Notice for re-assessment quashed by Hon’ble HC, Bombay as the Assessee fully, truly disclosed all material facts

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In M/s Ananta Landmark Pvt. Ltd. v. Deputy Commissioner of Income Tax & Ors. [W.P. (C) No. 2814 of 2019 decided on September 14, 2021] Hon’ble Bombay High Court held that for an assessment to be reopened beyond a period of four years there must  an omission or failure on part of the assessee to disclose fully and truly all material facts necessary for the assessment and should not merely be the change of opinion of Assessing Officer (“AO”).

M/s Ananta Landmark Pvt. Ltd. (“the Petitioner”) challenged the re-assessment notice dated March 26, 2019 (“Re-assessment Notice”) passed under Section 148 of the Income Tax Act, 1995 (“IT Act”) on the ground that the Petitioner has not failed to fully and truly disclosed material fact which is a  pre-requisite for re-opening of assessment beyond 4 years.

The Hon’ble HC, Bombay noted that, when the primary facts necessary for assessment are fully and truly disclosed, the AO is not entitled on change of opinion to commence proceedings for reassessment.

Noted, that the reason for Re-assessment was not mentioned by the Department in the letter dated May 28, 2019 and further noted that in order dated September 30, 2019 AO himself admitted that all the details were fully disclosed.

Held that, it is not the case where the assessment is sought to be re-opened on the reasonable belief that assessee has not truly and fully disclosed all material facts but is a case where assessment is sought to be re-opened on account of change of opinion of the AO.

Further held, that in the present case there was no omission or failure on the part of the Petitioner to disclose fully and truly all material facts necessary for the assessment and cannot be held as per IT Act, that the condition precedent to the reopening of an assessment beyond a period of four years has been fulfilled.

Further ordered, that notice dated March 26, 2019 issued under Section 148 of the Act, seeking to reopen the assessment for the Assessment Year 2012-2013, and the order dated September 30, 2019 are liable to quashed and set aside.

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