Allanasons Limited vs. DCIT (Bombay High Court)

(i) We are of the view that the words “failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment” is not a magician’s mantra which alone would give jurisdiction to reopen an assessment. Just as it would not be open to the revenue to urge that the mere use of words ‘failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment’, the absence of the above words will not by itself oust the jurisdiction to reassess. We are of the view that if on reading of the reasons recorded as a whole implies/ points/ evidences a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, then the exercise of jurisdiction cannot be faulted. We, therefore, do not accept the submission that the absence of the words ‘failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment’ would make the issue of notice under Section 148 of the Act without jurisdiction.

(ii) However, in the facts of the present case, the reasons as recorded, when read as a whole do not indicate even remotely any failure on the part of the Petitioner to disclose fully and truly any material facts necessary for assessment. The only reason recorded in this case by the Assessing Officer for reopening is the subsequent decisions of Tribunal and Courts. There is no whisper of any facts indicating that the Petitioner had not having disclosed any fact which led to a reasonable belief that income chargeable to tax has escaped assessment. Therefore, in the present facts, we are clearly of the view that the reasons as recorded for issuing the impugned notice do not satisfy the jurisdiction requirement in case of notice issued beyond a period of four years from the end of the relevant Assessment Year