The Tribunal held that when sales are accepted and purchases are unverifiable, only the embedded profit can be taxed. Full disallowance of purchases was found unsustainable.
Emphasizing the gravity of cancellation, the Court intervened where illness prevented compliance. The key takeaway is that genuine hardship can warrant restoration of registration.
ITAT held that dismissing a ground without reasons violates appellate duty. The 43B disallowance was remanded for fresh, reasoned adjudication.
The Supreme Court upheld the quashing of a reassessment notice issued after four years. It ruled that reopening based on a change of opinion, without any suppression of facts, is invalid.
The judgment reiterates that reassessment cannot be initiated merely because the AO takes a different view later. Jurisdictional limits under tax law were strictly enforced.
The SC confirmed that reassessment beyond four years is invalid where full material facts were disclosed during scrutiny. A mere change of opinion cannot justify reopening.
The court held that reopening after four years based on a different view of the same expenditure amounts to a change of opinion. Absence of failure to disclose material facts made the reassessment invalid.
The ruling reiterates that reassessment after four years requires a clear failure by the assessee to disclose material facts. Absence of such failure rendered the notice unsustainable.
The court held that reopening beyond four years is invalid when the recorded reasons do not allege failure to disclose material facts. Full disclosure by the assessee barred reassessment.
The ruling confirms that reassessment based on investigation inputs cannot proceed without independent application of mind by the Assessing Officer. Prior scrutiny of share capital defeated the reopening.
