Delhi High Court on section 147 of the Income-tax Act, 1961

Section 147, read with sections 2 (22)(e) and 143 of the Income-tax Act, 1961 – Income escaping assessment – Non disclosure of primary facts – Assessment year 1996-97 – Assessing Officer sought to reopen assessment proceedings under sections 147/148 on ground that assessee had received certain loan from ‘M’ Ltd which was really in nature of deemed dividend under section 2(22)(e) and, thus, said amount escaped assessment under section 143(3) – Tribunal, however, set aside reassessment proceedings – On appeal, it was noted that books of accounts of assessee were produced on more than one occasion before Assessing Officer wherein it was mentioned that certain amount was received by assessee as unsecured loan from ‘M’ Ltd. – Tax audit report was also filed – Besides Tribunal noted that revenue was not able to point out any material that could have bearing on applicability of section 2(22)(e) which was not furnished by asessee – Whether, in view of above, Tribunal rightly held that initiation of reassessment proceedings was without any jurisdiction – Held, yes FACTS The Assessing Officer sought to reopen the assessment proceedings under sections 147/148 on ground that the assessee had received certain loan from ‘M’ Ltd which was really in the nature of deemed dividend under section 2(22)(e) and, thus, said amount of dividend escaped assessment made under section 143(3). Commissioner (Appeals) upheld the reopening of assessment. On second appeal, the Tribunal, however, set aside the reassessment proceedings. On revenue’s appeal: HELD It was found from a perusal of order passed by the Tribunal that the original assessment was framed under section 143(3). The assessee was required to file the list of shareholders with the complete address as on 31-03-1996, which it did, the assessee also filed confirmation dated 29-02-1998 of ‘M’ Ltd. certifying its closing balance; the confirmation given by ‘M’ Ltd. also mentioned its PAN Number and Circle where it was assessed; the books of accounts of the assessee were produced on more than one occasion before the Assessing Officer; it was also mentioned that an mount of Rs.1,96,68,192 was received by the assessee as an unsecured loan from ‘M’ Ltd; the tax audit report was also filed by the assessee. The Tribunal noticed that the revenue was not able to point out anything to suggest which material that could have a bearing on the applicability of section 2(22)(e) was not furnished by the assessee. [Para 6] It was apparent from a perusal of the order passed by the Tribunal that all the relevant material available with the assessee in this regard was placed before the Assessing Officer and, therefore, it could not be said that the assessee had not furnished full and true particulars of its income. Consequently, there was no reason to discard the view taken by the Tribunal that the re-assessment proceedings as well as the notice issued to the assessee for reassessment were without any justification. [Para 7] No substantial question of law arose. [Para 8] Therefore, the instant appeal was to be dismissed.