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2006 (10) TMI 126 - HC - Income TaxProceedings initiated u/s 147 - income escaping assessment - Notices issued u/s 148 - mere change of opinion - assessment sought to be reopened after four years - business of subscription agent of foreign technical and scientific journals and other information products - claim for deduction u/s 80-O - HELD THAT:- We find that in respect of the assessment years 1992-93, 1993-94 and 1994-95 the notices u/s 148 of the Act have been issued on October 25,2001, i.e., much after the expiry of the period of four years from the end of the relevant assessment year. It can be justified only if there has been failure on the part of the petitioner to disclose fully and truly all material facts necessary for that assessment year. It is not in dispute that the petitioner had in its letter dated October 7, 1993, filed during the course of the assessment proceedings for the assessment year 1992-93, had made a claim u/s 80-O of the Act by stating that it is also extending its service to several customers outside India and earning commission from foreign publishers in convertible foreign exchange for such service. The assessing authority apart from finding that the petitioner had received commission from foreign enterprises for services rendered outside India, had also found that it had specialised in marketing scientific and technical knowledge and has developed several database with the help of advance computers concerning various research projects, activities, books, periodicals, corporate publications, technical reports, patents and standards for use by its foreign clients and has received commission in convertible foreign exchange in U. S. dollars and U. K. pounds. The claim was accepted and the deduction u/s 80-O of the Act was accordingly allowed. In respect of the assessment years 1993-94 and 1994-95, the assessing authority did not dwell in the matter in detail but mentioned that the claim is in respect of commission earned for the services rendered outside India as in the past. Thus, it cannot be said that the petitioner had not made full and true disclosure of all material facts in the assessment years 1992-93, 1993-94 and 1994-95. In the reasons recorded by the respondent for forming the belief that the petitioner was not entitled to get deduction, the respondent has not found that the basis on which the deduction has been allowed, viz., specialising in marketing scientific and technical knowledge and developing several database with the help of advance computers concerning various research projects, activities, books, periodicals, corporate publications, technical reports, patents and standards for use by its foreign clients was false. In this view of the matter, the principles laid down in the case of Parikh Petrol Chemical Agencies P. Ltd. v. Asst. CIT [2003 (2) TMI 14 - BOMBAY HIGH COURT] is squarely applicable and, therefore, the notices dated October 25, 2000, issued u/s 148 in respect of the assessment years 1992-93 to 1994-95 appear to have been issued only on the basis of mere change of opinion and are wholly illegal and without jurisdiction. The principles laid down by the apex court in the case of Phool Chand Bajrang Lal [1993 (7) TMI 1 - SUPREME COURT] would, therefore, not apply in the present case as there is no information on record to show that the claim made by the petitioner was false. So far as the notice dated September 4, 2000, issued under section 148 of the Act for the assessment year 1997-98 is concerned, it is within four years from the end of the relevant assessment year. In this case, the assessment has not been made u/s 143(3) of the Act and only an intimation u/s 143(1)(a) of the Act has been sent to the petitioner. The claim of deduction u/s 80-O of the Act had only been processed without there being any application of mind. The reasons recorded by the respondent, insofar as the assessment year 1997-98 is concerned, cannot be said to be based on mere change of opinion. The principles laid down by this court in the case of Pradeep Kumar Har Saran Lal [1997 (3) TMI 62 - ALLAHABAD HIGH COURT] is squarely applicable in the present case. They are based on relevant consideration and, therefore, it cannot be said that the notice dated September 4, 2000, is without jurisdiction. Thus, the writ petition succeeds and is 4 allowed in part. The notices dated October 25, 2000, issued u/s 148 of the Act and consequential proceedings taken in pursuance thereof in respect of the assessment years 1992-93 to 1994-95 are hereby quashed. However, the notice dated September 4, 2000, issued for the assessment year 1997-98 is upheld.
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