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2024 (3) TMI 38 - HC - Income TaxRe-opening of assessment u/s 147 - notice beyond period of four years - change in the opinion or a later decision on the legal aspects - reason for the re-assessment is that the assessee was not entitled to the exemption u/s 10B of the IT Act by reason of it not having an approval from the relevant authority, as provided in the explanation to the section - HELD THAT:- There is no contention that the assessee had originally withheld any information from the assessing authority. It is not contended that the assessee had suppressed any material or had not made available the approvals during the assessment or had induced the assessing authority to come to a wrong conclusion by any failure on the part of the assessee to disclose the relevant details. Apparently, what has occurred was a mistake on the part of the assessing authority in accepting the approval produced by the assessee to be an approval as required under Explanation 2 to Section 10B. It appears that later, the High Court of Delhi [2012 (9) TMI 627 - DELHI HIGH COURT] had held that the approval for the purpose of Section 10B can only be an approval granted by the Board constituted by the Central Government under the provisions of Industries (Development and Regulation) Act. This judgment of the Delhi High Court is the reason cited in respect of all the re-assessments. In WP it is additionally stated in the reasons that there was a failure on the part on the assessee to disclose fully and truly all relevant materials required for the assessment. However, neither in the notices or the assessment orders, nor in the counter affidavit is it stated that the assessee had failed to disclose any relevant information or had produced any fraudulent material during the assessment proceedings. The Apex Court in Parashuram Pottery Works Co. L.t.d v. Income Tax Officer [1976 (11) TMI 1 - SUPREME COURT] has specifically considered the issue and has held that the responsibility of the assessee is only to place the materials before the assessing officer and the assessee would not be responsible for the inferences made by the assessing authority on the basis of the materials that he has placed before the concerned authority. As further held by the Apex Court that a change in the opinion or a later decision on the legal aspects cannot be a reason for re-opening an assessment which has been concluded on the basis of the material which is made available in cases where the re-opening is attempted after 4 years, unless the assessee failed to disclose relevant information. In the cases before us the respondents have no case that the income chargeable to tax during the relevant assessment years had escaped assessment because of the failure on the part of the assessee to disclose any relevant material. It apparently is a case where the assessing authority had gone wrong in granting exemptions which were not liable to be granted in terms of the provisions of the statutes. If that be so, the 1st proviso would prevent the authorities from reopening the assessment after 4 years from the close of the assessment year, unless the income had escaped assessment on account of the failure of the assessee. Thus it is clear that in a case where there is no failure on the part of the assessee to disclose the materials and the failure was on the part of the assessing authority in drawing inferences on the basis of the materials placed the re-opening of the assessment after 4 years would be incompetent. The re-opening of the assessment in all these 3 cases are therefore found to be incompetent. Decided in favour of assessee.
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