TMI Blog2008 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... For the Petitioners : Mr C.S. Aggarwal, Sr Advocate with Mr Prakash Kumar For the Respondent : Mr R.D. Jolly with Mr Paras Chaudhary CORAM:- HON'BLE MR JUSTICE BADAR DURREZ AHMED HON?BLE MR JUSTICE RAJIV SHAKDHER BADAR DURREZ AHMED, J (ORAL) 1. Rule. With the consent of the counsel for the parties, the writ petition is taken up for disposal straightaway. 2. In this writ petition, the petitioner is impugning the notice dated 28.03.2007 under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the said Act") and the order dated 17.10.2007 disposing of the objections to the initiation of re-assessment proceedings. The petitioner is seeking the quashing of the said notice and the said order as also the ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional liability arose on account of purchases is enclosed marked as Annexure-M." 4. As noted above, the petitioner enclosed party-wise details in respect of whom the additional liability arose on account of purchases in Annexure-M to the said reply. Thereafter, the Assessing Officer framed the assessment on 28.03.2003 under Section 143 (3). Though, in the assessment order there is no mention of the aspect of loss on account of exchange rate fluctuation, it is apparent that the Assessing Officer, through the said notice dated 10.01.2002, required the petitioner to furnish details in respect thereof, which the petitioner did by virtue of its reply dated 05.02.2002. The only sentence that appears in the assessment order is that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Custom Authorities. The ITO made a office note "The complete information yet to be received from the Custom Authorities. In case of any discrepancy found after the receipt of information from the Customs Authorities the relevant action as per law will be taken". Assessee company has claimed a deduction of Rs.10,69,996/- on account foreign exchange fluctuation in Profit and Loss account. The Ministry of Law clarified that exchange loss arrived at on the basis of fluctuation is the rate of exchange not locked [(sic) backed] by actual remittance can not be allowed as deduction in computing the income and the above amount is not allowable expenditure as it was not locked [(sic) backed] by actual remittance. The loss on account of Foreign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign exchange fluctuation and the petitioner / assessee had furnished all the details that were requisitioned from it. There could be no case of non-disclosure of all the material facts. 7. Apart from this, the learned counsel for the petitioner also drew our attention to the counter-affidavit of the respondents wherein the respondents have stated that from the reasons recorded, it is very clear that the office note is not the reason for reopening the assessment and that the actual reason for reopening the assessment is the clarification issued by the Ministry of Law with regard to non-allowability of exchange fluctuation loss not backed by actual remittance. 8. Mr Jolly, who appeared on behalf of the respondents, submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 147 are being invoked after the period of four years from the end of the relevant assessment year, in addition to the Assessing Officer having reason to believe that any income chargeable to tax has escaped assessment, it must also be established as a fact that such escapement of assessment has been occasioned by either the assessee failing to make a return under Section 139 etc. or by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, for that assessment year. In the present case, the question of making of a return is not in issue and the only question is with regard to the second portion of the proviso, which relates to failure on the part of the assessee to di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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