Delhi High Court held In the case of Consultating Engineering Services (India) Ltd. vs. DCIT that for reassessment as per first proviso of section 147, it is pre- condition that the assessee has not made a full and true disclosure of the material particulars necessary for the assessment. Accordingly, in the given case, the revenue cannot be permitted to reopen the assessment as the necessary pre-condition for doing so in a case which is beyond four years from the end of the relevant assessment year has not been fulfilled.
Facts of the Case
The assessment of the assessee was completed under section 143(3) on 15.12.2010.The assessing officer made certain additions on account of section 40(a)(ia) of Rs.1,55,94,534 under section 14A of Rs. Rs.1,55,603 and on account of extra depreciation claimed on computer peripherals Rs. 6,87,043.The notice under section 148 was issued on 21.03.2013, beyond four years from the end of the relevant Assessment Year. The reasons for the same given by the revenue were that the assessee had escaped the income and failed to disclose the true particulars of its income. The reasons of reopening of assessment were as follows:
Held by High Court
With regard to first reason given by AO for reopening of assessment, we find that assessee had claimed interest expenses as revenue expenditure and that also been allowed in original proceedings. It is clear that the assessing officer has done nothing but to re-examine the records which were already available and has arrived at a different conclusion in stating that the interest expenses ought to have been capitalised. This, by itself, to our mind does not amount to any failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. It has not been indicated as to what particulars were not disclosed by the assessee. All the relevant accounts and records were available for consideration and the assessing officer had considered the entire material and he gave a detailed assessment order running into five pages.
With regard to the second reason, we find that the assessing officer has not even indicated the extent of the alleged escapement of income. Furthermore, the assessing officer has once again stated that on “perusal” of the notes to the accounts of the assessee and particularly the note at serial number 9 of the auditor’s report, it is seen that the assessee has booked the professional fees less than the job in progress brought forward from the last year on the ultimate completion by an amount of Rs. 3,21,21,550/-.Nothing further has been indicated apart from this fact which was there on record even in the original assessment. Therefore, once again we are of the view that the allegations of the assessing officer in the purported reasons that the assessee had failed to disclose full and true particulars of his income, is without any basis.
Accordingly, appeal of the assessee allowed.