The Bombay High Court in the case Emkay Global Financial Services Limited Versus Assistant Commissioner of Income Tax observed and has held that the assessing officer cannot take recourse to reopen the assessment to remedy the error which is resulting from his oversight in the assessment proceeding initiated.
The bench comprising of Justice K. R. Shriram and Justice Kamal Khata in the case observed and has stated that the assessment cannot be reopened by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts, as the Income Tax Officer had material facts before him when he made the original assessment.
In the present case, the petitioner or assessee is in the business of trading shares and stock. The petitioner in the plea challenged the action of the respondent department for issuing notice under Section 148 of the Income Tax Act, 1961, seeking to reassess the petitioner’s income for Assessment Year 2015-2016.
It has also been contended by the assessee before the court that the notice under Section 148 has been issued after the expiry of more than four years which being from the end of the relevant assessment year, and an assessment under Section 143(3) of the Act has been made.
The provision stated under Section 147 of the Act shall apply and as per the proviso, where the reassessment is impermissible after the expiry of four years from the end of the relevant assessment year, where assessment under Section 143(3) has been made, unless there has been a failure on the part of the assessee to truly and fully disclose material facts during the assessment.
The court in the matter stated that the bare perusal of the reasons recorded would show that there has been no failure on the part of the petitioner to truly and fully disclose material facts and though the words ‘failure which being on the part of the assessee to disclose fully and truly all material facts necessary for assessment’ have been used in the reasons recorded, those have been used only to get over the fetters placed by the proviso to Section 147 of the Act.
The court while considering the facts and circumstances of the case observed and has held that the entire basis for forming a reason to believe there was an escape of income is from the records filed by the petitioner with the return of income.
Therefore, the court stated that there is no such on the part of the assessee to truly and fully disclose the primary facts.
The counsel, Advocate Dr. K. Shivaram appeared for the Petitioner.
The counsel, Advocate Suresh Kumar represented the respondent.