The Madras High Court upheld the reassessment proceedings as assessee failed to make full and true disclosure of all material facts during original assessment.
The assessee, M/s. Thirveni Earthmovers Pvt. Ltd. has been engaged in the business of iron ore mining services, transportation and handling of iron ore and limestone, quarrying of blue metal boulders and sale of blue metals.
Mr.R.V.Easwar, the counsel for the assessee contended that the respondent authority failed to show any evidence of any failure on the part of the assessee to fully and truly disclose all materials. The assessee filed their objections to the reopening among other things, submitting that the reopening was completely untenable as complete information was available with the Assessing Officer even at the time of scrutiny under Section 143(3) of the Act and the reopening was contrary to law. The assessee had made full and true disclosure during the scrutiny assessment, the re-assessment cannot be initiated after four years from the end of the relevant assessment year as per the first Proviso to Section 147 of the Act.
It is further contended that there is no tangible material to come to the conclusion that the income has escaped assessment, reopening is based on mere change of opening, reopening is based on assumptions and surmises, on merits the notice under Section 148 is illegal and the notice under Section 148 was issued with an intention of initiating a rowing and fishing enquiry.
The division bench of Justice T.S.Sivagnanam and Justice Sathi Kumar Sukumara Kurup pointed out that the assessee has not made full and true disclosure of all material facts during the original assessment, the reopening of the assessment was not based on the change of opinion but the facts which emanated after the rectification application was filed by the assessee and it is incorrect on the part of the assessee to state that the reopening of the original assessment was on assumptions and presumptions.
Therefore, the court said that the reopening proceedings have been validly done and the assessee should co- operate in the reassessment to be done by the Assessing Officer.
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