The Chennai Bench of Income Tax Appellate Tribunal (ITAT) has held that the reopening beyond 4 years of original assessment without failure to disclose the material facts was bad in law.
The assessee, Crown Real Estate Pvt. Ltd was a resident domestic company engaged in the business of real estate and aquaculture. The assessee filed its return of income for the relevant assessment year 2013-14 on 01.10.2013 and subsequently the same was revised on 06.02.2014.
This return of income was selected for scrutiny and in view of the details provided by assessee and explanation offered and material filed were considered and assessment was completed under Section 143(3) of the Income Tax Act originally vide order dated 15.03.2016 by the Assessing Officer (AO).
Subsequent to completion of assessment under Section 143(3) of the Income Tax Act, 1961 the AO recorded the reasons under Section 147 of the Income Tax Act for issuance of notice under Section 148 of the Income Tax Act and accordingly, notice under Section 148 of the Income Tax Act dated 20.03.2019 was issued calling for the return of income on the ground that for the assessment year 2013-14, there was escapement of income.
The assessee replied that it had already filed return of income under Section 139(1) and same was revised under Section 139(5) of the Income Tax Act, which was scrutinised vide assessment order passed dated 15.03.2016 under Section 143(3) of the Act, may be considered as return filed in response to notice under Section 148 of the Income Tax Act. Accordingly, the AO framed the reassessment under Section 144 read with Section 147 of the Income Tax Act, vide order dated 30.12.2019.
D. Anand, on behalf of the assessee submitted that the framing of reassessment beyond 4 years and there was no failure pointed out by the AO in the reasons recorded on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year were available on record and the Tribunal could decide the issue being a jurisdictional issue.
D. Hema Bhupal who appeared for the revenue on the other hand heavily relied on the reasons recorded, reassessment order.
The two-member Bench of Mahavir Singh, (Vice President) and Manoj Kumar Aggarwal, (Accountant Member) allowed the appeal filed by the assessee holding that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for framing of assessment and assessment was completed originally under Section 143(3) of the Income Tax Act and admittedly the reopening was beyond 4 years because notice under Section 148 of the Act was issued on 29.03.2019, no reopening was possible.
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