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2025 (2) TMI 709

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..... e AO in case of a challenge to the reasons, must be able to justify the same based on the material on record. The AO must disclose the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessing that assessment year to establish a vital link between the reasons and the evidence. Court emphasised that this vital link safeguards against the arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavits or making oral submissions. Otherwise, the reasons lacking in material particulars would get supplemented by the time the matter reaches the Court on the strength of the affidavit or oral submissions advanced. Thus, r .....

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..... mar,. PC:- (PER M.S. SONAK J.) 1. Heard learned Counsel for the parties. 2. Rule. Rule is made returnable immediately at the request of and with the consent of learned Counsel for the parties. 3. This Petition concerns the assessment year 2014-2015. 4. The Petitioner, by instituting this Petition, challenges the impugned notice dated 27 March 2021, seeking to reopen the Petitioner's assessment for the assessment year 2014-2015. 5. Admittedly, the impugned notice was issued beyond the prescribed period of four years. Therefore, in terms of the first proviso to Section 147, such reassessment notice could have been issued only for the income chargeable to tax that escaped assessment by reason of the failure part of the assessee, inter .....

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..... ntire premium amount was paid from the Securities Premium Account and not routed through P & L Account. Therefore, the claim of the entire amount of Rs. 54,59,43,438/- should have been denied and amount claimed at Rs. 12,15,52,414/- during the AY 2014-15 should have been added to the total income of the assessee. 3. Further from the clause 25 of the Form 3CD report, it was seen that an amount of Rs.10,57,92,925 was chargeable to tax under section 41 of the IT Act. It was stated that this amount represents provision of written back in different head. This amount should have been offered for taxation. However, this amount was not offered as an income either in P & L Account or Computation of Income statement by the assessee. 4. Further .....

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..... ailure to disclose unaccompanied by any indication regarding the facts that the assessee truly and fully failed to disclose. This is impermissible. 10. In Hindustan Lever Ltd. vs R.B. Wadkar 2004 SCC Online Bom 1265, the Co-ordinate Bench of this Court made the following observations in paragraph 20. "....20. The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be al .....

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..... ubmission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches to the Court, on the strength of affidavit or oral submissions advanced..." 11. Hindustan Lever Ltd. (supra) thus holds that the Assessing Officer must disclose all the reasons for reopening the assessment. This would include a reference to the facts or materials which were allegedly not disclosed by the assessee for the relevant assessment year. The Court held that the Assessing Officer, in case of a challenge to the reasons, must be able to justify the same based on the material on record. The Assessing Officer must disclose the reasons as to which fact or material was not disclosed by the assessee full .....

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..... ee was made out, there is no question of overcoming the statutory bar in seeking to reopen the assessment beyond four years. In Shrenik Kumar Baldota vs. Dy Commissioner Of Income Tax Circle-1(2)(1), Mumbai & Ors 2025 SCC Online Bom 132, we had to reject a similar objection because the reasons furnished to the assessee in the Petition did not mention the audit objections as one of the reasons for reopening. 16. Accordingly, we held it was the settled position that the reopening restrictions must be tested on the touchstone of the reasons as recorded. Nothing could be added or subtracted there. Since neither the reasons recorded nor the order deciding the objections stated that the reopening was done based on the audit objections, the reope .....

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