The Madras High Court held that reassessment notice issued after four years limitation period are liable to be set aside if there is no failure on part of assessee in disclosing all material facts.
Case Title: S. Uttam Chand v ACIT
Case No: W.P. No.6921 of 2022
Decided on: 06 November, 2023
CORAM: HON’BLE MR. JUSTICE KRISHNAN RAMASAMY
Introduction
The Madras High Court while hearing a plea by petitioner regarding reassessment proceedings held that reassessment notice issued after four years limitation period are liable to be set aside if there is no failure on part of assessee in disclosing all material facts.
Facts of the Case
The petitioner challenged the reassessment notice issued by the respondents on 30th March, 2021 regarding the issue of Assessment Year 2013-2014 that as per Section 147 of Income Tax Act, 1961 only within four years limitation period, the respondents are empowered to reopen an issue under the conditions that the assessee disclosed all material facts regarding income.
The petitioner or assessee reported his income in the return filed for the Assessment Year 2013 – 2014 on 25th September, 2013. He also furnished the details of exempted income in capital gains in the sale of Kyanallur agricultural land as Rs.9,96,57,892/-. He also provided the Assessing Officer with documents of ledger accounts of Kyanallur property purchase, copy of the sale deed of kyanallur property and copy of the sale deed of Kyanallur property.
The respondents contented that the producing sale deed of agricultural land under explanation (1) to Section 147 of Income Tax Act, 1961 does not mean as producing all the material facts regarding income and the reassessment notice was issued only for clarity purposes and has no loss to the petitioner.
Courts analysis and decision
The court firstly analysed Section 147 of Income Tax Act, 1961 and explained that under Section 147 of the Act reassessment is allowed when the assessee does not file a return under Section 139, does not reply to a notice under sub-section (1) of Section 142, does not provide all relevant information that is required for the reassessment of that particular assessment year, or does not provide all relevant information truthfully and completely.
The court held that the reassessment notice is liable to be set aside as the petitioner submitted all the details relating to sale of the agricultural land and all the particulars regarding to sale of agricultural land before the Assessing officer and there was no failure on part of the petitioner in submitting any material facts to not make the reassessment notice held liable.
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Written by- Rupika Goundla
