PCIT (Central)-2 Vs K.R. Pulp And Papers Ltd (Delhi High Court)
Delhi High Court held that reopening of assessment under section 147 of the Income Tax Act rightly quashed by CIT(A) and ITAT since there was full and true disclosure of all the material facts on the part of the assessee. Accordingly, appeal of revenue dismissed.
Facts- The Assessee is a public limited company and is engaged in the manufacturing of kraft paper and brown paper usually used for packaging. Post scrutiny assessment, the case was reopened u/s. 147 of the Act, and a notice u/s. 148 of the Act was issued to the Assessee. Upon completion of the reassessment proceedings, the AO passed an order u/s. 147 r.w.s. 143(3) of the Act on 31.12.2016, assessing the total income of the Assessee at ₹27,28,32,150/-. The reassessment included an addition of ₹25,32,35,000/- u/s. 68 of the Act on account of unexplained share capital and share premium received by the Assessee.
CIT(A) allowed the appeal and deleted the addition. Revenue’s appeal before ITAT was unsuccessful. Being aggrieved, revenue has preferred the present appeal.
Conclusion- Held that there was no failure on the part of the Assessee in disclosing fully and truly all material facts necessary for completion of the assessment. In the given facts, there was no explanation recorded as to how the Assessee failed to make full, true and all material disclosure of all the facts, and therefore, upheld the impugned order passed by the CIT(A). The conclusion of the learned ITAT must be read in the context that the fact the Assessee had furnished all information including the details of the share applicants, PAN number as well as their ITRs to establish the genuineness and creditworthiness of the entities. The reassessment proceedings would indicate that same was examined during the original assessment proceedings. The learned ITAT‘s finding regarding the requirement of clear recording as to how the Assessee had failed to truly disclose all material facts, is required to be understood in the aforesaid context. In view of the above and the concurrent findings of the CIT(A) as well as the learned ITAT, the question is answered in favour of the Assessee and against the Revenue. The appeal is, accordingly, dismissed.
