AO cannot made reassessment u/s 147 of the Income–tax Act, 1961 only on the ground that there is escapement of income
AO cannot made reassessment u/s 147 of the Income–tax Act, 1961 only on the ground that there is escapement of income; instead he should indicate the fact which was not disclosed by assessee during the original assessment.
Global Signal Cables (India) Pvt. Ltd. Vs. DCIT, W.P.© 747/2014, Date of Order: 17.10.2014, Delhi High Court
Assessee filed his return of income for A.Y. 2066-07 and same was selected for scrutiny assessment u/s 143(2) of the Act. AO passed assessment order u/s 143(3) of the Act on 29/08/2008. Thereafter, on 28/03/2013 AO issued notice u/s 148 of the Act for reopening of assessment. Assessee asked for the reason recorded u/s 148 of the Act and same was provided by AO. In the recorded reasons the reopening has been proposed on the ground that assessee has granted interest free loan to parties on which no interest and financial expenses was disallowed. Assessee challenge the same on ground that reopening is initiated on the basis of the same material and no fresh material has come in the possession of the department as also there has been no failure on the part of the assessee in disclosing fully and truly all material facts.
Hon’ble High Court held that the escapement of income by itself is not sufficient for reopening the assessment u/s 147 of the Act unless and until there is failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessment. In the present case, all relevant facts were disclosed by assessee during original assessment and AO has not been specifically indicated any material fact which was not disclosed by the assessee.
Hence, appeal of assessee is allowed.