AVISHKAR NIRMAN PVT. LTD.,KOLKATA vs. I.T.O., WARD - 13(1), KOLKATA

It was submitted by the Ld.AR that the assessee is challenging the reopening of the assessment. It was submission that the original assessment u/s.143(3) of the Act came to be completed in the case of the assessee on 28/01/2016. It was submission that notice u/s.148 of the Act had been issued to the assessee on 19/03/2020. It was he submission that this was beyond the period of 4 years from the end of the relevant assessment year. It was submission that the in view of provision of Section 147 of the Act, the AO must record the failure on the part of the assessee to disclose truly and fully all material facts as required for the assessment.

3 4 3. It was submission that the AO has not mentioned any failure on the part of the assessee to disclose truly and fully all material facts as required for the assessment. It was submission that the reopening is bad in law and the same is liable to be quashed. He relied upon the decision of the Honb'le Supreme Court in the case of CEAT Ltd., reported in (2020) 449 ITR 171 (SC).

In reply, Ld. Sr DR vehemently supported the order of the AO and CIT(A). It was the submission that the information had been received from the investigation wing and it was on the basis of such information the reopening has been done. It was the prayer that the reopening must be upheld.

We have considered the rival submission. Coming to the issue with regard to the information received from the investigation wing, one of the 5 primary requirement in respect of reopening is that the AO must apply his independent mind. The reasons recorded clearly shows that there is no independent application of mind by the AO. He has blindly extracted the information receipt from the DDIT(IV)/Kol/U-2(1)/Kolkata/Nawal) and there is no application mind in regard to the said information. Now it is also an admitted fact that the original assessment in the case of the assessee was completed u/s.14(3) of the Act on 28/01/2016 and the reason for the selection was on account of large share premium. The reasons recorded by the AO also shows that the issue is in regard to large share premium. A perusal of the reasons recorded also clearly shows that there is no allegation by the AO, much less any evidence to show, that there was failure on the part of the assessee to disclose truly and fully all materials facts as required for the assessment. This being, so in view of the principle laid down by the Hon’ble Supreme Court in the case of CEAT Ltd., referred to supra, we are of the view that the reopening of the assessment by issuance of notice u/s.148 of the Act is unsubstantiated and consequently bad in law. Accordingly, the assessment passed in consequence to the invalid notice issued u/s.148 of the Act, also stands quashed.