Case Law Details
In this case, the reasons provided under Section 148 are that “by reason of omission or failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment and by wrong treatment of income”, certain income has escaped assessment. However, no details are provided as regards what such information is, which engaged the attention of the AO and was not disclosed by the assessee while filing returns. The reasons must indicate specifically what such objective material facts are, on the basis of which a reopening is initiated under Section 148. There is a vague reference in this case to ‘material facts’, which does not meet the standard under Section 148 as identified by the Supreme Court in Phool Chand (supra). In fact, the reasons provided also state that “[a]s per the office note of the assessing officer for the A. Y. 200 7-08, the issue of treating of STCG income on sale of share is needed to be assessed again.” Therefore, this reassessment is not on the basis of new information or facts that have come to the fore now, but rather, a re-appreciation or review of the facts that were provided along with the original return filed by the assesse.
The Hon’ble High Court allowed the appeal placing reliance on the decision in case of CIT v. Kelvinator, (2010) 320 ITR 561 (SC) emphasizing that AO has power to re-open, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief.
HIGH COURT OF DELHI
Decided on 28.01.2014
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