TMI Blog2016 (3) TMI 1054X X X X Extracts X X X X X X X X Extracts X X X X ..... en a regular order of assessment is passed in terms of section 143(3) of the Act, a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of section 114(e) of the Indian Evidence Act, 1872, judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the AO to reopen the proceeding without any thing further, the same would amount to giving a premium to an authority exercising quasi judicial function to take benefit of its own wrong. - Decided in favour of assessee - ITA No. 530, 531/Kol/2012, CO No. 44, 45/Kol/2012 - - - Dated:- 20-1-2016 - Mahavir Singh, JM And M Balaganesh, AM For the Appellant : Shri Anil Kr Pande, JCIT, Sr. DR For the Respondent : Shri Manish Tiwari, FCA ORDER Per Shri Mahavir Singh, JM Both the appeals of revenue and Cross Objections by assessee are arising out of separate orders of CIT(A)-I, Kolkata in Appeal No.376/CIT(A)-I/Circle-1/10-11 and 423/CIT(A)-I/Circle-1/09-10 both dated 16.12.2011 respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... started intimation should be given to the Govt. of India, Ministry of Industry, Department of Industrial Policy Promotion. But this letter is not an approval for being declared as 100% export oriented company as envisaged in explanation 2(iv) to sec. 10B. Again the assessee company filed copy of letter no. FEPZ/LIC/C-21/2001/573 dated 7.4.2001 issued by the Falta Export Processing Zone. From Para-3 of the said letter it is seen that it is also merely a permission to implement the project and commence commercial production. This is also not an approval for being 100% export oriented company as envisaged in explanation 2(iv) to sec. 10B. Aggrieved, assessee preferred appeal before CIT(A), who allowed the claim of the assessee in respect to exemption u/s. 10B of the Act but disallowed in respect to incentive received i.e. exclusion of receipts of External Market Assistance (EMA) by observing in para 7.2 and 7.3 as under: 7.2 I have carefully analyzed the rival submissions. The primary reasons of the AO for denying the benefit of exemption u/s. l0B to Budge Budge 100% EOU is non-submission of the letter of the approval regarding 100% export oriented unit from the Competent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncentive by way of External Market Assistance was paid by the Jute Manufactures Development Council at the specified rate of the FOB value realized because of the export by the 100% EOU of the jute goods manufactured by it. Such incentive indisputably forms part of the profits of the business of the 100% EOU under section 28 of the Act. Therefore, the External Market Assistance has to be taken into account in computing the profits of the business of the 100% EOU. The assessee claims to have done so but according to the CIT(A), the assessee has included the incentive amount in the export turnover which the assessee says it has not. In such circumstances, it is deemed fit to remand the matter back to the AO to verify the factual claim of the assessee that it has not included the incentive amount in the export turnover and has only taken the same into account in computing the profits of the business of the 100% EOU. If the assessee's said claim is factually correct, its computation should be accepted. Needless to mention, the AO should allow adequate opportunity of being heard to the assessee. We direct accordingly. 6. The AO while giving appeal effect to the order of ITAT al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover/total turnover) 15,28,03,429/- Exemption u/s. 10B @ 90% of ₹ 152803429 13,97,80,670/- P L A/c of the business eligible for exemption is as under: Income Sales Sch-11 25,88,79,464/- Related income 1,70,71,108/- 27,59,50,572/- Expenditure Raw material and finished goods Sch-12 4,40,81,967/- Manufacturing and other expenses Sch-13 8,94,62,635/- Interest Sch-14 45,373/- Depreciation 71,27,005/- 14,07,16,980/- Profit before taxation 13,52,33,592/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - was allowed by allowing an aggregated amount of ₹ 11,77,92,580/- and thereby taxable income of identical amount has escaped assessment. In view of the above, I have reason to believe mat the amount of excess exemption Rs,1,10,89,672/- claimed by the assessee and allowed in the order of assessment for which identical amount of income has escaped assessment for the assessment year 2003- 04. Therefore, to assess the said income and also any other incc.ne chargeable to tax which has escaped assessment and which comes to the notice subsequently in the assessee of the proceedings u/s. 147 of the IT Act or recomputed the depreciation or any other allowance as the case may be for the assessment year 2003-04, a proceedings u/s. 147 of the IT Act is initiated by issue of a notice u/s 148 of the IT Act. The AO framed reassessment u/s. 143(3) r.w.s. 147 of the Act vide his order dated 24.12.2010 and disallowed the claim of exemption u/s. 10B of the Act and also excluded the receipts of EMA from exemption u/s. 10B of the Act. Aggrieved, assessee preferred appeal before CIT(A), who deleted the addition and allowed exemption u/s. 10B of the Act but confirmed the exclusion of rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the assessee to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year. The CIT(A) has simply confirmed the action of AO for reopening of assessment vide para 5.3 as under: 5.3. I have gone through the submissions of the appellant and the reasons for the reopening of the assessment by the AO. There are reasons for reopening the assessment to disallow exemption claimed u/s. 10B of the Act and it squarely fits into the explanation to the section 147 of the Income Tax Act, 1961 for reopening of the assessment and thus, the action of the AO for reopening of the assessment is upheld. The appellant fails to get relief on this issue. 8. We find that the entire issue has been deliberated upon in first round by the AO, by CIT(A) and even by Tribunal on both the issues and exemption u/s. 10B of the Act and also exemption on receipts relating to EMA. Accordingly, We find that this issue is squarely covered in favour of the assessee and against revenue by the judgment of Hon'ble Supreme Court in the case of CIT Vs. Kelvinator India Ltd. (2010) 310 ITR 561 (SC), wherein newly substituted provision of section 147 of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section, or re-compute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the 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 section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. This new section has made a radical departure from the original section 147 inasmuch as clauses (a) and (b) of the original section 147 have been deleted and a new proviso added to section 147. In Rakesh Aggarwal v. Asst. CIT [1997] 225 ITR 496, the Delhi High Court held that in view of the proviso to section 147 notice fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority or court vide Rajinder Nath v. CIT [1979] 120 ITR 14 (SC) ; Gupta Traders v. CIT [1982] 135 ITR 504 (All) ; CIT v. Tarajan Tea Co. (P.) Ltd. [1999] 236 ITR 477 (SC) and CIT v. Goel Bros. [1982] 135 ITR 511 (All), etc. The case of an expatriate employee was to be decided on the basis of the provisions of article XIV of the treaty, whereas corporate income was to be decided on the basis of either article III or article XVI of the treaty or section 44BB of the Act. Hence, the observations of the Tribunal in Boudier Christian's case was not a direction necessary for the disposal of the appeal relating to the petitioner. The exigibility of income of the petitioner from manning and management contracts was never an issue directly or indirectly involved in the case of Boudier Christian. Moreover, the Tribunal in the appeal relating to the assessment of the petitioner's own case, vide Deputy CIT v. ONGC [1999] 70 ITD 468 (Delhi) has considered the decision of the Tribunal in Boudier Christian's case. It is settled law that an appeal is a continuation of the original proceedings and hence when the Tribunal in the appeal relating to the petitioner has considered the d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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