Nirupa Udhav Pawar (Smt) . v. ACIT (2021)439 ITR 541 ( Panji Bench ) (Bom) (HC)

S.147: Reassessment – After the expiry of four years – Capital gains – Sale of property – No failure to disclose material facts – Validity of notice to be examined on the basis of reasons recorded wile issuing the notice – The notice cannot be justified by filing affidavit or by oral submissions – Notice was held to be not valid [ S. 45, 148 , Art , 226 ]

Allowing the petition the Court held that there was no omission on the part of the assessees to disclose fully or truly all the material facts necessary for the assessment year 2010-11. There was nothing on record to suggest that the assessees were following the accounting system based on accruals rather than receipts. Rather, the material on record placed by the assessees themselves before the Department indicated that the sale deed dated February 2, 2010 was subject to realization of the cheque amount. There was nothing in this material that could constitute a ground for a reason to believe that there was a failure to disclose a material fact and further, that income had escaped assessment for the assessment year 2010-11. The reasons stated by the Assessing Officer spoke about the receipt of Rs. 3 crores by the assessees during the assessment year 2010-11. However, based on the very material relied upon by the Assessing Officer, this contention was virtually given up and a new reason about accrual was sought to be put forward. The notice of reassessment was not valid.( AY.2010-11)