Case Law Details
Bhavesh Pravinchandra Sheth Vs Asstt. CIT (ITAT Mumbai)
Conclusion: Since assessee had no intention to make a full and true disclosure of its income as it would not have filed a revised return of income showing higher income before issuance of the notice 143(2)/142(1) by AO, therefore, AO rightly held that assessee had deliberately and consciously failed to furnish full and true particulars of income and attempted to conceal income and levy of penalty under section 271(1)(c) was confirmed.
Held: In the instant case, in the original return filed on 30.09.2011, assessee had declared total income of Rs.9,773/-. The date of receipt of notice u/s 143(2) by assessee which was issued by the AO was 12.9.2012 and the date of receipt of notice u/s 142(1) which was issued by the AO was 15.9.2012. However, in the revised return of income filed on 25.09.2012, assessee had declared total income of Rs.25,22,599/-. The tax payable on it as per the assessee came to Rs.5,88,931/-. AO levied a penalty under section 271(1)(c) @ 100% of the tax sought to be evaded. It was held that assessee had no intention to declare its true income in the original return of income filed on 30.09.2011. Had it been the intention of the assessee to make a full and true disclosure of its income, it would have filed a revised return of income before the issuance of the notice 143(2)/ 142(1) by AO. Therefore, in the instant case, AO had rightly held that assessee had deliberately and consciously failed to furnish full and true particulars of income and attempted to conceal income. Thus, penalty was justified.
Reopening of Assessment in absence of any adverse tangible material was invalid
Similar reasons are recorded in the Asstt.Year 2011-12 also. A perusal of the above would indicate that in all these three years, assessments have been framed under section 143(3) of Act. Notice under section 148 of the Income Tax Act was issued after expiry of four years from the end of the relevant year in the Asstt.Year 2009-10 and 2010-11. AO has recorded reasons on 1.12.2015 in both these years. As far as Asstt.Year 2011-12 is concerned, notice under section 148 was issued on 14.3.2016 i.e. within four years from end of the assessment year. Thus, as far as Asstt.Year 2009-10 and 2010-11 are concerned, proviso appended to section 147 would come to the rescue of the assessee for challenging reopening of the assessment because this proviso puts an embargo upon power of the AO to reopen any assessments where four years have expired and original assessment was framed under section 143(3) of the Act. In such cases, assessments can be reopened only if an income assessable to tax has escaped on account of failure of the assessee to disclose all the material facts fully and truly. In other words, the AO has to demonstrate that income of the assessee has escaped assessment on account of its failure to disclose all material facts of the assessments in its income fully and truly. A perusal of the reason would indicate that no such circumstance has been highlighted by the AO. It is also pertinent to observe that perusal of the reasons extracted (supra) would disclose that AO has not assigned any reason to show how the income of the assessee chargeable to tax has escaped the assessment. The same very facts were available to him when he passed original assessment orders. Even as far as Asstt.Year 2011-12 is concerned the AO has not brought on record any tangible material which came to his notice after passing of regular assessment order under section 143(3) of the Act. The ld.CIT(A) has recorded a categorical finding in his order, and held that complete books of accounts with bills and vouchers were submitted before the AO for verification. Nothing has been come to the notice of the AO showing basis for harping a belief that income has escaped the assessment. Therefore, after considering well reasoned order of the ld.CIT(A), we do not see any merit in the appeals of the Revenue. Since we concur with the ld.CIT(A) that the reopening is bad in law, we do not deem it necessary to go into other issues on merit. We uphold the orders of the ld.CIT(A) and dismiss all these appeals.
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