Reopening reasons must explain what material was not disclosed which the assessee ought to have disclosed. Explanation-1 of section 147 do not relieves AO of burden of demonstrating the assessee’s failure.
Delhi High Court explains the jurisdictional requirement of reopening of income tax cases u/s 14/148 post amendment
ABCAUS Case Law Citation:
ABCAUS 2007 (2017) (07) HC
The Hon’ble High Court observed that the jurisdictional requirement that has to be fulfilled for justifying re-opening of assessment where an assessment originally has been made under Section 143(3) of the Act and where the re-opening is after the expiry of 4 years from the end of the relevant AY is that the Revenue has to show that some income chargeable to tax escaped assessment by reason of the failure on the part of the Assessee “to disclose fully and truly all material facts necessary for his assessment, for that assessment year”.
The Hon’bleHigh Court noted that Section 147 underwent a significant change by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1st April, 1989. The Supreme Court has held that after 1st April, 1989, the AO has the power to re-open the assessment in terms of first proviso to Section 147 of the Act “provided there is ‘tangible material’ to come to the conclusion that there is escapement of income from assessment.”
The Hon’ble High Court observed that It has been repeatedly emphasized in several decisions including the aforementioned decision of the Hon’ble Apex Court that the re-opening of an assessment on the same material that was available with an AO during the original assessment proceedings would be a case of mere change of opinion.
The Hon’ble Delhi High Court explaind the provisions related to reopening as under:
The Hon’ble High Court clarified that in many of the cases, where the re-opening of an assessment is challenged, the Revenue tries to make up for the obvious defect in the reasons themselves which do not spell out the reasons by providing a justification at the stage of disposal of the objections or later in the counter-affidavit when the re-opening is challenged by a writ petition. This, again, is impermissible in law. Since the reasons must speak for themselves, a subsequent attempt to supply the omission at the stage of an order disposing of the objections raised by the Assessee or providing them in the counter-affidavit in reply to the writ petition or even worse, making good that defect in the course of arguments before the Court, will simply not suffice.
Notice issued u/s 143(2) prior to filing of return of income by the assessee was invalid. Before filing ITR provisions…
Order u/s 148A(d) passed against non-existent entity is bad in eyes of law. Mere activation of PAN not give right…
Tax authorities not bound with provisions of section 44AE of the Act once assessee waived the option available In a…
Whether seized document is incriminating or not is definitely a findings of fact – High Court In a recent judgment,…
Interest earned on borrowed funds/ unutilized capital subsidy are capital receipts In a recent judgment, Hon'ble Guwahati High Court has…
There is no statutory requirement of pre-deposit for stay of demand under Income Tax Act - High Court stayed demand …