TaxTMI 
TaxTMI 
2010 (6) TMI 56
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....sment Year 2002-03 the Petitioner filed a return of income on 30 October 2002 by which it returned a total income of Rs. 739.35 Crores. An assessment order was passed under Section 143(3) on 21 March 2005 determining the total income at Rs.750.62 Crores. On 23 March 2009 a notice under Section 148 was issued to the Petitioner proposing to reopen the assessment. Reasons have been disclosed in support of the notice for reopening the assessment on 23 October 2009. Objections to the issuance of the notice were filed on 4 November 2009. The Assessing Officer rejected the objections by an order dated 4 December 2009. 4. The reasons which have been disclosed to the Petitioner for reopening the assessment pertain to three issues. Firstly, the Petitioner had claimed a deduction under Section 80IA on the generation of electricity by a Captive Power Plant ('CPP') in the amount of Rs.86.37 lacs. The Assessing Officer notes that a scrutiny of the Profit and Loss Account shows that the Petitioner claimed a saving in Low Sulphur Heavy Stock ('LSHS') due to the use of steam generated as a byproduct in the generation of electricity which was quantified at Rs.29.95 Crores. On the basis of this, a....
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....or the assessment. In these circumstances, the jurisdiction under Section 147 could not have been exercised in the present case where the assessment is sought to be reopened beyond four years of the end of the relevant Assessment Year. 6. On behalf of the Revenue it has been submitted that where the reopening of an assessment takes place after the expiry of four years from the end of the relevant Assessment Year, the validity of the action would depend upon whether there was a full and true disclosure of the material facts. In the present case, it was urged that the issue relating to the entitlement of the claim of the Petitioner to a deduction under Section 80IA in respect of the CPP was not considered by the Assessing Officer. The Assessing Officer having failed to consider the ground on which the assessment is sought to be reopened, the action must be held to be lawful and proper. 7. The parameters of the enquiry of the Court in the present case would be defined by the circumstance that the assessment for Assessment Year 2002-03 is sought to be reopened beyond a period of four years. Consequently, the test to be applied is as to whether the assessee had failed to disclose ....
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....e assessee claimed a profit of Rs.86.37 lacs in respect of which a claim for deduction was made under Section 80IA. The profit and loss account of the Gas Turbine generators discloses an income from the generation of electricity of Rs.56.43 lacs. In addition, the assessee computed a saving in LSHS of Rs.29.95 Crores, thus reflecting an income of Rs.86.39 Crores. The expenses being to the extent of Rs. 85.53 Crores the assessee reported a profit of Rs.86.37 lacs. The bone of contention relates to the saving in LSHS of Rs.29.95 Crores. According to the Assessing Officer, but for the aforesaid item, the operations of the CPP would have actually reported a loss for the Assessment Year and this was obviated by the savings in LSHS which as noted above is reported at Rs.29.95 Crores. Together with its profit and loss account for the unit, the assessee in its working notes disclosed (i) the computation of profits and (ii) the break up on the basis of which the computation was arrived at. The assessee disclosed that the income was broken up into two components - (1) the value of the electricity generated was computed at the rate at which electricity could be purchased from the Andhra Prades....
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.... 80IA had been allowed in its own case during the course of the earlier Assessment Years. 12. The material which has been placed on the record would support the contention of the assessee that there was a full and true disclosure of all material facts relating to the claim of the assessee for a deduction under Section 80IA in respect of the profits made by the CPP at Vizag. In computing those profits, the assessee disclosed the two components which form a constituent element of the income of the unit. The assessee furnished a break up of the value which it placed on the generation of electricity and on the steam which had been generated as a byproduct. There was a disclosure that the basis for valuing the generation of electricity was the rate prescribed by the Andhra Pradesh State Electricity Board and that the basis for the valuation of the steam generated was the saving in LSHS which would otherwise be the raw material for the generation of the steam. Whether the assessee was correct or otherwise in adopting a particular method for valuation does not fall for determination in these proceedings since the question to which the Court has to address itself is as to whether there ....
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....le. The record before the Court shows that in response to the notice that was issued by the Assessing Officer under Section 142(1) on 19 February 2004 the assessee by its response dated 24 June 2004 clarified that the Ministry of Petroleum and Natural Gas had granted its approval for treating the additional capacity of the expanded project at par with that of new refineries for the purpose of the payment of import parity price. A copy of a letter dated 17 June 2002 of the Petroleum Planning and Analysis Cell set up by the Government of India in the Ministry of Petroleum and Natural Gas was annexed. The assessee also made a further disclosure in the following terms: "Further, we submit that the eligibility of the expansion unit for deduction u/s. 80I was considered by the Assessing Officer for the Asst. Year 1990-91 when the first phase of expansion had eligible profits for deduction under the Section. Copy of the relevant paras of the assessment order for the Asst. Year 1990-91 accepting the claim of deduction u/s. 80I for Visakh Refinery expansion as well as Mumbai Refinery expansion is attached (Attachment 7). For the same Asst. Year the deduction under the Section including t....