TMI Blog2014 (4) TMI 123X X X X Extracts X X X X X X X X Extracts X X X X ..... ith retrospective effect, would not authorize the AO to reopen the assessment previously framed after scrutiny beyond the period of four years from the end of the relevant assessment year unless the conditions laid down under the proviso to Section 147 of the Act are fulfilled – Relying upon Denish Industries Limited v. IncomeTax Officer [2004 (7) TMI 72 - GUJARAT High Court] - An assessee cannot be imputed with clairvoyance - When the return was filed, the assessee could not possibly have known that the decision on the basis of which cash compensatory support had been claimed as not amounting to the assessee’s income ceased to be operative by reason of retrospective legislation - there was no failure on the part of the assessee to disclose truly and fully all material facts - Therefore, the condition precedent for invocation of the powers under section 147 read with sections 148 and 149 was not fulfilled – thus, the notice is set aside – Decided in favour of Assessee. - Special Civil Application No. 2160 of 2014 - - - Dated:- 18-3-2014 - Akil Kureshi And Sonia Gokani,JJ. For the Petitioner : Mr. SN Soparkar Sr. Advocate with Mr. B. S. Soparkar For the Respondent : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a statutory body nor local authority. Thus, the condition laid down in Section 80IA[4](i)(a) of the Act was not fulfilled. The assessee was only subcontracted the project alloted to GSRDC by the State Government. Further, the Government notification authorizing assessee to collect toll was also issued to GSRDC with copy to the Collector and not to the assessee company. Thus, in view of nonfulfillment of the conditions of Section 80IA of the Act, the deduction allowed to the tune of Rs. 3,52,02,368/- was irregular and liable to be disallowed. The underassessment of Rs. 3,52,02,368/- involved income tax as under : I.Tax @ 30% on Rs. 3,52,02,368/ 1,05,60,710 Surcharge 10% 10,56,071 Education Cess @ 2% 2,32,336 LESS : I.Tax Charged under 115JB 35,46,507 Income Tax [Differential] 83,02,610 Interest U/s. 234 @ 1% month on Rs. 83,02,610 from 01.04.2006 to 22.12.2008 ie., 33 months [33%] 27,39,861 Total Short levy of Income Tax 1,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Thus, the entire formation of belief is founded on the material already on the record. Therefore, in addition to there being no suggestion by the Assessing Officer that income chargeable to tax had escaped assessment for the reason of the assessee failing to disclose truly and fully all material facts, demonstrably, from the record it emerges to the contrary. The notice for reopening having been issued beyond the period of four years from the end of the relevant assessment year and original assessment having been completed after scrutiny, this additional requirement emerging from proviso to Section 147 of the Act that income chargeable to tax had escaped assessment for the failure of the assessee to disclose truly and fully all material facts, must be satisfied. In that view of the matter, we are of the opinion that the notice for reopening lacks validity. Counsel for the Revenue, however, raised an unusual contention. He submitted that Section 80IA of the Act was amended by the Finance Act of 2009 with retrospective effect from 1st April 2000 and to such amendment, an explanation was added to the said section under which a person acting as a works contractor would not be eli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above discussion, we are of the view that there was no failure on the part of the assessee to disclose truly and fully all material facts. Therefore, the condition precedent for invocation of the powers under section 147 read with sections 148 and 149 was not fulfilled. The impugned notice is, therefore, without any authority of law. In case of Sadbhav Engineering Limited v. Deputy Commissioner of Income Tax, reported in [2011] 333 ITR 483 (Guj), the Court held and observed as under : In the facts of the present case, relevant assessment years are 2003-04 and 2004-05. The notice under section 148 of the Act relating to assessment year 2003-04 has been issued on 29.03.2010, whereas the notice under section 148 of the Act relating to assessment year 2004-05 has been issued on 29.4.2010. Computing the period between the end of the relevant assessment years and the date of issuance of the notices under section 148, it is evident that both the notices have been issued beyond a period of four years from the end of the relevant assessment years. The first proviso to section 147 of the Act, lays down that where an assessment under subsection (3) of section 143 or the said sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and truly all material facts necessary for its assessment for assessment years under consideration. The respondent in its affidavit in reply also has not disputed the fact that there is no failure on the part of the petitioner to disclose fully and truly all material facts. Only by way of submission advanced before the Court it is contended that in the light of the amendment of section 80IB, it is deemed that the petitioner has failed to disclose the correct facts. As to whether or not there is any failure on the part of the assessee in disclosing fully and truly all material facts necessary for his assessment, is a matter of fact and there can be no deemed failure as is sought to be contended on behalf of the respondents. In the circumstances, in absence of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment for the assessment years under consideration, the notices under section 148 of the Act having been issued after the expiry of a period of four years from the end of the relevant assessment years, the very initiation of proceedings under section 147 of the Act stand vitiated and as such cannot be sustained. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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