9911796707
TMI Blog2018 (9) TMI 2151X X X X Extracts X X X X X X X X Extracts X X X X ..... s and his findings has not been established by him. This vital link is the safeguard against arbitrary reopening of the concluded assessment. The Reasons recorded cannot be supplemented by way of further observations in the assessment order or in any other manner. The validity of the reopening can be examined on the basis of Reasons alone and not in supplementary material. Reopening has been done without complying with the mandatory jurisdictional condition precedent as stipulated in first proviso to section 147. Thus, reopening is invalid on this ground and the CIT (A) rightly decided this legal issue challenged before him We concur with the CIT (A) that the AO without satisfying the jurisdictional pre-condition as stipulated in the first proviso to sec. 147 of the Act lacks jurisdiction to reopen the original assessment completed u/s. 143(3) after four years. Therefore, all proceeding subsequently made is null in the eyes of law and so, Ld. CIT (A) rightly annulled the reopening of regular assessment u/s. 148/147 and subsequent reassessment order of the AO is, therefore, null in the eyes of law. Decided against revenue. - Shri A. T. Varkey, JM And Shri M. Balaganesh, AM For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act of Rs. 2,04,42,842/- and also towards the excess claim of managerial salary of Rs. 2,50,000/-. Aggrieved, revenue is before us. As aforestated, we will deal with the legal issue of Ld. CIT(A) s action of annulling the AO s reopening of regular assessment itself. 4. We have heard rival submissions and gone through the facts and circumstances of the case. We note that the original/regular assessment of the assessee was framed u/s. 143(3) of the Act on 26.12.2008 wherein the assessee while claiming deduction u/s. 80IA of the Act claimed the income from Road Median which was allowed by the AO. However, in that proceeding, he disallowed the claim of assessee in respect of Bus Shelter and Foot Overbridge expenditure u/s. 80IA of the Act. Aggrieved by the order of AO, the assessee preferred an appeal before the Ld. CIT(A), who was pleased to allow the same, which order of the Ld. CIT (A) has been upheld by the Tribunal. Meanwhile, after four years after the regular assessment u/s. 143(3) of the act, the AO had reopened the assessment. 5. We note that there are two separate reasons recorded to reopen the regular assessment. In order to adjudicate the legal issue raised before us by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt of Rs. 1802960 has been shown as income under 80IA which has been earned from street light kiosk. Thus it is apparent that though the assessee had claimed for development operating maintenance of road medians those were not integral part of a new infrastructure facility. Moreover the only revenue of the assessee was merely from advertising not from developing or operation or maintenance of a new infrastructure facility as explained in section 80IA of I. T. Act. From 1.04.02 Infrastructure facility includes those facilities as specifically included in the I.T. Act and no other facility for the public could be included in it. Thus it appears that the assessee was not eligible for any deduction u/s. 80IA. Hence allowance of deduction of Rs. 20442842 u/s 80IA from advertising on road medians in the assessment was irregular. The mistake resulted in underassessment of Business income of Rs. 20442842 involving undercharge of tax of Rs. 6881060. 6. The second reason for reopening is found placed at page 78 of paper book which is as under: Scrutiny assessment for the year has been completed on 26.12.08 at an income of Rs. 31009060 and tax of Rs. 10437650. A demand of Rs. 2886476 has b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 assessment, for that assessment year : (Emphasis given by us) 8. Reading of the proviso to section 147 makes it clear that if the Assessing 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 section 147, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the concerned assessment year. However, where an assessment under subsection (3) of section 143 has been made for the relevant assessment year, no action can be taken under section 147 after the expiry of four years from the end of the relevant assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not keep the assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or making an oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches the court, on the strength of the affidavit or oral submissions advanced. (Emphasis given by us) 10. Thus, as discussed above, while recording Reasons , it is incumbent upon the AO to firstly make an allegation in the Reasons recorded and then also to make out a case that there was a failure on the part of the assessee in disclosing fully a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hing has been recorded by the AO in the Reasons about any failure on the part of the assessee to disclose fully and truly all material facts necessary for the framing of original assessment. It has nowhere been mentioned by the AO which fact or material was not disclosed by the assessee. Thus, vital link between Reasons and his findings has not been established by him. This vital link is the safeguard against arbitrary reopening of the concluded assessment. The Reasons recorded cannot be supplemented by way of further observations in the assessment order or in any other manner. The validity of the reopening can be examined on the basis of Reasons alone and not in supplementary material. Thus, taking into account all the facts and circumstances of the case, we find that the reopening has been done without complying with the mandatory jurisdictional condition precedent as stipulated in first proviso to section 147. Thus, reopening is invalid on this ground and the Ld. CIT (A) rightly decided this legal issue challenged before him. Therefore, we concur with the Ld. CIT (A) that the AO without satisfying the jurisdictional pre-condition as stipulated in the first proviso to sec. 147 of ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
