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2014 (8) TMI 865 - AT - Income TaxReopening of assessment u/s 147 –Change of opinion - Period of limitation - Realization of export proceeds and of processing charges – Computation of deduction u/s 10B – Held that:- The reasons are totally silent with regard to any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year - From the reasons recorded it is also apparent the assessment is sought to be reopened on the ground that while computing the deduction u/s. 10B, the export proceeds not realized before the specified date were not deducted from the export turnover and processing charges were not included in the total turnover and hence there was reason to believe that income chargeable to tax has escaped assessment for the assessment years under consideration - There is nothing on record of assessment order to indicate that the proceedings u/s.147 were sought to be reopened by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the assessment year under consideration - All the material facts i.e. unrealized convertible foreign exchange before the specified date, non-inclusion of processing charges in the total turnover were duly disclosed by the assessee in the computation of deduction u/s.10B, Form No.56G filed with the original return of income and from the same material facts, the Assessing Officer in the present order worked out the excess claim u/s.10B - The details of foreign exchange realization and the processing charges were very much available on record at the time of passing the original assessment order and also at the time of passing the reassessment order. When all material facts were furnished by the assessee, even if the assessee erroneously claimed excess deduction u/s.10B, it would not be a case of failure to disclose fully and truly all materials facts unless certain additional information has come to the notice of the AO subsequent to passing of original assessment order - There is nothing on record to suggest that any new material had come on record on the date of recording the reasons, if no new information had been received by the AO - So it could not be inferred that there is failure on the part of the assessee to disclose material facts - the condition precedent for a valid exercise of the power to reopen the assessment, after a lapse of four years from end of the relevant Assessment Year, is mistake in the present case - An exceptional power has been conferred upon the Revenue to reopen an assessment after a lapse of four years. Under the proviso to section 147, where an assessment has been made u/s.143(3), no action shall be taken under that section after expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by the reason of failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment, for that assessment year - This is a jurisdictional requirement which must be fulfilled when the assessment has sought to be reopened beyond four years - The existence of jurisdictional condition must be indicated in the reasons which are furnished to the assessee - The fulfillment of the condition is a pre-requisite and if it is absent, an assessment cannot be reopened beyond four years - The AO cannot improve upon the reasons for reopening assessment or bridge the lacunae later - If reasons disclosed do not indicate fulfillment of jurisdictional requirement, the reopening is invalid - the AO was not legally justified to reopen the assessment u/s.147 of Act on the basis of reasons recorded after expiry of four years under the relevant assessment year – the notice issued u/s.148 of Act for assessment years was bad in law and rightly quashed by CIT(A) - the assessment order passed on the basis of invalid reopening of assessment stands rightly annulled – Decided against Revenue.
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