TMI Blog2000 (1) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 143(3) on March 27, 1974. Thereafter, a notice under section 148 read with section 147(b) had been issued for reopening of the assessment on the ground that the income had escaped assessment and the Income-tax Officer had information in this regard as provided under section 147(b). While issuing the notice under section 148/147(b) dated February 20, 1976, the Income-tax Officer had reasonable belief that in the original assessment, relief under sections 80-I and 80J had wrongly been allowed and the penalty which was imposed on account of shortfall in the production of controlled cloth that had been allowed under section 37 of the Act was wrong, in view of the circular of January 8, 1976. Learned counsel for the appellants, Mr. R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the controlled cloth is concerned, the Income-tax Officer had relied on the circular dated January 8, 1976, issued by the Central Board of Direct Taxes, while the assessment was completed on March 27, 1974. Therefore, the circular cannot be an information within the meaning of section 147(b) of the Act. Before we proceed we would like to refer to the decision of the apex court in this regard. In the case of Indian and Eastern Society [1979] 119 ITR 996 (SC), at page 1003, their Lordships observed as under: "Whether it is the internal audit party of the Income-tax Department or an audit party of the Comptroller and Auditor-General, they perform essentially administrative or executive functions and cannot be attributed the powers of judi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Officer had no jurisdiction and cannot issue any notice for reopening of the assessment and if a notice is issued that would be without jurisdiction and in case notice is issued without jurisdiction this court can invoke the writ jurisdiction under the Constitution. Now, we proceed with the gist of the remarks of the Assessing Officer which reads as under: "Grant of relief under section 80-I in respect of profits referable to caustic soda, refined sodium bi-carbonate and ammonium bi-carbonate which are stated to be non-priority products. Inclusion of machinery under installation for computing capital employed for the purposes of relief under section 80J. Consequent to allowance of greater relief under section 80J by reason of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 431 (SC). He submits that the apex court in Ashok Leyland Ltd.'s case [1997] 224 ITR 122, while considering the issue that when Ashok Leyland Limited was manufacturing trucks which were specified in the Sixth Schedule of the Act can it claim to be a priority industry in respect of import of spare parts. Their Lordships answered in favour of the assessee. Similarly, in the case of Vellore Electric Corporation Ltd. v. CIT [1997] 227 ITR 557 (SC), the assessee was a priority industry as it was specified for its business of generation and distribution of electricity. But during the accounting year there was also interest on investment of amounts in contingencies, again the Supreme Court held that the company was a priority industry. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bom) and other cases referred to above represents the correct law on the subject. We are of the opinion that the moment an asset is acquired or purchased for the purpose of the business, it is capital employed, though the asset as such is not actually utilised or used during the accounting year. In the chain of events, the earliest act or event is the purchase or acquisition of the asset. That by itself entitles the assessee to get the relief. The 'employment' of the capital is done or over. The subsequent or later events, including the actual user of the asset, have nothing to do in the matter. In this view, the judgment under appeal merits no interference. The appeal is accordingly dismissed with costs." When considering the provision o ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
