TMI Blog2010 (9) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... as export incentive. Therefore the second respondent has reason to believe that the income chargeable to tax has escaped assessment in view of the failure on the part of the assessee-company to disclose true and full material facts as required by the proviso to section 147 – Reassessment proceedings cannot be quashed – Writ petition not maintainable - W.P. Nos. 28457 of 2008 and 19260 of 2009 - - - Dated:- 17-9-2010 - PAUL VASANTHAKUMAR N. J JUDGMENT r Both the writ petitions are filed by the same petitioner, namely M/s. Tamil Nadu Petroproducts Limited, Chennai. The issue involved in both the cases being one and the same, both the writ petitions are disposed of by this common order. 2. In W. P. No. 28457 of 2008 the petitioner has challenged the notice datedAugust 3, 2007, calling for returns for reassessment of income for the assessment year 2001-02 in so far as escaped assessment under section 147 of the Income-tax Act, 1961. 3. In W. P. No. 19260 of 2009 the petitioner has challenged the order datedNovember 19, 2008overruling the objection filed by the petitioner for the notice datedAugust 3, 2007. 4. The brief facts necessary for the disposal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all materials were disclosed in the returns already filed. The said objection was overruled by the second respondent by order datedNovember 19, 2008by stating that notice under section 148 of the Act for the accounting year 2001-02 was issued by the Assessing Officer after getting prior approval of the appropriate authority of the department as per the provisions of section 148. In the order datedNovember 19, 2008it is stated that the petitioner has misrepresented the facts and therefore reassessment notice was issued as deductions under section 80HHC has been claimed by the assessee in excess by wrongly including the interest receipt as the business receipt. The benefit of deduction under section 80HHC has been wrongly claimed on interest receipts as export incentives. The receipt of compensation from M/s. CIBA India Pvt Ltd., for the cessation of supply agreement for the supply of epichlorohydrin to Petro Araldite Pvt Ltd., has been wrongly shown as capital receipt without any basis.(g) Since the relevant material evidence was found after verification of the records of M/s. CIBA India Pvt Ltd., particularly the receipt of compensation was for the cessation of supply agreement for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 961 if it is aggrieved, if a final order is passed after production of records by the petitioner for the reassessment proceeding. 6. Heard the learned senior counsel for the petitioner and the learned standing counsel for the Income-tax Department. Several decisions were cited by both the counsel in support of their respective submissions. I have considered the rival submissions. 7. The reassessment notice under section 148 was issued onAugust 3, 2007, on finding out escaped assessment. For the said notice, the petitioner was informed of reasons by stating that verification of records of M/s. CIBA India Pvt. Ltd., for the assessment year 2001-02 revealed that they have paid compensation of Rs. 63.02 crores to the petitioner for the termination of supply agreement. The said amount has been paid as compensation to the petitioner for terminating the supply agreement datedJanuary 22, 1998and for entering into supply agreement datedMarch 22, 2001. Though the petitioner company claimed the entire amount of Rs. 63.02 crores as capital receipt, the facts gathered show that at least a part of it should be on revenue account. Therefore the entire sum could not have been paid to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (here-after in this section and in sections 148 to 153 referred to as the relevant assessment year) :' (emphasis supplied) 4. After the Amending Act, 1989, section 147 reads as under: ₹ 147. Income escaping assessment.-If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the relevant portion of Circular No. 549 datedOctober 31, 1989, which reads as follows ([1980] 182 ITR (St.) 1, 29) : ₹ 7.2. Amendment made by the Amending Act, 1989, to reintroduce the expression "reason to believe" in section 147.-A number of representations were received against the omission of the words "reason to believe" from section 147 and their substitution by the "opinion" of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression "has reason to believe" in the place of the words `for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however, remain the same.' (Emphasis supplied)" 11. Applying the said decision to the facts of this case, the proceedings initiated for reassessment cannot be quashed at the threshold. It is open to the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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