DCIT-2(1)(1), MUMBAI, MUMBAI vs. BANK OF BARODA , BANK OF BARODA

Facts

The Revenue filed appeals challenging the CIT(A)'s order which quashed the reassessment proceedings. The Revenue contended that the reopening was based on a revenue audit objection, which constitutes tangible material. The assessee argued that there was no new tangible material and no failure to disclose material facts by the assessee.

Held

The Tribunal held that the reassessment proceedings were initiated after the expiry of four years from the end of the assessment year. The Revenue failed to establish that there was a failure on the part of the assessee to disclose fully and truly all material facts, which is a prerequisite for reopening beyond four years. The Tribunal relied on the decision of the jurisdictional High Court in Godrej & Boyce Manufacturing Co. Ltd.

Key Issues

Whether the reopening of assessment beyond four years was valid without establishing failure of the assessee to disclose material facts, and if an audit objection constitutes tangible material for reopening.