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TMI Blog2010 (5) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 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 under section 148 stating that the respondent had reason to believe that the petitioner's income chargeable to tax for the assessment year 2002-03 has escaped the assessment within the meaning of section 147. The respondent, therefore, proposed reassessment of the income for the said assessment year and called upon the petitioner to deliver a return. The notice stated that it was being issued after obtaining necessary sanction of the Commissioner of Income-tax, Karnataka (Central), Bangalore. 6. The petitioner by a letter dated May 8, 2008, stated that the regular assessment for the said assessment year was completed on March 31, 2005, after calling for the details from time to time and after necessary scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded 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 heard the parties at length, we are of the opinion that the petition can be disposed of on the first contention raised by the petitioner, wherein the petitioner has contended that the notice issued under section 148 is without jurisdiction being hit by the proviso to section 147 of the Act as such not within the prescribed period provided under the proviso to section 147 of the Act. In the circumstances, it would be necessary to turn to section 147 of the Act, which 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 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovember 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 permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach to the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 made expressly clear that we do not express any opinion as to the validity of the impugned order. We further make it expressly clear that the contentions raised by Mr. Dastoor and all other contentions that may be open to the petitioner, may be raised in the appeal, if any, filed from the final order reassessing the petitioner's income. 15. Ms. Dessai conceded that these very questions can also be raised in the appeal provided for under the Income-tax Act. 16. For the purpose of this order, we proceed on the basis that all the facts had been furnished by the petitioner to the Department. The responsibility of the petitioner/assessee is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosure 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 escaped assessment. From the mere production of the books of account it cannot be inferred that there had been full disclosure of the material facts necessary for the purpose of assessment. The terms of the Explanation are too plain to permit an argument being reasonably advanced, that the duty of the assessee to disclose fully and truly all material facts is discharged when he produces the books of account or other evidence which has a material bearing on the assessment. It is clearly implicit in the terms of sections 23 and 34 of the Income-tax Act that the assessee is under a duty to disclose fully and truly material facts necess ..... 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