Law:

Section:

I. Section 149 of the Income-tax Act, 1961 - Income escaping assessment - Time limit for issuance of notice for - Assessment year 2003-04 - Principles governing jurisdiction of Assessing Officer to reopen assessment beyond four years from end of assessment year The judicial pronouncements, the following principles can be culled out : (i) To confer jurisdiction to the Assessing Officer to reopen the assessment under section 147 of the Income-tax Act beyond four years from the end of the assessment year, the following two conditions must be satisfied (a) that the Assessing Officer must have reason to believe that the income chargeable to tax has escaped assessment; and (b) that the same was occasioned, on account of either failure on the part of the assessee to make a return of his income for that assessment year, or to disclose fully and truly all material facts necessary for assessment of that year; (ii) both the above conditions are conditions precedent and must be satisfied simultaneously before the Income-tax Officer can assume jurisdiction to reopen the assessment beyond four years of the end of the assessment year; (iii) such reasons must be recorded and if the reasons recorded by the Assessing Officer do not disclose satisfaction of these two conditions, reopening notice must fail; (iv) there is no set format in which such reasons must be recorded. It is not the language but the contents of such recorded reasons which assumes importance. In other words, a mere statement that the Assessing Officer had reason to believe that certain income has escaped assessment and such escapement of income was on account of non-filing of the return by the assessee or failure on his part to disclose fully and truly all material facts necessary for assessment would not be conclusive. Nor absence of any such statement would be fatal, if on the basis of reasons recorded, it can be culled out that there were sufficient grounds for the Assessing Officer to hold such beliefs; (v) such reasons must emerge from the reasons recorded by the Assessing Officer and cannot be supplied through an affidavit filed before the court. However, the Gujarat High Court in the case of Aayojan…

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