Bombay High Court quashes Notice for Reassessment as Assessee fully, truly disclosed all Material Facts [Read Order]

The Bombay High Court quashed the notice for reassessment as the assessee fully and truly disclosed all material facts.

The petitioner, Ananta Landmark Pvt. Ltd. received a notice under Section 143 (2) of the Act along with notice under Section 142 (1) of the Act calling upon the petitioner to furnish the documents.

An assessment order came to be passed accepting the petitioner’s explanations and computation of income. Of Course in the assessment order, certain credit for tax paid in the sum of Rs.42,160/- was not granted and to that extent, a notice of demand under Section 156 of the Act was issued. That amount has been paid by the petitioner. More than four years, after the assessment order dated 20th February 2015 came to be passed, the petitioner received a notice dated 26th March 2019 under Section 148 of the Act stating “I have reasons to believe that your income chargeable to tax for the Assessment Year 2012-13 has escaped assessment within the meaning of Section 147 of the Income Tax Act, 1961”.

In response, the petitioner, without prejudice to its rights and contentions, sought for the reasons to believe. Respondent, by its letter dated 28th May 2019 provided petitioner the reasons recorded for reopening of the assessment.

The division bench of Justice R.I. Chagla and Justice K.R. Shriram held that there was an omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. It cannot be stated that the condition precedent to the reopening of an assessment beyond a period of four years has been fulfilled.

“We are satisfied that the petitioner had truly and fully disclosed all material facts necessary for the purpose of assessment. Not only material facts were disclosed by the petitioner truly and fully but they were carefully scrutinized and figures of income, as well as a deduction, were reworked carefully by the Assessing Officer. In the reasons for reopening, the Assessing Officer has in fact relied upon the audited accounts to say that the claim of deduction under Section 57 of the Act was not correct, the figures mentioned in the reason for reopening of assessment are also found in the audited accounts of the petitioner,” the court said.

To Read the full text of the Order CLICK HERE

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