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TMI Blog2024 (11) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... ning of the assessment in the facts of the present case is bad in law, because the Assessing Officer has reopened the assessment beyond 4 years from the end of the relevant A.Y without any allegation, on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. The learned CIT (A) without considering the relevant facts, simply upheld the reopening of the assessment. Thus, we set aside the order of the learned CIT (A) and quash the re-assessment and passed by the Assessing Officer u/s 143(3) r.w.s. 147 - Decided in favour of assessee. - Shri Vijay Pal Rao, Vice-President And Shri Manjunatha, G. Accountant Member For the Assessee : Shri A.V.Raghuram, Advocate For the Revenue : Shri K.N. Suresh Babu, DR ORDER PER MANJUNATHA, G. A.M This appeal filed by the assessee is directed against the order, dated 01/08/2024 of the learned CIT (A)-NFAC Delhi, relating to A.Y.2014-15. 2. The brief facts of the case are that, the assessee, an individual, filed his return of income for the A.Y 2014-15 on 31/03/2015 declaring total income of Rs. 8,33,89,200/-. The case has been selected for scrutiny and the assessment has been completed u/s 143(3) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se, being incurred for the improvement of the asset, thus, recomputed indexed cost of acquisition while computing Long-Term Capital Gain from sale of property by considering amount of expenditure incurred for improvement of Rs. 96,18,402/- and disallowed 30% of said amount for want of bills vouchers and has recalculated improvement at Rs. 67,32,881/-. Finally, the Assessing Officer has computed the Long-Term Capital Gain at Rs. 9,79,61,188/- and made additions towards difference to the total income of the assessee. 3. Being aggrieved, the assessee preferred an appeal before the learned CIT (A). Before the learned CIT (A), the assessee challenged the reopening of the assessment on the ground that the reopening of the assessment is erroneous in law, void ab initio because, the Assessing Officer had reopened the assessment, merely on change of opinion , without there being any fresh tangible material, which come to the possession of the Assessing Officer, subsequent to the completion of the original assessment u/s 143(3) of the Act. The learned CIT (A), after considering the relevant submissions of the assessee and also taken note of various facts gathered during the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 43(3) of the Act and during the course of assessment proceedings, the Assessing Officer has considered the issue of computation of Long-Term Capital Gain and consequent deduction towards indexed cost of acquisition. The assessee has filed all evidences and also explained how the indexed cost of acquisition has been computed. The Assessing Officer, after considering the relevant facts has accepted the claim of the assessee towards indexed cost of acquisition. Further, on very same issue, the Assessing Officer issued notice u/s 154 for rectification of mistake on computation of indexed cost of acquisition and there is no idea what happened to the rectification proceedings. Therefore, when rectification proceedings are pending, the Assessing Officer cannot reopen the assessment u/s 147 of the Act, on the very same issue. The learned Counsel for the assessee further submitted that, the Assessing Officer has reopened the assessment, on mere change of opinion, which is evident from the assessment order passed by the Assessing Officer where the indexed cost of acquisition has been considered, on the basis of details submitted by the assessee. If we go by the reasons recorded for reopening ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Proviso to section 147 of the I.T. Act, 1961, deals with the reopening of the assessment, when the original assessment has been completed u/s 143(3) of the Act and, as per the said proviso, where an assessment u/s 143(3) has been made for the relevant A.Y, no action shall be taken under this section, after expiry of 4 years from the end of the relevant A.Y, unless any income chargeable to tax has escaped assessment for such A.Y, by reason of the failure, on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, for that A.Y. At the same time, it is also relevant to keep in mind, Explanation 1 to section 147 of the Act, and as per said Explanation, production before the Assessing Officer of accounts books or other evidences, from which material evidence with due diligence has been discovered by the Assessing Officer, will not necessarily amount to disclosure within the meaning of the foregoing proviso. From a combined reading of proviso to section 147 of the Act, and (Explanation-1) provided therein, it is abundantly clear that, mere production of books of account, would not suffice to hold that, there is a disclosure of material fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce is not enough, and that there may be an omission or failure to make a full and true disclosure if some material fact necessary for the assessment lies embedded in that evidence which the assessee can uncover but does not. If there is such a fact, it is the duty of the assessee to disclose it. The evidence which is produced by the assessee discloses only primary facts, but to interpret the evidence, certain other facts may be necessary. Thus, questions of status, agency, benami nature of transactions, the nature of trading and like matters may not appear from the evidence produced, unless disclosed. If it be merely a question of interpretation of evidence by an Income-tax Officer from whom nothing has been hidden and to whom everything has been fully disclosed, then the assessee cannot be subjected to section 34, merely because the Income-tax Officer miscarried in his interpretation of evidence. But it is otherwise, if a contention which is contrary to fact, is raised and the Income-tax Officer is set to discover the hidden truth for himself In the latter case, there is suppression of material fact, or, in other words, that lack of full and true disclosure which would entitle act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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