INCOME TAX ACT, 1961

Section 147, Proviso

Reassessment - Beyond four years - AO clearly recorded assessee's failure to disclose fully and truly all material facts -

AO reopened assessment after expiry of four years from the end of relevant assessment year and disallowed bid loss claimed by assessee. Tribunal relying on proviso to section 147 set aside reassessment framed by AO. Revenue challenged this. Held: It was evident that AO formed an opinion that assessee had failed to disclose fully and truly all material facts necessary for assessment and had clearly concluded that there were lapses on part of assessee in claiming the same amount twice resulting in increase of loss and to that effect, income had escaped assessment. Also, bid loss claimed by assessee pertained to the period beyond accounting period relevant to assessment year under consideration and same was rightly denied by AO in the absence of material evidence. The Tribunal had not independently examined whether reasoning assigned by AO was in accordance with section 147. Therefore, proviso to section 147 was not applicable to the fact situation of case and, order passed by Tribunal, was, therefore, quashed and matter was remitted to Tribunal for decision afresh in accordance with law.

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2003-04

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