Case Law Details
Best Cybercity (India) Pvt. Ltd. Vs. ITO (Delhi High Court)
In the present case all the material that was necessary for the AO to form an opinion regarding the transaction involving the Assessee and PACL was already available with the AO. There was no fresh tangible material on the basis of which the AO could have formed an opinion about any taxable having escaped assessment during the AY in question. Also, the reasons recorded by the AO for re-opening the assessment do not refer to the above facts. It merely repeats the language of Section 147 that there was a failure by the Assessee to disclose fully and truly all material facts necessary for the assessment. The Court is, therefore, satisfied that the jurisdictional requirement of the first proviso to Section 147 proviso has not been satisfied in the present case.
The learned counsel for the Assessee is right in his submission about the mistakes committed even in the proforma accompanying the reasons recorded which notes that the exercise was being undertaken in terms of clause (b) to Explanation 2 to Section 147 which would mean that the original assessment was under Section 143 (1) of the Act. The fact is that the original assessment was under Section 143 (3) of the Act. This perhaps explains why the reasons recorded for re-opening the assessment does not advert to what transpired during the original assessment and in particular the questionnaires issued to the Assessee by the AO specifically on the issue of the loan from PACL. The learned counsQl for the Assessee is justified in his submission that this also reflects non-application of mind by the AO, and the superior officer who approved the re-opening, to the relevant materials.
Court quashes the notice dated 29th March, 2018 issued to the Assessee under Section 147 read with Section 148 of the Act and also sets aside the order dated 26th October, 2018 passed by the AO rejecting the objections raised by the Petitioner to the re-opening of the assessment for the AY in question.
FULL TEXT OF THE HIGH COURT JUDGMENT / ORDER IS AS FOLLOWS:
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