INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Insufficient reasons given by AO -

AO issued notice under section 148 for reopening assessment alleging that disallowance made under section 14A was not added back to book profit of assessee under section 115JB and thus, the same escaped assessment. Further, it was alleged that the assessee also failed to deduct tax at source on certain payments made by it. Accordingly, the AO concluded that he had reasons to believe that there was failure on the part of the assessee in not adding back the alleged amount to the total income. Held: There was no details given by AO that could prove that the assessee failed to disclose any fact or material, which lead to escape assessment. Merely referring a bald assertion that “I have reason to believe that it was a failure of assessee not to add back the alleged to the total income” was not sufficient to frame notice for re-opening concluded assessment beyond four years. Thus, the impugned notice under section 148 was bad in law and hence, the re-opening of assessment was invalid.

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2005-06

INCOME TAX ACT, 1961

Section 115JB

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