Issue examined under original assessment proceeding: Whether re-opening in such case is justified.
- The Assessee was engaged in the business of real estate and filed its return of income on 28.09.2011 declaring loss of Rs. 27.04 lakhs and the assessment was completed under section 143(3) on 14.03.2014 at NIL income. Subsequently, notice under section 148 was issued on 28.3.2018 after recording the reasons and seeking appropriate approvals.
- In response, the Assessee filed its return of income declaring NIL income. Subsequently, notice under section 148 was supplied to the Assessee and objections so received from the Assessee were disposed off vide order dated 13.12.2018. Thereafter, notice under section 143(2) and 142(1) were issued and after considering the submissions of the Assessee, the reassessment was completed at an assessed income of Rs 52.77 lakhs.
- Reliance was placed on the decision of Hon’ble Delhi High Court in case of CIT v. Multiplex Trading & Industrial Co. Ltd., wherein the Court dealt with the question “whether the Assessee could be stated to have disclosed fully and truly all material facts which had to be examined in the light of facts of each case and also the reasons that led the Assessing Officer to believe that income of the assessee has escaped assessment. In a case where the primary facts have been truly disclosed and the issue is only with respect to the inference drawn, the Assessing Officer would not have the jurisdiction to reopen the assessment. But in cases where the primary facts as asserted by the assessee for framing of assessment are subsequently discovered as false, the reopening of assessment may be justified.”
- In the present case, the Assessing officer referred to the Assessee’s financial statements, the profit & loss account and submissions filed by the Assessee during the course of original assessment proceedings and basis the same, held that the income had escaped assessment. However, as far as the onus on the Assessee to disclose the primary facts were concerned, the same was satisfied. In the reasons so recorded by the Assessing Officer, there was no allegation made by the Assessing Officer that there was any such failure on the part of the Assessee Company. It was for the Assessing Officer to disclose and open his mind through the reasons recorded by him. Therefore, in the absence of any failure of disclosing facts/ submitting relevant documents on part of the Assessee Company, the Assessing officer could not assume jurisdiction under section 147 of the Act.
- Hence, it was inferred that the re-assessment proceedings were liable to be quashed.