TMI Blog2010 (5) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner had filed a return under section 139 of the Income-tax Act, 1961, on October 31, 2002, declaring an income of Rs. 15,25,960. 3. The Assistant Commissioner of Income-tax passed an assessment order dated March 31, 2005, under section 143(3). The assessment order records that the petitioner consists of two divisions, one of which is M/s. Ferromet Concentrates which derives an income totally from export and is, therefore, eligible for exemption under section 10B from the assessment year 1999-2000. The assessment order further records that the exemption under section 10B was not claimed as the petitioner had not derived any taxable income during the period 1999-2000 to 2001-02. However, during the assessment year under consideration, the petitioner had made a profit. 4. Subsequently, after issuing a notice dated May 12, 2006, an order under section 154 dated May 25, 2006, was passed rectifying the assessment order by disallowing the deduction under section 80HHC. We, however, are not concerned with the same. 5. The present petition requires a consideration of the subsequent orders. A notice dated April 1, 2008, was issued by the respondent to the petitioner und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n had also been granted for the said period. Section 10B was thereafter amended. The petitioner once again claimed exemption under section 10B contending that the same was not in respect of the same unit but in respect of a new unit. Mr. Dastoor submitted that all the information and material in connection with the submission had been supplied and was available to the Department before the assessment was made. He submitted that the Department was, therefore, conscious of the material necessary to adjudicate as to whether the unit in respect of which exemption was now claimed for the said assessment order was a new unit or not. The petitioner claimed that it was a new unit. It is, however, contended on behalf of the Department that it is not as the petitioner had only expanded the existing unit in respect of which the benefit under section 10B had already been claimed, granted and availed of. 11. Mr. Dastoor placed the strong reliance essentially upon the judgment of a Division Bench of this court in Hindustan Lever Ltd. v. R. B. Wadkar, Asst. CIT (No. 1) [2004] 268 ITR 332 (Bom) ; [2004] 8 LJSOFT 129, and in particular upon the following observations (page 336) : "Having he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 143 has been made for relevant assessment year, no action can be taken under section 147 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 assessment year by reasons of the failure on the part of the assessee to disclose all material facts necessary for his assessment for that assessment year. In the case in hand it is not in dispute that the assessment year involved is 1996-97. The last date of the said assessment year was March 31, 1997, and from that date if four years are counted, the period of four years expired on March 31, 2001. The notice issued is dated November 5, 2002, and received by the assessee on November 7, 2002. Under these circumstances, the notice is clearly beyond the period of four years. The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion is whether the jurisdiction was wrongly assumed or not. 13. Mr. Dastoor submitted that none of the conditions justifying reassessment proceedings as specified are present in the present case. He submitted that there is no allegation recorded in the reasons to the effect that there has been a failure on the part of the assessee to disclose fully and truly all material facts. Nor do the reason specify the failure. In other words, the reasons do not furnish any details of the facts which are not recorded. It was submitted that there is nothing in the orders/reasons which indicate that there was escapement of income on account of the failure on the part of the petitioner to disclose fully and truly all material facts. It was also submitted that the validity of the order has to be judged only on the basis of the reasons recorded and that the same cannot be supplemented subsequently. 14. The writ petition is indeed maintainable. However, in our opinion, in the facts of this case, the questions raised herein will be more conveniently decided not at this stage in this petition but by requiring the petitioner to raise the same in appeal provided under the Income-tax Act. It is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The enclosure, thereafter, refers to the formation of the alleged new unit in respect of which the deduction under section 10B was claimed for the said assessment year in question. In other words, according to the petitioner, these are two separate export-oriented undertakings and, therefore, the benefit under section 10B could have been claimed. However, neither annexure A, nor enclosure I disclosed the fact that admittedly the exemption claimed by the ferromet concentrates division under section 10B had been granted and availed of by the petitioner. It is a moot point as to whether in view of the failure to mention the same, the disclosure can be said to be a true disclosure even assuming that all the facts pertaining to the setting up of the alleged new unit were disclosed. 17. In the case of Kantamani Venkata Narayana and Sons v. First Addl. ITO [1967] 63 ITR 638 (SC) ; AIR 1967 SC 587 ; [1967] 1 SCR 984, the Supreme Court held as under (page 643 of 63 ITR) : "The Income-tax Officer had, therefore, prima facie, reason to believe that information material to the assessment had been withheld, and that on account of withholding of that information income liable to tax had ..... X X X X Extracts X X X X X X X X Extracts X X X X
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