Case Law Details
ACIT Vs ECI Engineering & Construction Co. Ltd (ITAT Hyderabad)
ITAT Hyderabad held that for re-assessment beyond a period of 4 years, recording of satisfaction by the CIT is a must under the Income Tax Act, 1961. In absence of the same, re-assessment proceedings are invalid.
Facts- The assessee in the present case contends that the notice u/s 148 was issued without obtaining the satisfaction of the CIT-II, Hyderabad / CBDT. The contention of the assessee is that the notice was issued as if the re-opening was done within 4 years under clause (1) of section 147 of the Act. It was the contention that if the reopening is done by the Revenue beyond a period of 4 years, then satisfaction of the Commissioner of Income Tax is necessary.
Conclusion- Once the Assessing Officer has not mentioned that the assessee has failed to disclose fully and truly all material facts, necessary for completion of the assessment, the re-opening cannot be made in the eyes of law. In the light of the above, reopening made by the Assessing Officer is not in accordance with the law and the consequential assessment made by the Assessing Officer is also bad in law.
Further, the Assessing Officer in the notice of reopening dt.28.03.2012 copy of which has already been reproduced at para 4.1 of the order had deleted that the notice was issued after obtaining the necessary satisfaction from the CIT. This fact clearly shows that at the time of issuing the notice, there was no satisfaction on record by the Revenue authorities permitting the Assessing Officer to reopen the assessment beyond a period of 4 years. Had that satisfaction was available then there was no reason for the Assessing Officer to delete the above noted facts. In view of the above, a conclusion may be drawn that the reopening was made beyond a period of 4 years without recording satisfaction by the CIT.
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