9911796707
TMI Blog2024 (3) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 made his submissions to the revenue audit objection he called for submissions from the Petitioner - each of the said audit objections have been duly explained by the Petitioner s Chartered Accountant through their letters dated 20.02.2018 and 01.11.2019. Petitioner understands that the then Respondent No. 1 had found the said explanation to be satisfactory and accordingly responded to the revenue audit objections. This is because from January, 2019 upto March 2021 that is for almost 26 months, no corrective steps were taken by the Respondent No. 1 in respect of any of the said items . This has not been denied in the affidavit in reply. Thus, we have no hesitation in holding that there was no failure on the part of Petitioner to disclose fully and truly the material facts, nor there was any tangible material with the AO, which could have otherwise justified the reopening of assessment by issuing the notice impugned. In the present case, the notice to reopen assessment does not even remotely make any mention of any tangible material has come to the notice of the AO after passing original assessment order to conclude that there was an escapement of assessment. The AO has failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenditure under different heads relatable to earlier years of which the TDS was already deposited with the Government, or the amount represented write back of a liability for which no deduction was claimed in the past, reduction thereof was claimed as a separate item in the computation while computing business income for the year. 5. Petitioner s ROI was selected for scrutiny. Pursuant to initiation of assessment proceedings, notices dated 7th April 2016 and 24th November 2016 were issued under Section 142(1) of the Act seeking various details from Petitioner, including documents, such as ROI, along with computation thereof, financial accounts, tax audit report and form 3CEB for the previous year relevant to AY 2014-15. Petitioner replied the said notice along with all the documents required vide letter dated 13th May 2016. Petitioner was also required to provide details of capital gains arising on sale of its immovable property along with copy of the sale agreement. The said information was also provided by Petitioner by letter dated 7th December 2016 and 22nd December 2016. The copy of the sale agreement was also annexed thereto. 6. The assessment order dated 26th December 2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9,570/-). 9. Petitioner filed its objections vide letter dated 7th September 2021. The objections of Petitioner were rejected by the Department by order dated 21st December 2021. It is this order along with notice dated 27th March 2021 alleging that income has escaped assessment which is the subject matter of challenge in the present petition. 10. Mr. Pardiwalla, learned counsel for Petitioner, submitted that jurisdictional preconditions have not been fulfilled in the present case, as the belief found by the AO is based on an audit objection without fulfilling an objective criteria. Mr. Pardiwalla submitted, Petitioner had disclosed every detail and document sought by the AO and the original assessment order was passed on the basis of relevant material. There was no failure to disclose any information to the AO and hence, the assessment cannot be reopened on the basis of any such allegation of nondisclosure. 11. Mr. Pardiwalla, also made submissions on the merits of the case. He stated, it was a practice of Petitioner that whenever a debt or advance was doubtful for recovery, a provision was made in the books of accounts, which appeared as a debit to the P L Account. It was also th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was also not provided by Petitioner to the AO during the original assessment proceedings. Mr. Suresh Kumar, thus, urges us to dismiss the Petition. 14. The parties have explained and advanced arguments on the merits of the matter. However, we do not find it necessary to delve into the details of the merits of the assessment since at the outset, in the writ jurisdiction, our examination is limited to the aspects relating to the satisfaction of jurisdictional preconditions to justify reopening of assessment on the ground of income having escaped assessment. The assessment for the AY 2014-15 is admittedly sought to be reopened beyond a period of four years from the end of the relevant assessment year. Further assessment under Section 143(3) of the Act has been completed. Where the assessment is sought to be reopened after the expiry of four years, the proviso to Section 147 of the Act 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 its assessment for that year. We have considered it appropriate to emphasize this aspect because much of the submissions on behalf of the parties in these p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have otherwise justified the reopening of assessment by issuing the notice impugned. In the case of South Yarra Holdings v. Income Tax Officer 16(1)(1)(4), Mumbai [2019]104 taxmann.com 216 (Bom.) this court held as follows: 7. It is a settled position in law that reopening of an assessment has to be done by an Assessing Officer on his own satisfaction. It is not open to an Assessing Officer to issue a reopening notice at the dictate and/or satisfaction of some other authority. Therefore, on receipt of any information which suggests escapement of income, the Assessing Officer must examine the information in the context of the facts of the case and only on satisfaction leading to a reasonable belief that income chargeable to tax has escaped assessment, that reopening notice is to be issued. 18. In the present case, the notice to reopen assessment does not even remotely make any mention of any tangible material has come to the notice of the AO after passing original assessment order to conclude that there was an escapement of assessment. The AO has failed to aver what material fact that Petitioner has failed to disclose fully and truly. It is clearly the very information which was bef ..... X X X X Extracts X X X X X X X X Extracts X X X X
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