THE COMMISSIONER OF INCOME TAX II vs. MOONBEAM FINVEST LEASE LTD.

IN THE HIGH COURT OF DELHI AT NEW DELHI . 12.09.2008 . . . Present: Mr Sanjeev Sabharwal, Advocate for the Appellant. + ITA No. 1145/2008 . This appeal is directed against the Income Tax Appellate Tribunal?s order dated 31.01.2008 pertaining to the assessment year 1998-99. The sole issue before the Tribunal was with regard to the validity of the proceedings under Section 147 of the Income Tax Act, 1961. Since the said provision was invoked after a period of four years from the end of the assessment year, the proviso thereto become applicable. The Tribunal noted the fact that the assessment had been completed under Section 143 (3) of the said Act and that the assessee had disclosed the lease equalization account as well as the computation in respect thereof. The Tribunal observed that the Assessing Officer had noticed this and had required the assessee to answer to a detailed questionnaire. Question No. 18 of the questionnaire specifically related to the lease equalization account. The Assessing Officer required the assessee to give a brief note on the same. The assessee responded and stated that the accounting was done on the basis of the guidelines of the Institute of Chartered Accountants of India and was as per practice of the previous years. In view of this, the Tribunal returned a clear finding that the reassessment was initiated on a mere change of opinion and, therefore, the reassessment proceedings had to be held to be invalid. Apart from this fact, the Tribunal also returned a finding that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Consequently, on both counts, the Tribunal held the initiation of the proceedings under Section 147 of the said Act to be invalid. The Tribunal has correctly applied the law and has returned findings of fact. We see no reason for interfering with the same particularly, as no substantial question arises for our consideration. The appeal is dismissed. . . BADAR DURREZ AHMED, J . . . RAJIV SHAKDHER, J . September 12, 2008 mk 16 to 19 .