Principle of consistency applicable to determine whether for 148 income has escaped assessment or not

In the present case, the Court finds that the reasons for reopening the assessment for AYs 2008- 09 and 2009- 10 proceeded on the basis that the Assesse had failed to make a full and true disclosure of material facts concerning the claim for depreciation. This cannot be accepted for the simple reason that there was a history of litigation around such claim beginning in AY 2006- 07. The mere fact that the incumbent AO dealing with the returns of the Assesse was different from the AO who dealt with there for the AYs 2006- 07 and 2007- 08 will not excuse the AO from examining the history of the case.

On its part, it was not necessary for the Assessee to enclose a copy of the Business Transfer Agreement (BTA) every year and explain the basis for the claim of depreciation. In any event, the assessments for AYs 2008- 09 and 2009- 10 were completed under Section 143 (3). There was no fresh material to disclose. On this aspect, there was no change in the circumstances. Therefore, there was no failure by the Assessee to make a full and true disclosure of all material facts relevant to the assessment.

Manchanda sought to emphasize that each AY was different and, therefore, the AO was not obliged to look into the previous records. The Court is unable to agree with this approach of the AO. If the AO was seeking to invoke Section 148 of the Act for AYs 2008- 09 to 2010- 11 it was incumbent on him to ascertain the status of the identical claim in the earlier AYs. After all he was seeking to reopen an assessment only on the aspect of the claim of depreciation. On this very aspect the Revenue had for AY 2006­- 07 taken the matter up to the ITAT and the matter had been remanded to the AO. For AY 2007- 08, the CIT (A)’s order allowing the claim had attained finality. These facts could not have escaped the attention of the AO. In any event, there was no fresh material that the AO came across to warrant reopening of the assessments for AYs 2008- 09 and 2009-10. The plea that the AO inadvertently allowed the claim for depreciation for AYs 2008-09, 2009-10 and 2010-11 cannot in the circumstances be accepted.

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