The court established that failure to fully disclose material facts allows authorities to reopen tax assessments beyond the standard four-year period, reinforcing the necessity of complete transparency in financial reporting.

COMMON JUDGMENT

(Judgement of the Court was delivered by G.R.SWAMINATHAN, J.)

1. These writ appeals are directed against the common order dated 30.10.2019 whereby WP(MD)Nos.19202 of 2018, 19825 of 2018 & 19826 of 2018 were allowed. M/s.Dalmia Cement (Bharat) Limited is the petitioner in W.P.(MD)No.19202 of 2018. M/s.Dalmia Bharat Limited is the petitioner in W.P.(MD)No.19825 of 2018. M/s. Dalmia Power Limited is the petitioner in W.P.(MD)No.19826 of 2018.

2.The aforesaid companies had filed their returns of income for the assessment year 2011-2012. They had reported business losses and adjusted their book profits. Following the search conducted by the Income Tax Department under Section 132 of the INCOME TAX ACT , 1961, notice under Section 153A of the Act was issued to M/s.Dalmia Cement (Bharat) Limited (hereinafter referred to as DCBL). DCBL filed reply on 03.10.2013 reiterating the figures set out in their original returns. On 14.10.2013, notice under Section 143(2) of the Act was issued. On the same day, notice under Section 142(1) of the Act along with the questionnaire was issued. The assessee offered its reply which was followed by issuance of show cause notice on 24.10.2013. The assessee filed their reply on 24.01.2014. Thereafter, order under Section 153A r/w Section 143(3) of the Act was passed on 31.03.2014. Challenging the same, the assessee filed an appeal. The appeal was partly allowed and based on the same, demand notice under Section 156 of the Act was issued on 31.03.2014. On 31.07.2015, the appeal order was implemented and the search assessment attained finality. The consequent order giving effect to it was passed on 18.08.2015.

3.While so, on 28.03.2018, a tax evasion petition was received from the investigation unit. It indicated escapement of income for the assessment year 2011-2012. The assessing officer, therefore, proposed to reopen the assessment proceedings. After the Principal Commissioner of Income Tax granted approval under Section 151 of the Act, notice under Section 148 of the Act was issued on 31.03.2018. The assessee offered their reply on 16.04.2018 and demanded to know the reasons that led the authority to believe that the income of the assessee-company for the assessment year 2011-12 had escaped assessment. Vide communication dated 11.05.2018 addressed to DCBL, the reasons for re-opening the assessment were furnished. The assessee offered their objection. On 26.07.2018, the Assistant Commissioner of Income-Tax Circle No.1, Trichy passed order rejecting the assessee's objections. Challenging the same, DCBL filed W.P.(MD)No.19202 of 2018. The other writ petitioners also received similar notices under Section 148 of the Act. They also wanted to know the reasons as to why the authority came to believe that the income of the assessee-companies for the assessment year 2011-12 had escaped assessment. The reasons were furnished and in response thereto, the assessee-companies offered their objections. Their objections were also rejected vide orders dated 30.07.2018. Challenging the same, W.P.(MD)No. 19825 of 2018 and W.P.(MD)No.19826 of 2018 were filed. As already mentioned, all the three writ petitions were allowed on 30.10.2019.

4.The background facts that led to initiation of proceedings may be summarised as follows :

KKR Mauritius Cement Investment Limited invested a sum of Rs. 500/- crores in the year 2010-11 and was allotted 3,79,19,