Case Law Details
Rajshree Realtors Private Limited Vs Union of India (Bombay High Court)
Bombay High Court held that initiation of reassessment proceedings u/s 147 after the expiry of 4 years from the end of the relevant assessment years without failure on the part of the assessee to disclose fully and truly all the material facts unsustainable and liable to be quashed.
Facts- During the assessment proceedings, AO made addition of Rs. 3,00,00,000/- u/s. 68. However, CIT(A) deleted the said addition. ITAT upheld the order of the CIT(A). Accordingly, revenue has challenged the order of ITAT and appeal is still pending.
Later, petitioner received a notice from respondent no.3 u/s. 148 of the Act in which it is stated that respondent no.3 had reasons to believe that income chargeable to tax for A.Y.-2012-2013 has escaped assessment. As required, petitioner provided all information and material called for as per the notice. Petitioner was provided a copy of the reasons to believe recorded for initiating reassessment proceedings u/s. 147 of the Act. It is alleged that, as per information the assessee company is one of the beneficiaries who had taken accommodation entry in form of bogus share capital/premium from bogus paper companies, viz., SCPL and SHPL. As per respondent no. 3 the amount involved in the transaction was Rs.2,50,00,000/-.
Conclusion- Held that Section 147 of the Act is very clear that no action shall be taken under the said Section after the expiry of 4 years from the end of the relevant assessment years unless any income chargeable to tax has escaped assessment by reason of the failure on the part of assessee to disclose fully and truly all material facts. First of all, it is not spelt out in the reasons to believe as to what was the material fact which was not truly and fully disclosed. Further, having considered the submissions of petitioner during the course of original assessment proceedings and the findings of CIT(A) as well as ITAT, we are also satisfied that there was no failure on the part of petitioner to disclose fully and truly any material fact. Even assuming, respondents’ case is petitioner should have disclosed that these were bogus or accommodation entries, still there is nothing on record to indicate that petitioner was aware that these were bogus shares capital/premium from bogus paper companies, viz., SHPL and SCPL and were accommodation entries.
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