TMI Blog2012 (6) TMI 385X X X X Extracts X X X X X X X X Extracts X X X X ..... d:- 9-4-2012 - Chitra Venkataraman And Ravichandra Baabu, JJ. For Appellant: Mr T Ravikumar For Respondent: Mr C V Rajan JUDGEMENT Per: Chitra Venkataraman, J: Tax Case (Appeal) is filed at the instance of the Revenue against the order of the Tribunal. The above Tax Case (Appeal) is in respect of assessment year 1993-94 and the same is admitted on the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in setting aside the order of the lower authority and delete the entire addition of Rs.2,29,420/- on the ground the reopening under Section 147 of the Income Tax Act is not valid on the basis of the factual error pointed out by the audit party?" 2. The assessee is a private limited company. The assessee received a sum of Rs.2,29,420/- being an award money for its film "Silent Valley" "An Indian Rain Forest" and claimed exemption under Section 10(17a) of the Income Tax Act. The original assessment was completed under Section 143(3) of the Income Tax Act on 7.9.1995 and the loss was determined at Rs.38,960/-. Admittedly, the receipt of the award money was disclosed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had not disclosed fully and truly all material facts necessary for assessment. 6. As far as "Notes on Accounts" was concerned, the Tribunal found that the assessee had truly disclosed all material facts in the annexure to the balance sheet which was filed along with the return of income. In the note, the assessee had stated that an amount of Rs.2,29,420/- was received as award and the said award was given by Earth Vision 1992, Tokyo Global Environmental Film Festival and not from the Government of India. Thus, the Tribunal held that the reopening of the assessment was bad in law. The Tribunal, however, pointed out that the audit party had interpreted the provisions of the Income Tax Act and thereafter brought to the notice of the Assessing Officer with regard to the applicability of the Income Tax Act in respect of the award received by the assessee. Thus, the Tribunal set aside the order of the lower Authority and allowed the appeal filed by the assessee. 7. As far as the observation of the Tribunal on the audit party's alleged interpretation on law is concerned, we do not find any basis or ground for such a view, since nowhere in the order of the Commissioner of Income Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... award money was received from Earth Vision, 1992, Tokyo Global Entertainment Film Festival and it is not correct to say that the assessee ever gave an impression, as though the award was granted by the Government of India, to claim exemption. In the above circumstances, no infirmity is found in the order of the Tribunal. 11. Heard learned standing counsel appearing for the Revenue and learned counsel appearing for the assessee and perused the material placed on record. 12. As far as Section 147 of the Act relating to reassessment proceedings are concerned, the assumption of jurisdiction under Section 147 postulates the existence of tangible materials for the assessing authority to come to a conclusion that there is an escapement of income from assessment and that the reasons so assigned has a live link with the formation of the belief vide [2010] 320 ITR 561 - CIT v. KELVINATOR OF INDIA LIMITED . Admittedly, the proceedings taken herein are beyond the period. If any action to be taken beyond the four years' time limit, as per the proviso, the Assessing Authority has to satisfy that the income chargeable to tax has escaped assessment by reason of the failure on the part of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts necessary for assessment. It is no doubt true that mere production of account books or other evidence would not be sufficient enough to hold that the assessee had fully and truly disclosed all material facts. Yet, as rightly pointed out by the learned counsel for the assessee, a reading of the order of the reassessment shows that nowhere the Officer had stated as a finding of fact that the assessee had failed to disclose fully and truly all material facts necessary for making the assessment of an escaped income. The first Appellate Authority too has not bestowed his attention to this aspect. However, when the Tribunal considered this aspect, it pointed out that the assesee had clearly and categorically stated that award was given by Earth Vision, 1992, Tokyo Global Entertainment Film Festival. In the circumstances, the Tribunal reversed the finding of fact that there were no reasons given to show that the assessee had not disclosed truly and fully all the facts. The Tribunal also pointed out to the production of 'Notes of accounts' to hold that the assessee had fully and truly disclosed all material facts in the annexure to the balance sheet filed along with return. Thus, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lure on the part of the assessee, would be indicative of a failure on the part of the Assessing Officer to apply his mind to material facts, and on that ground alone the notice issued would be vitiated. 15. Applying the decision reported in [2006] 286 ITR 674 - CIT v. ELGI FINANCE LIMITED as well as the decision reported in [2008] 306 ITR 136 - CIT v. T.N.TRANSPORT DEVELOPMENT FINANCE CORPORATION LTD ., to the facts herein, on a reading of the order of the Assessing Authority as well as that of the Commissioner of Income Tax (Appeals), we have no hesitation in holding that there is absolutely no material to indicate that basic facts necessary for assumption of jurisdiction under Section 147 of the Act is absent in this case. Consequently, applying the decisions referred to above to the facts herein, we have no hesitation in upholding the order of the Tribunal. 16. As far as the decision relied on by the learned counsel appearing for the Revenue is concerned viz., [2001] 252 ITR 673 - DR.AMIN'S PATH LABORATORY v. P.N. PRASAD, the said decision is no different from what had been considered by this Court in the decisions relied on by the assessee. In the decision reported ..... X X X X Extracts X X X X X X X X Extracts X X X X
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