TMI Blog2014 (7) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... on DIL Ltd. v/s. Assistant Commissioner of Income Tax and Others [2012 (2) TMI 85 - BOMBAY HIGH COURT] - In view of the retrospective amendment of law by Parliament, the AO may have reason to believe that income has escaped assessment - But that in itself is not sufficient for reopening an assessment beyond the period of four years - Beyond the period of four years when an assessment is sought to be reopened, there must be a failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment - re-opening of an assessment beyond a period of four years from the end of the Assessment Year in the absence of any failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment would not give jurisdiction to issue notice under Section 148 of the Act – Decided in favour of Assessee. - Writ Petition No. 801 of 2005 - - - Dated:- 17-6-2014 - M. S. Sanklecha And G. S. Kulkarni,JJ. For the Petitioner : Mr. Jitendra Jain With Mr. Murlidharan For the Respondent : Mr. Suresh Kumar JUDGMENT (Per M. S. Sanklecha,J.) The Petition under Article 226 of the Constitution of India, assails t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Dye and Intermediates Ltd, the deduction u/s. 80-HHC will not available on balance incentives if there is no net profit from trading and manufacturing export. After adjusting the loss of ₹ 7,00,54,773/from manufacturing export against trading profit of ₹ 5,29,09,932/-, there is net loss of ₹ 1,71,44,841/-. Since the assessee do not have profit from exports, the deduction on incentives is not available in view of decision of Rohan Dye Intermediates Ltd. cited above. Therefore, I have reason to believe that income has escaped assessment. Approval has been granted by CIT-I, Mumbai vide letter dt. 6/1/2005 for reopening assessment u/s. 147. Therefore, assessment proceeding are reopened u/s. 147. Issue notice u/s. 148 of the I.T. Act. (d) The assessee filed its objections and in particular urged that the impugned notice dated 10th January 2005 is without jurisdiction. This was on the ground that the impugned notice is issued after the expiry of four years from the end of the Assessment Year 1998-99 and the reasons recorded do not indicate any failure on the part of the Petitioner to fully and truly disclose all material facts necessary for assessment. Besides, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-open the assessment passed under Section 143(3) of the Act in view of decision rendered subsequent to the assessment order passed by the Assessing Officer. In support, reliance is placed upon the decision of the Apex Court in the matter of A.L.A. Firm v/s. Commissioner of Income Tax 189 ITR 2085; and (ii) In any case, the reasons rejecting the objections on 28th February 2005 allege failure on the part of the Petitioner to make full and true disclose all material facts necessary for assessment. Therefore, the impugned notice is valid in law and the Petition be dismissed. 6. It is well settled that in terms of the proviso to Section 147 of the Act any assessment sought to be opened beyond a period of four years from the end of the relevant Assessment Year, the twin jurisdictional conditions have to be cumulatively satisfied :- (a) there must be a reason to believe that income chargeable to tax has escaped the assessment; and (b) such escapement of income should have arisen on account of failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment. Further as held by this Court in Hindustan Lever Ltd.(supra) the exerc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilable on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing affidavit or making an oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches the Court, on the strength of the affidavit or oral submissions advanced. The aforesaid observations of our Court must be read in the light of the reasons recorded by the Assessing Officer for re-opening in the above case at paragraph 11 which reads as under:- 11:- On being noticed, respondents appeared and filed their counter affidavit disclosing the reasons recorded prior to the issuance of the notice under Section 148. The said reasons recorded read as under:- From the notes to the audited accounts, it is seen that while valuing closing stock, central excise and customs duty leviable on stock lyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer for re-opening is the subsequent decisions of Tribunal and Courts. There is no whisper of any facts indicating that the Petitioner had not having disclosed any fact which led to a reasonable belief that income chargeable to tax has escaped assessment. Therefore, in the present facts, we are clearly of the view that the reasons as recorded for issuing the impugned notice dated 10th January 2005 do not satisfy the jurisdiction requirement in case of notice issued beyond a period of four years from the end of the relevant Assessment Year i.e. 1998-99. 10. The contention of Mr. Suresh Kumar, learned Counsel appearing for the Revenue that the order rejecting the objections dated 28th February 2005 did allege failure to disclose truly and fully all material facts and the same would be therefore satisfy the jurisdictional requirement. In view of the decision of this Court in Hindustan Lever Ltd. (supra) as found in paragraph 20 thereof quoted herein above, we are required to only examine the reasons recorded at the time of issuing the impugned notice dated 10th January 2005 under Section 148 of the Act to ascertain whether or not the Assessing Officer has jurisdiction t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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