Case Law Details
ITO Vs Indian Packaging Products (ITAT Ahmedabad)
In a landmark decision by the Income Tax Appellate Tribunal (ITAT) Ahmedabad, re-assessment proceedings initiated beyond the period of four years from the end of the relevant assessment year (AY) were set aside. This ruling, concerning the case between the Income Tax Officer (ITO) and Indian Packaging Products, highlights the tribunal’s stance on the limits of re-assessment under Section 147 of the Income Tax Act. The case delves into the procedural aspects and legal precedents surrounding re-assessment, particularly focusing on the absence of new material justifying such proceedings after the four-year threshold.
Detailed Analysis
The appeal was filed by the Revenue against the order of the Commissioner of Income Tax (Appeals) in Baroda, which had quashed the re-assessment proceedings initiated under Section 148 of the Act. The Revenue’s grounds for appeal raised issues pertaining to the applicability of Section 292BB, the sanction for re-assessment under Section 151(1), and the procedural validity of the re-assessment order.
The ITAT’s analysis centered on the foundational principle that re-assessment beyond the four-year period from the end of the relevant AY requires concrete evidence of income escapement due to the assessee’s failure to disclose fully and truly all material facts necessary for assessment. The tribunal scrutinized the reasons recorded for initiating the re-assessment and found them lacking in new material or evidence of non-disclosure by the assessee.
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