Re-Assessment on the basis of Documents already in hand of AO not Valid: ITAT [Read Order]

The Pune bench of the Income Tax Appellate Tribunal (ITAT) has held that the Assessing Officer cannot invoke the provisions of section 147 and 148 to make re-assessment on the basis of facts and documents which are already available with him.

The Assessing Officer has reopened assessment beyond the period of four years from the end of relevant assessment year and made addition on account of difference in receipts of sundry debtors Rs.1,11,63,551/-.

The Assessing Officer has power to reopen the assessment after the expiry of four years from the end of relevant assessment year if, the income has escaped assessment by reason of failure on the part of assessee to disclose fully and truly all material facts necessary for the assessment for that assessment year.

The Tribunal observed that the reassessment proceedings have been initiated by the Assessing Officer on reappreciation of facts and documents already on record.

“A bare perusal of reasons for reopening would show that the Assessing Officer has erred in invoking the provisions of section 148 r.w.s. 147 after the expiry of four years to cover up his own follies. It is not the case of Revenue that the assessee has not fully and truly disclosed all material facts necessary for its assessment. The proviso to section 147 mandates that the assessment can be reopened inter alia, where the assessee has failed to disclose fully and truly all material facts necessary for assessment for that assessment year. The provisions of section 148/147 of the Act are not meant to rectify the defects in the assessment order caused by the Assessing Officer’s own negligence. The provisions of section 147 are more stringent where Assessing Officer intends to reopen the assessment after the expiry of four years from the end of the relevant assessment year. The Assessing Officer cannot be allowed to recklessly invoke the provisions of section 148/147 to make additions on mere reappreciation of the facts and documents already on record,” the Tribunal said.