Reopening us 148 not justified when there was no failure on part of assessee to fully disclose all material facts
The assessee has raised the following substantive grounds of appeal:
i. The ld. CIT(A) has erred in upholding the order u/s 143(3) / 148. The appellant contends that there is no tangible material brought on record for alleging income escaping assessment. Consequently, the reassessment order is wrong and bad in law, illegal, arbitrary and without jurisdiction and has to be quashed.
ii. The appellant contends that there is no omission or failure on the part of the assessee in disclosing full and true particulars of income. Hence, the reassessment is wrong and bad in law and has to be annulled.
iii. The re-assessment proceedings are based on mere change of opinion on an already completed assessment u/s 143(3) and therefore are without jurisdiction and should be cancelled.
iv. The CIT(A) has erred in law and on facts in disallowing the claim of performance warranty. The appellant contends that it is an ascertained liability and should be allowed.
v. CIT(A) has erred in confirming the order of the AO with regard to re-computing the book profit u/s 115JB by adding performance warranty and provision for deferred tax liability which is wrong and bad in law. Such adjustments are not contemplated under section 115JB and therefore should be deleted.
vi. The appellant prays that the order of CIT(A) was received on 25.4.2017 and appeal filed is within time. However, as the CIT(A) order is dated 9.3.2015, the delay due to non-receipt of order may kindly be condoned for which assessee is enclosing a separate affidavit.”
The main contention is the amendment to section 115JB of the Act by the Finance Act, 2009 w.r.e 01.04.2001 by which Explanation 1 to the section has been inserted. The book profit u/s 115JB of the Act had to be reworked out.
In the aforementioned judgment of the Hon’ble Gujarat High Court [supra] the Hon’ble High Court has held that beyond a period of 4 years, retrospective amendment u/s 115JB of the Act could not be a ground for reassessment. Such legal proposition requires no authority of law.
In light of the aforementioned decisions, court considered view that all the relevant facts were available on record and it could not be said that at the time when the assessee filed return, he had failed to disclose fully and truly all material facts necessary for assessment because the amendment which was introduced retrospectively was not there.
Court held that there was no failure on the part of the assessee to fully and truly disclose all material facts to justify the reopening of the completed assessment.
Therefore, notice dated 04.12.2012 issued u/s 148 of the Act was set aside and quashed.
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