TMI Blog1998 (9) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ome chargeable to tax under the Act from growing and manufacturing of tea in India being 40 per cent. at Rs. 6,47,84,258. In computing the said taxable income from growing and manufacturing of tea in India, the deduction of Rs. 1,59,92,021 was allowed, being 40 per cent. of Rs. 3,99,80,053. After completion of the assessment, the Assessing Officer had issued notice under section 148 of the said Act, read with section 147, being annexure B to the petition, dated September 30, 1997, asking the petitioner that its income had escaped as deduction under section 32AB(5) allowed was more than the amount permissible under section 32AB of the said Act. The petitioner has challenged this notice on the ground that the notice has been issued after four years from the end of the relevant assessment year. Therefore, before issue of notice, the Income-tax Officer should satisfy whether any income has escaped and that the assessee has failed to disclose fully and truly all material facts necessary for the assessment. Counsel for the petitioner submits that all materials required for assessment of income were disclosed fully and truly by the assessee. Therefore, even if some income had escape ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,399 Merchiston 7,78,023 1,96,447 9,74,470 3,89,788 78,579 3,11,209 Dewan 5,53,78,317 1,36,88,658 6,90,66,975 2,76,26,790 54,75,463 2,21,51,327 Towkok 3,31,87,080 82,02,552 4,13,89,632 1,65,55,853 32,81,021 1,32,74,832 Meleng 1,01,15,045 24,38,245 1,25,53,290 50,21,316 9,75,298 40,46,018 Nahorhabi 58,05,562 13,70,314 71,75,875 28,70,350 5,48,125 23,22,225 Kalling 1,51,81,119 37,94,237 1,89,75,356 75,90,142 15,17,695 60,72,448 Jellapore 82,70,580 20,63,851 1,03,34,431 41,33,772 8,25,540 33,08,232 Tukvar 12,09,868 2,25,883 14,35,751 5,74,300 90,353 4,83,947 Risheehat 32,06,553 7,84,222 39,90,775 15,96,310 3,13,689 12,82,621 ---------------------------------------------------------------------------------------------------------------------------------------------------- 16,19,60,645 3,99,80,053 20,19,40,698 8,07,76,278 1,59,92,021 6,47,84,258 ---------------------------------------------------------------------------------------------------------------------------------------------------- Counsel for the respondent also filed a chart indicating the total income deduction allowed under section 32AB as per the Act and excess deduction allowed which reads as u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing comes to 32 per cent. So either the deduction be allowed on 40 per cent. income or on the total income. If the deduction is allowed on the total income, it can be apportioned and thereafter, the taxable income from tea growing should be 32 per cent. of the total income from tea growing and manufacturing income. Counsel for the petitioner places reliance on various decisions wherein the notices under section 148 were issued and before issuing of notice under section 148, the Income-tax Officer should be satisfied with the escapement of income and that the assessee has failed to disclose fully and truly all material facts for assessment of the income. Proviso to section 147: "Provided that where an assessment under subsection (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 secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in different fields." Finally, their Lordships held that there was inherent lack of jurisdiction in the Income-tax Officer to issue the notices under section 148 of the Act. Counsel for the respondent placed reliance on Indo-Aden Salt Mfg. and Trading Co. P. Ltd. v. CIT [1986] 159 ITR 624 ; AIR 1986 SC 1857 ; Central Provinces Manganese Ore Co. Ltd. v. ITO [19911 191 ITR 662 (SC) and Sri Krishna Pvt. Ltd. v. ITO[1996] 221 ITR 538 (SC). In Indo-Aden, Salt Mfg. and Trading Co. P. Ltd. v. CIT [1986] 159 ITR 624, 628 ; AIR 1986 SC 1857, it para. 7 (page 1859), their Lordships observed that mere production of evidence before the Income-tax Officer was not enough, that there may be omission or failure to make a true and full disclosure, if some material for the assessment lay embedded in the evidence which the Revenue could have uncovered but did not, then, it is the duty of the assessee to bring it to the notice of the assessing authority. In the case of Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 662 (SC), their Lordships observed as under : "If the true price has not been disclosed and there was under-invoicing, the logical conclusion prima facie is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 comes to Rs. 1,44,17,657 but finally he taxed the income only to Rs. 1,15,31,399 and if we take 20 per cent. of Rs. 1,44,17,657 that roughly comes to Rs. 28,86,258. So the net taxable income comes to Rs. 1,15,31,399 and that he has taxed. Therefore, the total taxable income from all these units comes to Rs. 6,47,84,258. There is no dispute on this assessed income. If we look into the assessment order as well as the chart produced by both counsel there is hardly any case of escapement of income. Secondly, the Department has failed to prove that the assessee has failed to disclose fully and truly all material facts required for assessment of its income. Assuming but not accepting that there is some mistake in calculation either on the part of the assessee or on the part of the Income-tax Officer that does not mean that the assessee has not disclosed fully and truly the material facts regarding his income. If some calculation mistake has been committed for the deduction under a particular section that can, be rectified under section 154 of the Act, but on that ground no notice under section 148 of the Act can be issued. When the notice itself is bad in law, there is no reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
