The Income Tax Appellate Tribunal ( ITAT ), New Delhi invalidated re opening of re assessment under Section 147 of the Income Tax Act, 1961 as there was Non specification on primary facts to be disclosed in the Show cause notice.
The assessee company, VE Commercial Vehicles Ltd is engaged in the business of manufacturing and trading of commercial vehicles and components including gears, engineering solutions and providing services in relation to commercial vehicles.
The Counsel for the assessee submitted that in view of the absence of any allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, the notice for reassessment issued under section 148 of the Income Tax Act, after the expiry of four years from the end of the relevant assessment year is barred by limitation prescribed in proviso to section 147 of the Income Tax Act, without jurisdiction and illegal.
The Counsel further stated that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment in relation to the claim made under section 35(2AB) of the Income Tax Act, in as much as the same was disclosed in the return of income and in the financial statement/lax audit report and the same was also verified by the Assessing Officer during the course of the assessment proceedings under section 143(3) of the Income Tax Act.
The Bench consisting of Anubhav Sharma, Judicial Member and Dr B. R. R. Kumar, Accountant Member observed that “In the facts of the present case, the impugned notice under section 148 of the Income Tax Act issued after the expiry of period four years from the end of relevant assessment year, is beyond limitation in terms of the proviso to section 147 of the Income Tax Act, no case could be made with regard to failure on part of assessee to disclose fully and truly all material facts.”
“Applying the aforesaid settled legal position to the facts of the present case, the notice issued without specifying as to what primary facts which the assessee was required to disclose but did not disclose, assumption of jurisdiction for reopening of re-assessment u/s 147 of the Income Tax Act is bad in law and void-ab-initio” the Tribunal ruled.
Ajay Vohra, appeared for the assessee and Surender Pal, CIT DR appeared for the Revenue.
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