TaxTMI 
TaxTMI 
2010 (8) TMI 310
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....nd export of electrical lamp and, thus, its profit derived from such undertaking was exempted from tax for a period of 10 consecutive assessment years under Section 10-A of the Act. Ten years expired in the assessment year 2002-03 relevant to the financial year 2001-02. The petitioner filed income-tax returns for the assessment years 1993-94 onwards. The petitioner has also filed income-tax return for the assessment year 2000-01 on 23.11.2000 declaring NIL taxable income. The petitioner claimed exemption on an income of Rs. 8,21,01,337/- under Section 10-A of the Act. In the record there is nothing to show that any assessment order either under Section 143(1)-(a) or Section 143(3) of the Act was passed. Learned counsel for the petitioner, S....
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.... only in case where the income chargeable to tax is escaped assessment. He submitted that since the income of the petitioner was exempted to tax under Section 10-A of the Act and was not chargeable to tax, therefore, no action could be taken. He submitted that Explanation 2 to Section 147 of the Act is to be read along with Section 147(1) of the Act. He submitted that whether the assessee has claimed lesser amount of depreciation and increased the amount of income is wholly irrelevant as the entire income of the assessee was exempted from tax under Section 10-A of the Act in the year under consideration. He submitted that the depreciation in the year under consideration has been claimed in the same way as it was claimed in the preceding a....
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....-vis the assessment year involved. In support of the contention, he relied upon various decisions of the Supreme Court and the High Courts. Sri Shambhu Chopra, learned Standing Counsel, raised a preliminary objection that the petitioner should have filed objection to the reasons recorded before the assessing authority in the light of the law laid down by the apex Court in the case of GKN Driveshafts (India) Ltd. v. Income-Tax Officer and others reported in (2003) 259 ITR 19. He submitted that the case of the petitioner is covered under Explanation 2 of Section 147 of the Act as the petitioner has wrongly claimed the depreciation. He submitted that the notice under Section 148 of the Act was issued and the action was taken under Sect....
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.... the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years." In the present case we find that learned counsel for the petitioner has placed more emphasis and reliance on the provision of Section 43-A of the Act, which has been inserted by the Finance Act, 2002 with effect from 1.4.2003, which, according to learned counsel for the petitioner, has set at rest all the controversies relating to the claim of depreciation. Since this provision was not available with the assessing authority when the notice under Section 148 of the Act was issued, it would be appro....