Disclosure of different due date in filed return from that claimed in reassessment proceedings amount to non-disclosure of full facts

Brief of the case:

• The ITAT Delhi in the case of ITO vs. Shree Rajeev Goenka that assessee cannot be said to make full and correct disclosure of all the facts if the return of income due date which he mentioned in return filed is different from the due date he claimed during reassessment proceedings.
• Accordingly , the claim of the assessee during reassessment proceedings that due date of filling return of income was some other than date as declared in return filed would be a case of non-disclosure of all facts during the course of assessment u/s 14 3(3) and therefore, the restriction contained in 1^st provisio to sec 147 won’t apply.

Facts of the case:

• The assessee his return of income on 27.11.2003 declaring a total income of Rs.1,82,509/-, claiming Long Term Capital Loss (LTCL) of Rs.31,34,908/-The assessment was completed under section 143(3) of the Act accepting the return filed by the assessee.
• Subsequently, the AO noticed that the assessee has filed belated return of income for the AY in question on 27.11.2003 as against the due date of 31.7.2003 (extended upto 3.10.2003) for assessment year 2003-04. Hence, as per the provisions of section 80 of the Act, the assessee was not entitled to carry forward the capital loss declared in the return of income as the return of income was filed after due date prescribed in sec 139(1) . Hence, the AO reopened the assessment by issuing notice on 26.3.2009 to the assessee.
• Assessee challenged reassessment proceedings before CIT (A) who allowed his appeal on the ground that the assessment has been reopened after expiry of four years from the end of assessment year without pointing out that there is failure on the part of the assessee to disclose fully and truly all the material facts relevant to the completion of assessment, as required under the first Proviso to Section 147 of the Act.
• Aggrieved the CIT (A) order revenue is in appeal before ITAT Mumbai.

Contention of the Assessee:

• The assessment was reopened after 4 years but there was full disclosure of all facts by him during the course of assessment proceedings under sec 143(2) & 143(3). It is therefore, the reopening is bad in law because the same is not allowed as per 1^st proviso to Sec 147.
• Further , he was as good as acting as working partner in partnership of the trust with M/s Go GO International because partnership firm consists of atleast two legal persons and in this case no other natural person was available and he has only carried on the activities of the partnership firm as representative of M/s Sham Sunder Goenka Trust.
  

Contention of the Revenue:

The assessee was only a beneficiary of M/s Sham Sunder Goenka Trust and he is not a partner in the firm M/s Go Go International in his individual capacity. Accordingly, the AO disposing off the objections of assessee held that the assessee has filed the return of income beyond the stipulated time limit and hence he is not entitled to carry forward LTCL of Rs.31,34,908/- in the subsequent year.

Issue before the High Court:

Whether the assessee disclosed all the facts and information during the course of assessment proceedings so as to refrain AO from reassessment?

Held by ITAT Mumbai:

• A careful perusal of the return of income filed by the assessee show that in the return of income is nowhere mentioned that the due date for filing return of income for the year under consideration was 30-11-2003 as per the extended time limit rather assessee himself stated that due date was 31^st July,2003(extended upto 3.10.2003)
• In such a case there was no true and complete disclosure of all facts on the part of assessee, it is therefore, assessee cannot take recourse to first proviso to sec 147.
• Further, the plea of assessee that he should be considered as “working partner” of M/s Go Go International is not tenable because M/s Sham Sunder Goenka Trust was the partner of trust and not the assessee. Therefore, the due date 30^th September (extended upto 30^th) cannot be claimed by the assessee as being representative of trust (trustee) he cannot be considered as partner per se.
• In result the appeal filed by revenue was allowed.