The Tax Publishers2019 TaxPub(DT) 2735 (Del-Trib)

INCOME TAX ACT, 1961

Section 147

Reopening of assessment, based on appreciation of same facts as were available before AO during assessment proceedings under section 143(3), could not be sustained in the absence of tangible material coming to the possession of AO to form reason to believe as to tax escapement, therefore, reassessment order was quashed.

Reassessment - Validity - Reason to believe - No tangible material found

AO reopened assessment on the ground that assessee had wrongly claimed advances of capital in nature written off as revenue expenditure. Assessee's case was that there was no tangible material coming into the possession of AO after completion of original assessment proceedings to reopen the assessment. Held: Admittedly, assessment was reopened within 4 years from the end of relevant assessment year, however, even in re-assessment falling within the period of four years there had to be a tangible material coming into the possession of AO to reopen the cases. There was no tangible material coming to the possession AO after formation of order under section 143(3) and reasons recorded for reopening were based on appreciation of same facts as were available before AO during assessment proceedings under section 143(3). Even order passed by AO disposing of objection raised by the assessee was never served on assessee before the service of reassessment order. It clearly amounted to violation of principles of natural justice. In view of this, reassessment proceedings initiated without any tangible material could be not sustained. Hence, reassessment was quashed.

Relied on :CIT, Delhi v. M/s. Kelvinator of India Limited 2010 TaxPub(DT) 1335 (SC) : (2010) 320 ITR 561 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2007-08



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