9911796707
TMI Blog2012 (7) TMI 556X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act, 1961, if there has been true disclosure of all material facts, can notice under Section 148 of the Income Tax Act for reassessment be issued after an expiry of period of four years taking benefit of provisions of Section 149 of the Income Tax Act? 2. The undisputed fact is that the assessee had two Units within the State of Himachal Pradesh. As per the Industrial Policy and the incentives given, profits in these newly established industrial establishment were entitled for exemption of tax under Sections 80-HH and 80-I of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). 3. Before this Court, it has not been disputed that for the purposes of computing profit which was to be exempted under these prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relevant assessment year, no action shall be taken under this section 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 reason of the failure on the part of the assessee to make a return under or in response to a notice issued under sub-section (1) of or to disclose fully and truly all material facts necessary for his assessment, for that assessment year Explanation 1.- Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e (b); (b) if four years, but not more than six years, have escaped from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. Explanation.- In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of Section 147 shall apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the persons on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, especially the proviso thereto, it clearly postulates that where assessment has been made under sub-section (3) of Section 143 of the Act no action can be taken after the expiry of four years from the end of the relevant assessment year unless the income chargeable to tax has escaped assessment by reason of or failure on the part of the assessee to either make a return under or in response to a notice or to disclose fully and truly all material facts necessary for the assessment. We are only concerned with the second part of the proviso which deals with disclosing fully and truly all material facts necessary for the assessment. The duty of the assessee is to disclose the facts. It is not his duty to disclose what is the inference to be d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation would be seven years even in the case where the income escaping assessment was more than Rs.50,000/-. 10. We are of the considered view that Section 149 of the Act governs that field which is not covered by the proviso to Section 147 of the Act. The proviso to Section 147 of the Act is a specific provision laying down a special limitation in cases of assessment made on scrutiny where there has been full and complete disclosure of material facts. In such cases, the limitation is four years. Section 149 of the Act also lays down a limitation of four years even in cases where the income has escaped assessment due to non-disclosure of material facts. However, in case the income escaping assessment is more than Rs.1,00,000/- (Rs.50,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f there is no case of failure on the part of the assessee to disclose fully and truly all material facts which are necessary for assessment for the year of assessment etc. (ii) If the case falls under the exception mentioned in the proviso to s. 147, namely there is failure on the part of the assessee to disclose fully and truly all material facts which are necessary for assessment for the year of assessment etc., then action can be taken beyond four years subject to the issue of notice under s. 148 of the Act within the limitation provided under s. 149 of the Act. (iii) Where case falls under the exception to proviso to s. 147 and escaped income exceed rupees one lac. the notice under s. 148 can be issued beyond the period of 4 years but ..... X X X X Extracts X X X X X X X X Extracts X X X X
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