Case Law Details
Boston Scientific International Vs ACIT (ITAT Delhi)
In a significant ruling, the Income Tax Appellate Tribunal (ITAT) Delhi, in the case of Boston Scientific International Vs ACIT, quashed the reassessment proceedings initiated by the Assessing Officer (AO) under section 147 of the IT Act. The tribunal held that the AO failed to present tangible materials that would warrant a reopening of the case under the given section.
The original assessment was completed under section 143(3) of the Act, after which the AO sought to reopen the case under section 148 due to suspected income escapement. However, the tribunal noted that the AO merely relied on existing records and did not present new tangible evidence to support the belief that the assessee’s income had escaped assessment.
Further, the AO did not satisfy the obligation under the proviso to section 147 of the IT Act, i.e., to record in the reasons the failure on the part of the assessee to fully and truly disclose all material facts relevant for the purpose of the assessment. ITAT Delhi ruled that the lack of these two critical factors – tangible material and failure to disclose – rendered the reassessment void ab initio.
Conclusion: This ruling reaffirms the necessity for Assessing Officers to provide tangible material and justify the belief of income escapement when initiating reassessment proceedings. It also emphasizes the need to adhere to the provisions of the IT Act to avoid potential legal issues. This landmark judgment could have far-reaching implications in future cases where the validity of reassessment proceedings is questioned.
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