment, income of Rs. 6,10,10,272/- had escaped assessment. The said statement is clearly made only as an attempt to take the case out of the restriction imposed b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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