TMI Blog2009 (1) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... essment was not valid as neither there was any new information nor notice was issued within the statutory time-limit and as such reassessment proceedings were without jurisdiction especially when the assessment was reopened in consequence of pronouncement of the apex Court in the case of CIT vs. Sterling Foods (1999) 153 CTR (SC) 439 : (1999) 237 ITR 579 (SC) as is apparent from the reasons recorded by the AO while excessive deduction has been allowed to the assessee under ss. 80HH and 80-I of the Act, 1961, in terms of the said decision. (ii) the AO incorrectly reduced eligible profit of new unit from export incentive of old unit for the purpose of deduction under ss. 80HH and 80-I of the IT Act, 1961 and thereby deleting the disallowance on account of such deduction." 4. Briefly, the facts of the case are that the assessee has contended before the learned CIT(A) that the reopening of the original assessment under s. 147 of the Act was illegal and unjustified. Perusal of the assessment order shows that in the case assessment was originally made under s. 143(3) on 25th March, 1994 on total income of nil. It was later noticed by the AO that the assessee had earned a sum of Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued notice under s. 148 on 25th May, 2001 while the assessment was made on 27th Feb., 2003. It is emphasized that the AO did not have any new information in hand for taking action under s. 148 as the matter was already dealt within details in the original assessment proceedings. Therefore, the assessee had made full and true disclosure of the facts necessary for the assessment. The Authorised Representative further claimed that the notice issued under s. 147 was barred by time limitation as in view of the first proviso to s. 147, the notice under s. 148 can be issued beyond four years from the end of the relevant assessment year in those cases only where the income has escaped assessment on account of the failure of the assessee to disclose full and true disclosure of all material facts necessary for the assessment. It is claimed that in the present case, there was full and true disclosure of all material facts at the time of original assessment, hence the AO could have issued the notice under s. 148 on or before 31st March, 1996 and not beyond that date while the notice in this case was issued on 25th May, 2001 which is accordingly beyond the time limitation prescribed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eassessment proceedings is held to be bad in law, illegal and without any jurisdiction. The appeal on the matter is accordingly, allowed." 8. Feeling aggrieved by the order of the learned CIT(A), the Revenue is now in appeal before the Tribunal. 9. The learned Departmental Representative while assailing the order of the learned CIT(A) referred to the original assessment order and computation of income and submitted that the assessee raised false and excessive claim under s. 80HH/80-I of the Act. Accordingly, the AO was competent to issue notice under s. 148 of the Act. He submitted that the issue of export incentive was not examined by the AO in the original assessment order which has no nexus with the industrial undertaking of the assessee. Therefore, there is no change of opinion as is held by the learned CIT(A). He has referred to Expln. 2 to s. 147(c)(iii) of the Act and submitted that the assessee claimed excessive relief under ss. 80HH and 80-I of the Act and the assessee has not disclosed primary facts before the AO and has not excluded export incentive out of the claim under ss. 80HH and 80-I. Therefore, the assessee is not entitled to the deduction under the same provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny loan to any person during period covering date of cash loan. Subsequent information definite, specific and reliable. (viii) Decision of the Hon'ble High Court of Delhi in the case of Consolidated Photo Finvest Ltd. vs. Asstt. CIT (2006) 200 CTR (Del) 433 : (2006) 151 Taxman 41 (Del) in which action under s. 147 was held to be permissible even if AO gathered his reasons to believe from the very same record as had been subject-matter of completed reassessment proceedings. (ix) Decision of the Hon'ble High Court of Bombay in the case of Girilal Co. vs. S.L. Meena, ITO (2008) 214 CTR (Bom) 186 : (2008) 1 DTR (Bom) 180 : (2008) 300 ITR 432 (Bom) in which the assessee claimed deduction under s. 80-IB but no specification was given in the return with regard to size of the land, which was a condition precedent for claiming special deduction. Reassessment after four years was held to be valid. 10. On the other hand, the learned counsel for the assessee reiterated the submissions made before the authorities below and submitted that the proceedings under s. 148 have been initiated after four years from the end of the relevant assessment year. The assessee declared all the facts i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee further submitted that since the reassessment is based on the subsequent decision of the Hon'ble Supreme Court, there is no failure on the part of the assessee and relied upon the decision of the Hon'ble High Court of Madras in the cases of CIT vs. A.V. Thomas Exports Ltd. (2007) 212 CTR (Mad) 164 : (2008) 296 ITR 603 (Mad) and CIT vs. Mepco Industries Ltd. (2007) 207 CTR (Mad) 642 : (2007) 294 ITR 121 (Mad). He has also relied upon the decision of the Hon'ble High Court of Bombay in the case of Sesa Goa Ltd. vs. Jt. CIT (2007) 213 CTR (Bom) 579 : (2007) 294 ITR 101 (Bom) in which it was held-reassessment in the light of subsequent judicial decision in a case of non-disclosure fully and truly of all material facts but change of opinion on subsequent decision-notice invalid. The learned counsel for the assessee further submitted that subsequent decision of the Hon'ble Supreme Court cannot be the basis for reassessment and relied upon the decision of the Hon'ble High Court of Madras in the case of CIT vs. Ramachandra Hatcheries (2008) 215 CTR (Mad) 370 : (2008) 3 DTR (Mad) 68 : (2008) 305 ITR 117 (Mad) and the decision of the Hon'ble Supreme Court in the case of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee to file any return and that the assessee has disclosed fully and truly all material facts necessary for assessment with regard to deduction claimed under ss. 80HH and 80-I of the Act. The excessive relief claimed by the assessee under s. 80HH and 80-I of the Act was also considered by the AO and with minor variation deduction under ss. 80HH and 80-I of the Act has been computed as per the original assessment order dt. 25th March, 1994. We find from the reasons for reopening of the assessment recorded by the AO that the AO proposed to reopen the assessment on the basis of subsequent decision of the Hon'ble Supreme Court in the case of CIT vs. Sterling Foods in which it was held that the profits from sale of import entitlement are not profits derived from industrial undertaking. Therefore, the same are not includible in the income for computing special deduction. The aforesaid decision of the Hon'ble Supreme Court was pronounced on 15th April, 1999. The AO also in the reassessment order at pp. 1 and 2 had mentioned the aforesaid facts and noted that in the original assessment order the excessive deduction has been allowed to the assessee against the decision of the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1997) 138 CTR (SC) 260 : (1997) 224 ITR 560 (SC) held that the assessee shall have to disclose only the primary facts. 13. Considering the above legal propositions decided in the above cases and the decisions cited by the learned counsel for the assessee above, it is clear that the AO was not justified in reopening the assessment on mere change of opinion on the basis of subsequent decision of the Hon'ble Supreme Court. The learned Departmental Representative did not bring any case law on record to say that the finding of the AO at the time of passing the original assessment order was against the decision of the jurisdictional High Court or the decision of the Hon'ble Supreme Court. Even the AO has not made out any case that the original assessment framed by the AO was framed against the decision of the High Court. 14. Proviso to s. 147 of the IT Act, 1961 provides: "Provided that where an assessment under sub-s. (3) of s. 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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