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2013 (4) TMI 605 - ITAT COCHINReopening of assessment – after duration of 4 years - negligence - as the taxpayer has not furnished the details on expenditure incurred on DEPB licence – Disallowance of deduction u/s 80HHC. Held that - The question arises for consideration is whether there was negligence on the part of the taxpayer in furnishing fully and truly all the material facts necessary assessment. No one could anticipate an amendment which would be brought into the statute book after lapse of 5-6 years retrospectively. Therefore, the taxpayer cannot be blamed for not anticipating a law. It is not in dispute that the taxpayer was claiming deduction on DEPB licence. Moreover, the deduction was not denied because the details of cost was not furnished but because the taxpayer has not complied with Proviso to section 80HHC which was brought into the statute book by Taxation Laws (Amendment) Act, 2005. Therefore, it may not be correct to contend that the taxpayer has not disclosed the expenditure on sale of DEPB licence. The disallowance was made only on the basis of Taxation Laws (Amendment) Act, 2005. Therefore, the taxpayer cannot be blamed after expiry of four years from the end of the relevant assessment year. Thus, the reopening is invalid. Rectification made by the A.O. on the basis of the Proviso to section 80HHC which was inserted by Taxation Laws (Amendment) Act, 2005. – Held that - The A.O. made an attempt to rectify the original assessment order dated 05-02-2001 on the basis of the retrospective amendment brought in section 80HHC of the Act. On the date of filing of the return, the taxpayer has made the claim on the basis of the law as it stood on the first day of April of the assessment year. Therefore, the amendment made in section 80HHC by Taxation Laws (Amendment) Act, 2005 cannot be a ground to extend the period of limitation for rectifying the original order.
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