Re-Assessment is Invalid when Assessee disclosed All Material facts to complete Assessment: ITAT [Read Order]

The Chennai bench of the ITAT has deleted a re-assessment passed under section 147 of the Income Tax Act, 1961 by holding that there was no failure on the part of the assessee in respect of disclosure of all relevant materials required for assessment fully and truly.

Earlier, the Single Member Bench of ITAT has quashed the order of assessment passed under section143(3) r.w.s. 147 of the Act on the ground that when there is time limit to issue notice under section 143(2) of the Income Tax Act, 1961 and the Assessing Officer has to complete the assessment under section 143(3) of the Act, the Assessing Officer is precluded from issue of notice under section 148 of the Act.

However, in terms of provisions of section 149(1)(b) r.w.s. 151(1) of the Act, the Assessing Officer has again reopened the assessment by issuing notice under section 148 of the Act dated 31.03.2018. In response to the notice, the assessee filed his return of income on 09.10.2018 and asked reasons for reopening of assessment. After considering the objections of the assessee and following other procedure, the Assessing Officer has completed the assessment order under section 143(3) r.w.s. 147 of the Act dated 21.12.2018.

On being aggrieved, the assessee approached the Tribunal for the second time contended that issuing notice under section 148 of the Act dated31.03.2018 for reopening of assessment is beyond four years and nowhere, the Assessing Officer has recorded that there is a failure on the part of the assessee to disclose all relevant materials to complete the assessment.

The Tribunal bench comprising Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member observed that from the above, it is very clear that the Assessing Officer has not alleged that there is a failure on the part of the assessee to disclose fully and truly all material facts to complete the assessment.

“That apart, we find that there is no failure on the part of the assessee in respect of disclosure of all relevant materials required for assessment fully and truly. Therefore, in our opinion, the reopening of assessment under section 147 of the Act is invalid and the same is quashed,” the Tribunal concluded.

To Read the full text of the Order CLICK HERE

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