TMI Blog2011 (3) TMI 1390X X X X Extracts X X X X X X X X Extracts X X X X ..... Decided in favor of assessee. - Special Civil Application No. 3355 of 2001 - - - Dated:- 18-3-2011 - Harsha Devani, H.B. Antani, JJ. S.N. Soparkar for the Petitioner Manish R. Bhatt, B.B. Naik for the Respondent JUDGMENT Harsha Devani, J By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 30.3.2001 issued by the respondent under section 148 of the Income Tax Act, 1961 (the Act) reopening the assessment of the petitioner for the assessment year 1995-96. The petitioner, a limited company, filed its return of income for assessment year 1995-96 on 29.11.1995 declaring total income of Rs.3,84,97,110/-. Subsequently, assessment came to be framed under section 143(3) of the Act at an income of Rs.16,21,60,213/- on 30.3.1998. The petitioner carried the matter in appeal before the Commissioner of Income Tax (Appeals), Surat who vide order dated 28.10.1999 partly allowed the appeal. The order of the Commissioner (Appeals) was carried further in appeal before the Income Tax Appellate Tribunal (the Tribunal) both by the petitioner as well as the Income Tax Department which were pending at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osed fully and truly the exact nature and details of such above referred income, which is the material facts for completion of assessment. Thus, the deduction u/s 80IA have been allowed in excess to the extent of above and accordingly, income has escaped assessment within the meaning of provisions of section 147 of the Act in the assessment order u/s 143(3) dated 30.3.98 due to failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. Accordingly, notice u/s 148 r.w.s. 147 is issued in this case, which is to be issued after obtaining satisfaction of CIT." The petitioner has, thereafter, filed a rejoinder affidavit wherein it has been stated that the petitioner has not claimed any deduction under section 80I and 80IA of the Act on other income. It is further averred that along with the return, the petitioner had filed a copy of the statement showing calculation of deduction under sections 80I and 80IA of the Act. The total eligible profit shown therein, exactly tallies with the total eligible profit shown in Annexure-F as annexed to the rejoinder affidavit. It is further averred that there was a true and full disclos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rn under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148; or (ii) disclose fully and truly all material facts necessary for his assessment for that assessment year. It is submitted that in the present case admittedly the first situation does not exist. It is further submitted that in the facts and circumstances of the present case it cannot be alleged that there was any failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment for the assessment year. Inviting attention to the reasons recorded it is submitted that the assessment is sought to be reopened on the ground that deduction under section 80I/80IA of the Act has been allowed in excess of what was admissible to the petitioner, which has resulted into escapement of income. It is pointed out that according to the Assessing Officer, the petitioner had availed of deduction under section 80IA of the Act in respect of the income from other sources of Rs.1,90,02,558/-. Inviting attention to the statement showing allocation of income and expenses to eligible units and non-eligible units for deduction under section 80I and 80IA of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been issued on 30.03.2001 in relation to the assessment year 1995-96. Hence, the reopening of assessment is clearly beyond a period of four years from the end of the relevant assessment year and therefore, the proviso to section 147 of the Act would clearly be attracted in the facts of the present case. Thus, for the purpose of assuming valid jurisdiction under section 147 of the Act, the Assessing Officer would be required to establish, firstly that income chargeable to tax has escaped assessment and secondly that such escapement is by reason of failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment. A perusal of the reasons recorded shows that according to the Assessing Officer the petitioner was not entitled to deduction under section 80IA on income which was not derived from industrial undertaking. The Assessing Officer has referred to various incomes viz. rent, export incentive, advance licence benefit, miscellaneous receipts, technical know-how fees, insurance claim, refund of sales tax, refund of electricity duty etc., which in view of the ratio of the decisions of the Supreme Court in the case of CIT v. St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f total income computed under the provisions of the Act. The Tribunal in principle accepted the claim of the petitioner under sections 80I and 80IA of the Act as per the working made by the Chartered Accountants of the petitioner subject to verification of the figures by the Assessing Officer. The Tribunal has also clarified that in no case the deduction already allowed to the petitioner under sections 80I and 80IA of the Act by the Assessing Officer shall be reduced. In the light of the aforesaid discussion it is apparent that the assessment order in respect of the items for which assessment is sought to be reopened has merged with the order of Tribunal and as such has no independent existence and therefore the assessment could not be reopened in respect of the said items. Last but not least, it is an admitted position that the impugned notice has been issued after the expiry of a period of four years from the end of the relevant assessment year. A perusal of the reasons recorded shows that all that has been stated therein, is that income has escaped assessment due to failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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