TaxTMI 
TaxTMI 
2010 (6) TMI 66
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....assessment year 20022003 in purported exercise of powers conferred by Section 147 of the Income Tax Act, 1961. A notice under Section 148 has been issued on 25 March 2009, beyond a period of four years of the end of the relevant assessment year. The issue that will fall for determination of the Court, as a result, is whether there was a failure on the part of the assessee to disclose fully and truly all the material facts necessary for his assessment for the assessment year in question. 3. The assessee filed a return of income on 29 October 2002 disclosing a nil total income. In the computation of its total income, the assessee disclosed a gross total income of Rs.3.42 crores. A deduction was claimed under Section 80HHC in the amount of Rs....
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....count, was Rs.3.31 crores. The gross total income under the Act was reported to be Rs.3.23 crores. 5. The Assessing Officer passed an order under Section 143(3) on 31 March 2006 and came to the conclusion that the assessee was carrying on manufacturing activity during the course of the assessment year. The deduction under Section 80HHC was accordingly recomputed. The issue was carried in appeal by the assessee and by an order dated 20 March 2007, the Commissioner (Appeals) accepted the contention of the assessee that it was not a manufacturer exporter but a trader exporter. Before arriving at this conclusion, the Commissioner (Appeals) had called for a remand report from the Assessing Officer. By his remand report dated 8 February 2007, th....
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.... appellant as trader exporter, the AO is directed to allow deduction u/s.80HHC by treating the assessee as trader exporter as per section 80HHC(3)(b) of the Act." 6. Effect was given to the order passed by the Commissioner (Appeals) on 28 January 2009. It is thereafter that the assessment has been sought to be reopened on 25 March 2009. The reasons on the basis of which the assessment is sought to be reopened have been furnished to the assessee on 18 June 2009 and they read as follows: "From the return of income, it is noticed that the assessee has claimed deduction u/s. 80HHC of Rs. 1,28,85,916/. However, on perusal of the case records, it is seen that the assessee is engaged in design & construction of Oil / Gas Petroleum Storage Termi....
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....s, the Assessing Officer could not have had reason to believe that income had escaped assessment or that the assessee was a manufacturer as distinguished from a trader in relation to the claim for deduction; (iv) In any event, in view of the second proviso to Section 147, the Assessing Officer could not have had reason to believe that income had escaped assessment since the specific issue on the basis of which the assessment is sought to be reopened was governed by proceedings in appeal before the Commissioner (Appeals). 8. On the other hand, Counsel appearing on behalf of the Revenue has supported the notice that was issued for reopening of the assessment on the grounds which are set out in the notice. 9. The reopening of the assessment ....
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....assessee concluded that goods have been purchased by the assessee which were then exported and that the case of the assessee fell within the purview of subsection (3)(b) of Section 80HHC. The Commissioner (Appeals) accepted the contention of the assessee. This shows that there was both a full and true disclosure of the facts by the assessee and that there was a due application of mind by the Assessing Officer. Hence, the condition precedent to the exercise of the jurisdiction to reopen the assessment beyond four years of the end of the relevant assessment year has not been fulfilled in this case. There was no failure on the part of the assessee to disclose fully and truly all material facts. The Assessing Officer could not have formed a rea....