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2015 (4) TMI 341 - HC - Income TaxRe-opening of assessments - proceedings under Section 147 initiated to reassess escaped income, beyond four years but within six years - assessee's failure to "fully and truly disclose all material facts" - whether the exemption claimed under Section 10A was applicable to the Company? - Held that:- The assessee having claimed such exemption on the first assessment year after incorporation and commencement of business, necessarily the constitution of the assessee Company is the most relevant factor in deciding the claim of exemption. The BCA between the holding Company and the assessee Company is the essential document which discloses the factum of commencement of business. De hors that, for the assessment year 2003-04, it has been unequivocally established that the BCA was before the Assessing Officer even before completion of the assessment. The production of the said document, as is evident from Exhibit P13, is pursuant to a hearing held on 19.12.2005. The Revenue does not dispute the factum of the BCA being available in the files before the assessment was completed for the assessment year 2003-04 and the subsequent years beginning from assessment year 2004-05. Hence, there could be no contention raised as to there being no full and true disclosure of material facts. If essential and basic documents which are to be necessarily examined before grant of exemption, if not gone into, then it is the default of the officer and not the assessee as held in Calcutta Discount Co. Ltd. (1960 (11) TMI 8 - SUPREME Court). Further, as held by the Hon'ble Supreme Court, here too the grant of exemption, is an inferential conclusion of the Assessing Officer and it cannot be said that the assessee while claiming exemption under Section 10A should have, in the same breath, pointed out that they are not entitled to it. This Court would not look into the question of whether there is a change of opinion or not, since the assessment of a subsequent year, which was challenged on the ground of exemption being disallowed, assailed as a mere change of opinion, has been declined consideration under Article 226 and the assessee relegated to the statutory remedy. This Court, hence, would not refer to the decisions on that aspect too. Any observation made on that count in this judgment is in the nature of a prima facie one; not binding on the statutory authorities who are to first consider that aspect. Going by the binding precedents with respect to full and true disclosure of material facts, this Court is of the opinion that no proceedings could be initiated under Section 147 of the IT Act. The impugned orders in the respective writ petitions would stand set aside, for the proceedings are hit by limitation; - having been initiated beyond four years - as provided under Section 153 of the Act. There is no warrant to extend the period by two years, again as provided under Section 153, since on facts it cannot be said that the grant of exemption, at least from the assessment year 2003-04, was in the absence of full and true disclosure by the assessee. - Decided in favour of assessee.
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