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TMI Blog2012 (2) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... r did not specifically deal with the eligibility of the Petitioner to claim a deduction under Section 10A in the course of the assessment year. On 9 August 2010 a notice was issued to the Petitioner under Section 148. The following reasons have been disclosed for reopening the assessment for Assessment Year 2004-05: "During the course of the assessment proceedings for A. Y. 2006-07, it has been established on the basis of the details filed by the assessee that the assessee is not entitled to deduction u/s. 10A for the following reasons: 1) Units are not independent units and constitute one integrated unit. 2) No independent accounts of units are maintained. 3) There is complete overlapping of work and use of resources amongst units through leased lines. 4) The Tax Audit Report and Audit report u/s. 10A is not correct or assessee is claiming expenses/depreciation of 10A units in non 10A units. 5) Several non 10A activities are being carried on from 10A units which is evident from service tax returns. 6) The assessee has declined to file a reconciliation of Service Tax/VAT returns with IT returns. Since both these taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Supreme Court in Sri Krishna (P.) Ltd. v. ITO2 and Ess Ess Kay Eigineering Co. (P.) Ltd. v. CIT3 which were followed in a judgment of a Division Bench of this Court in Multiscreen Media (P.) Ltd. v. Union of India4. The judgment in Siemens Information System (supra) was also considered in the subsequent judgment of the Division Bench of this Court in Multiscreen Media; (ii) During the course of the assessment proceedings for Assessment Year 2004-05 a bare reading of the assessment order would reveal that the Assessing Officer did not consider the eligibility of the Petitioner to claim a deduction under Section 10A. This issue was considered in the course of the assessment proceedings for Assessment Year 2006-07. The material which has come on the record in the course of those assessment proceedings has revealed that the units of the Petitioner are not independent units; no independent accounts are maintained; there is an overlapping of work and use of resources amongst units and several non Section 10A activities are being carried on from Section 10A units. Hence, it was submitted that the reopening of the assessment is not based on a mere change of opinion and the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion Bench of this Court in Anusandhan Investments Limited v. M.R. Singh, Deputy CIT5 where the Court noted that it is a well established position in law that an assessment can be reopened on the basis of information contained in an assessment of a subsequent year. These decisions were followed by another Division Bench of this Court in Multiscreen Media (supra). In its judgment in Multiscreen Media, the Division Bench after considering the judgment of this Court in Siemens Information System1, held that, that judgment does not state as an absolute principle of law that an Assessing Officer would not be entitled to seek recourse to the power to reopen an assessment under Section 147 on the basis of an assessment made for a subsequent assessment year. As the Division Bench of this Court noted, the judgment in Siemens Information System (supra) cannot be construed to lay down a proposition of law inconsistent with the law laid down by the Supreme Court in Sri Krishna (P.) Ltd. (supra) and Ess Ess Kay Engineeing Co. (P.) Limited (supra). As this Court noted the judgment of the Division Bench in Siemens Information System properly considered involved a case where recourse to the provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in earlier years. Therefore it cannot be said that the assessee had disclosed fully and truly all material facts in those years in respect of units which started in earlier years. Therefore those units are also not eligible for 10A deduction." 6. Now it is on the basis of the material which has come on the record in the course of the assessment proceedings for Assessment Year 2006-07, based on the disclosures of the assessee and the order of assessment for that year, that the Assessing Officer has purported to reopen the assessment for Assessment Year 2004-05. Beyond a period of four years, the reopening of an assessment is conditioned by the requirement that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that Assessment Year. A full disclosure and a true disclosure are what the statute mandates. A full disclosure is a disclosure which provides a complete statement of all material facts. A true disclosure is a disclosure which does not suppress material facts from the Assessing Officer and does not contain any taint of falsehood. In the present case, during the course of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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