ITAT quashes reopening of assessment as AO not alleged that Assessee failed to disclose material facts during Original Assessment

MRF Limited Vs ACIT (ITAT Chennai)

Conclusion: Since there was no allegation by AO on failure on the part of assessee to disclose fully and truly all material facts necessary for assessment, therefore, reopening of assessment was not based on sound footing and hence the impugned assessment order framed u/s.143(3) r.w.s. 147 was illegal and liable to be quashed.

Held: AO reopened assessment under section 147, for the reasons recorded as per which income chargeable to tax had been escaped assessment on account of the excess claim of deduction under section 80JJAA for Rs.79,73,230. The assessment had been completed under section 143(3) read with section 147 and determined total income after making addition towards disallowance of excess claim of deduction under section 80JJAA for Rs.72,36,875. It was held where assessment was reopened after 4 years, for invoking proper jurisdiction, the AO had to record the reason to believe that any income chargeable to tax had escaped by reason of the failure on the part of assessee to disclose fully and truly all material facts necessary for assessment. In this case, on perusal of reasons recorded for reopening of assessment, it was found that there was no allegation by AO on failure on the part of assessee to disclose fully and truly all material facts necessary for assessment. Therefore, reopening of assessment was not based on sound footing and hence the impugned assessment order framed u/s.143(3) r.w.s. 147 of the Act, was illegal and liable to be quashed.

FULL TEXT OF THE ORDER OF ITAT CHENNAI

This appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-9, Chennai, dated 28.02.2019 and pertains to the assessment year 2009-10.

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