Bombay HC: No Disclosure Failure, No Reopening After 4 Years

Stock Holding Corporation of India Ltd. Vs ACIT (Bombay High Court)

Reassessment Without Alleging Disclosure Failure: Bombay HC Denies Revenue a Second Bite at the Cherry

Facts-

• The Petitioner, Stock Holding Corporation of India Ltd., challenged the reopening of its assessment for AY 2013-14 by a notice issued under Section 148 of the Income Tax Act, 1961, dated 31st March 2021.
• A scrutiny assessment under Section 143(3) had already been carried out for AY 2013-14, with an order passed on 7th March 2016.
• The impugned notice for reassessment was issued after a period of 4 years from the end of the relevant assessment year.
• The reasons recorded for reopening merely mentioned & quot; unexplained credit & quot; of Rs. 43,46,350/-, without specifying any failure by the Petitioner to disclose material facts fully and truly.
• The department attempted to supplement the initial reasons for reopening in the order disposing of objections, rather than in the original recorded reasons.

Issue- Whether reassessment proceedings initiated after four years from the end of the relevant assessment year are valid, in the absence of any allegation or finding that the assessee failed to disclose fully and truly all material facts necessary for his assessment under the first proviso to Section 147 of the Income Tax Act, 1961.