Income Tax, Issue Update

Issue examined under original assessment proceeding: Whether re-opening in such case is justified

Case: Dy. CIT vs Indian Metals & Ferro Alloys Ltd, Cuttack ITAT

This case delves on the issue whether it is justified on the part of assessing officer to re-open the issue and re-examine the same even if examined during original assessment proceedings?

Reliance was placed on the decision of the Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd., wherein it was concluded that in the absence of fresh information/ material coming to the possession of the Assessing Officer, reopening was not permissible. As there was nothing to suggest that all the primary facts were not disclosed by the Assessee at the time of original assessment completed under section 143(3) of the Act nor any failure on the part of the Assessee to disclose fully and truly all the material facts, thus, it was inferred that the re-assessment proceedings were liable to be quashed. See Facts & Key Points.

Another issue added in the docket on this case is ‘whether assessment can be re-opened on the basis of audit objections.’ If you are a tax professional who advises individuals or companies on tax aspects relating to foreign currencies, you may like to track such cases. Follow the issue and industry using Telescope dashboard.

Facts

  • The Assessee had filed its original return of income on 29.09.2011 showing total income at Rs.199.01 crore and revised the return of income on 31.03.2012 that showed total income at Rs.199.01 crore. The Assessing Officer had completed assessment under section 143(3) of the Act on 14.03.2014 determining the total income at Rs.408.97 crores. Notice under section 148 was issued to the Assessee on the basis of an audit objection.

Key points

  • Reliance was placed on the decision of the Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd., wherein it was concluded that in the absence of fresh information/ material coming to the possession of the Assessing Officer, reopening was not permissible. As there was nothing to suggest that all the primary facts were not disclosed by the Assessee at the time of original assessment completed under section 143(3) of the Act nor any failure on the part of the Assessee to disclose fully and truly all the material facts, thus, it was inferred that the re-assessment proceedings were liable to be quashed.

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