Law:

Section:

Section 147 of the Income-tax Act, 1961 - Income escaping assessment - General - Assessment year 2004-05 - Where assessee had claimed depreciation on ETP system alleged to have been purchased from a party and in later year, purchase of ETP from same party was found to be bogus, Assessing Officer was justified in reopening assessment even beyond a period of four years [In favour of revenue] During the course of the assessment proceedings for assessment year 2008-09 the assessee had claimed depreciation on the ETP System. The Assessing Officer issued a notice under section 133(6) and elicited information from the alleged 'P' vendor that no such equipment was supplied; that the bills which were produced were fabricated; and that no payment had been made by the assessee to the alleged vendor. On the basis of that material, the Assessing Officer reopened assessment for the assessment year 2004-05 during which the assessee had claimed depreciation on ETP system alleged to have been purchased from same party 'P'. The assessee challenged reopening contending that there was nothing to indicate that the bills for assessment year 2004-05 were fabricated; and (ii) the jurisdictional condition for the reopening of an assessment beyond a period of four years of the end of the relevant assessment year was absent in the instant case. Held that the alleged purchase during assessment year 2004-05 was from the same party from whom the assessee claimed to have purchased an ETP system for assessment year 2008-09. The latter purchase from the same vendor was found to be bogus. This was a case where the Assessing Officer had tangible material which had come before him in the course of the assessment proceedings for assessment year 2008-09 and which would form the subject-matter of further investigation once the assessment proceedings for assessment year 2004-05 were reopened. The exercise of the power to reopen the assessment, though beyond a period of four years, was, therefore, not in excess of jurisdiction so as to warrant the issuance of a writ of certiorari. CASES REFERRED TO Dr. Amin Pathology Laboratory v. P.N. Prasad, Jt. CIT (No. 1) [2001] 252 ITR 673 (Bom.) (para 9).…

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