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TMI Blog2025 (3) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... due to failure on the part of the assessee to disclose fully and truly all material facts, and vide order disposing the assessee's objections, the AO tried to improve upon the reasons by making the allegation, which is completely impermissible.
From the perusal of the reasons recorded there is not even a mention of any new or tangible material which formed the basis to believe that income chargeable to tax has escaped assessment during the year under consideration. We find that the entire edifice of the impugned re-assessment proceedings is based on the perusal of case records which were already considered during the scrutiny assessment proceedings concluded u/s 143(3) of the Act.
This aspect is further evident from order passed u/s 143(3) r/w section 147, wherein the AO completely denied the claim made under section 90, after noting that partial relief was granted to the assessee vide order dated 16/03/2015 passed u/s 143(3) of the Act.
Thus re-assessment proceedings initiated by the AO, in the present case, are bad in law on more than one count and are not in conformity with the provisions of section 147 - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... years from the end of the assessment year though there was no failure on part of the Appellant to disclose all material facts for his assessment. 7. In the facts of the matter and in law, the Learned Commissioner Income Tax (Appeal) erred in upholding the validity of the reassessment proceedings and the denial of the double taxation relief of Rs.1,40,00,000/- withheld at source in the UK. Infact, for the same Assessment Year prior to the issue of notice u/s 148, the CIT(A) had already directed the assessing officer to verify the same TDS deduction. However, before doing the same, the assessing officer reopened the Assessment on the same issue. 8. In the facts of the matter and in law, the Learned Commissioner Income Tax (Appeal) erred in not allowing the double taxation relief of Rs. 2,16,17,234/- claimed by the appellant being a part of the tax paid in the UK. 9. In the facts of the matter and in law, the Learned Commissioner Income Tax (Appeal) erred in not appreciating that the reopening of an assessment cannot be made on an issue that was already the subject matter of regular assessment and also an appeal as this would tantamount to change of opinion. 10. In the facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee was selected for scrutiny and statutory notices under section 143(2) and section 142(1) of the Act along with a questionnaire were issued and served on the assessee. The AO, vide order dated 16/03/2015 passed under section 143(3) of the Act, assessed the total income of the assessee at Rs. 84,17,99,923, after making certain additions/disallowances. 5. Subsequently, after the expiry of 4 years from the end of the relevant assessment year, notice under section 148 of the Act was issued on 31/03/2019. In response to the aforesaid notice, the assessee filed his return of income on 29/04/2019. The AO, vide order dated 30/12/2019 passed under section 143(3) r/w section 147 of the Act, assessed the total income of the assessee at Rs. 84,17,99,920, after completely denying the claim made under section 90 of the Act. 6. In its appeal before the learned CIT(A), the assessee, inter-alia, challenged the reopening of the assessment. However, the learned CIT(A), vide impugned order, dismissed the ground so raised by the assessee by observing as follows: - "7. Ground Nos. 1: This ground relates to the reopening of assessment u/s. 147 of the Act. 7.1. As far as reopening is conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso." 7.6. Thus, the failure on the part of the appellant has to be assessed from the facts of each case. In the instant case, it was about undue availment of foreign tax credit. The AO had a prima-facie view that excessive relief had been claimed by the appellant and that the appellant had not fully and truly disclosed the particulars relevant for the assessment. Hence, the AO's action cannot be faulted with. 7.7. Explanation 2 to Sec. 147 as it existed then, reads as under:- "Explanation 2-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- (a) ................ (b) ............... (c) .............. (c) where an assessment has been made, but- (i) income chargeable to tax has been underassessed; or ii) such income has been assessed at too low a rate, or iii) such income has been made the subject of excessive relief under this Act, or (iv) excessive loss or depreciation allowance or any other allowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Chand Gupta vs PCIT. Hence, this part of argument of the appellant stands REJECTED. 7.11. Having considered the entire facts and judicial position on the issue, it does appear that the assessee has not disclosed fully and truly all material facts necessary for the assessment and there has been a failure on the part of the assessee, warranting re-assessment." Being aggrieved, the assessee is in appeal before us. 7. During the hearing, the learned Authorised Representative ("learned AR"), at the outset, inter-alia, submitted that there is no allegation in the reasons recorded for initiating the re-assessment proceedings that income has escaped assessment due to failure of the assessee to disclose fully and truly all material facts. 8. On the other hand, the learned Departmental Representative ("learned DR") vehemently relied upon the orders passed by the lower authorities and submitted that proceedings under section 147 of the Act have correctly been initiated by the AO in the present case. 9. We have considered the submissions of both sides and perused the material available on record. In the present case, the return of income filed by the assessee was selected for scrutiny ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 years from the end of the relevant assessment year, in case where an assessment under section 143(3) of the Act has been made. 11. At this stage, it is relevant to analyse the provisions of the proviso to section 147 of the Act, as it stood during the year under consideration, which reads as follows: - "Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment 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:" 12. Thus, as per the proviso to section 147 of the Act, in a case where the assessment was completed under section 143(3), re-assessment under section 147 can be done after the expiry of 4 years from the end of the relevant assessment year, only if income has escaped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red 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 allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach to the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of mind of the Assessing Officer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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