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2014 (11) TMI 103 - AT - Income TaxReopening of assessment u/s 147 – Notice issued beyond four years - Held that:- The AO has issued the impugned notice u/s 148 of the Act with a view to examine the nature of export incentives shown by the assessee company - the income chargeable to tax had escaped assessment for such assessment year by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment for that AY – in Hindustan Lever Ltd. v. R B Wadkar, Asst. CIT [2004 (2) TMI 41 - BOMBAY High Court] - the proviso to section 147 comes to the aid of the appellant and would render the issue of notice u/s 148 after the expiry of 04 years as void and illegal - assessment was reopened after expiry of four years from the end of the relevant assessment year i.e. AY 2001-02 - As per proviso to section 147 of the Act, the assessment can only be reopened after the period of four years from the end of the relevant assessment year, if the AO makes out a case that the income chargeable to tax has escaped assessment for such assessment year by the reason of failure on the part of the assessee either to make a return under section 139 of the Act or in response to notice under sub-section (1) of section 142 of the Act or 148 of the Act or to disclose fully and truly all material facts necessary for its assessment for that AY. The assessment was sought to be reopened on the basis of the amendment brought in section 80HHC of the Act by Taxation Law (Amendment) Act, 2005 whereas the assessment was completed under section 143(3) of the Act on 19.7.2002 on the return filed on 31.10.2001 - at the time of filing the return, assessee cannot anticipate or visualize any future amendment which can be formed to be the basis for reopening assessment on the ground that income has escaped assessment by the reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment - reopening on the basis of the amendment after a period of four years from the end of the AY is not possible – the order of the CIT(A) is upheld - Decided against revenue. Reopening of assessment u/s 147 - Assessment was reopened after expiry of four years - Held that:- The AO has rejected contentions of the assessee with regard to the validity of the reopening of assessment on the ground that the assessment was reopened after expiry of four years from the end of the assessment year - proviso to section 147 of the Act would not apply, but as decided in Avani Exports vs. CIT [2012 (7) TMI 190 - GUJARAT HIGH COURT] - through which retrospective amendment was quashed, the assessment cannot be reopened on the basis of the said retrospective amendment - Since the basis for reopening of the assessment has been quashed, the issue of reopening either before or after four years from the end of the relevant assessment year becomes irrelevant - reopening, on the basis of the retrospective amendment of section 80HHC of the Act by the Taxation Law (Amendment) Act, 2005, is illegal and the assessment framed consequent thereto is also illegal and deserves to be annulled – thus, the order of the CIT(A) is upheld – Decided against revenue. Allowability of deduction u/s 80HHC – Held that:- The assessee was asked to produce grant of extension of time, but no evidence has been furnished in this regard by the ld. counsel for the assessee - in the absence of any evidence with regard to the extension of time, the contention of the assessee cannot be accepted that time was extended for realization of the amount - the findings of the CIT(A) is set aside and the order of the AO is restored that the unrealized amount do not qualify for deduction u/s 80HHC of the Act.
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