TMI Blog2003 (2) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 148 of the Income-tax Act issued for the assessment year 1994-95, beyond the period of four years from the end of the assessment year 1994-95, is without jurisdiction and hence is liable to be quashed and set aside. The facts having bearing on the subject matter of the present petition are as follows: The petitioner is a private limited company and is engaged in the business of providing consultancy services in the field of petroleum products to a Russian Government owned company. The petitioner is assessed as a company under the Income-tax Act. In the assessment year 1994-95, the assessee had claimed deduction under section 80-O of the Income-tax Act at Rs. 1,06,00,610 calculated at the rate of 50 per cent. of the foreign exchange of Rs. 2,12,01,220 received by the assessee as consultancy charges during the assessment year 1994-95. The assessment order was passed on March 27, 1997, declining to allow the deduction under section 80-O of the Income-tax Act on the ground that the remittances were not received within six months from the end of the previous year in which the services were rendered. On appeal filed by the assessee, the Commissioner of Income-tax (App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d of four years from the end of the assessment year 1994-95 was barred by limitation. Even though the petitioner sought reasons for reopening the assessment, the respondents failed to furnish the reasons for reopening of the assessment. Under the circumstances, on June 29, 2001, the petitioner filed the return under protest. The petitioner also took up the matter with the Central Board of Direct Taxes (the "CBDT" for short). However, as no relief could be obtained from the Central Board of Direct Taxes and notice under section 143(2) of the Income-tax Act was issued by the Assessing Officer on June 18, 2001, calling upon the petitioner to attend the hearing pursuant to the notice issued under section 148, the petitioner has approached this court by filing the present writ petition. In the affidavit in reply, the respondents have disclosed the reasons for reopening the assessment. From the recorded reasons it is seen that the reopening of the assessment is solely on the ground that for the services rendered in the financial year 1990-91 deduction under section 80-O will not be available in the assessment year 1994-95 even though the amount was received in the assessment year 1994- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(2) of the Income-tax Act was issued on June 18, 2002, and the petition has been filed belatedly on August 20, 2002, and in fact moved this court for interim orders only in February, 2003. Under these circumstances, according to Mr. Desai, in view of the inordinate delay on the part of the petitioners in moving this court for relief, the petition is liable to be dismissed on the ground of delay and laches. So far as the merits of the case are concerned, Mr. Desai submitted that the reasons recorded by the Assessing Officer for reopening the assessment on account of deduction under section 80-O are totally different from the reasons for disallowing the claim under section 80-O at the time of the original assessment. According to Mr. Desai, the claim under section 80-O was originally disallowed on the ground that the amount of consultancy charges was not received within six months from the end of the previous year in which the services were rendered whereas the reasons recorded for reopening the assessment was that the services were not rendered in the assessment year 1994-95 and hence the amount received in the assessment year 1994-95 for services rendered in earlier years cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment disallowed deduction under section 80-O only on the ground that the amount received in the assessment year 1994-95 was for the services rendered in the financial year 1990-91. However, the Commissioner of Income-tax (Appeals), in the facts of this case came to the conclusion that the amount for services rendered became payable only when the credit note was issued by the Russian agencies in Moscow. The Commissioner of Income-tax (Appeals) had directed the Assessing Officer to allow deduction under section 80-O only if the amount was brought to India within six months from the issuance of the credit note by the Russian Government. Accordingly, the Assessing Officer on verification had allowed the claim of the assessee. The Assessing Officer also noted that even in the assessment year 1989-90 the deduction under section 80-O was allowed on receipt basis irrespective of the year in which the service was rendered by the assessee. Under these circumstances, when the deduction under section 80-O was allowed in the assessment year 1994-95 knowing fully well that the amount received was for the services rendered in the financial year 1990-91, the reopening of the assessment to de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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