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The Bombay High Court in W.P.(C) 2770/2022, has that the AO can’t take or make recourse to reopen the assessment to indemnify the error resulting from his oversight wherein the failure was committed on the part of the assessing officer during the assessment proceeding.

The brief facts about this case are:

• The petitioner assessee is in the business of trading shares and stock.
• The petitioner challenged the action of the department for issuing notice under Section 148 seeking to reassess the petitioner’s income for Assessment Year 2015-16.
• The assessee pleaded that the notice u/s 148 has been issued after the expiry of more than 4 years from the end of the relevant AY and an assessment under Section 143(3) of the act has been made further as per the proviso, reassessment is impermissible after the expiry of 4 years from the end of the relevant assessment year, where assessment under Section 143(3) has been made unless there has been a failure on the part of the petitioner to truly and fully disclose material facts. Though the words failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment’ have been used in the reasons recorded, those have been used only to get over the fetters placed by the proviso to Section 147.
• Decision: The court held that the entire basis for forming a reason to believe there was an escape of income is from the records filed by the petitioner with the return of income. There has been no failure on the part of the assessee to truly and fully disclose the primary facts(In the favour of the assessee).