TaxTMI 
TaxTMI 
2010 (11) TMI 542
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....e Tax Act, 1961 (in short "the Act"). 2. The brief facts for adjudication as narrated in this petition are that the petitioner-company is manufacturer of steel forgings, rigs and accessories. It filed its return for the assessment year 2003-04 on 28.11.2003 declaring an income of Rs.35,11,659/-. The return was accompanied by audit report under Section 44AB duly certified by the Chartered Accountant. The case of the assessee was selected for scrutiny as per instructions of the Central Board of Direct Taxes. The sale of scrap of Rs.1,42,59,989/- which formed part of the profit and loss account was treated as part of the turnover as well as profits of the business. The Assessing Officer disallowed the deduction under Section 80HHC on....
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.... 148." 3. The assessee filed its objection by way of reply dated 18.5.2010 pleading that the reassessment cannot be made beyond a period of four years merely on the basis of change of opinion of the Assessing Officer. The Assessing Officer vide order dated 16.6.2010 rejected the objections filed by the assessee holding that there is income escaping assessment. Hence, the present writ petition. 4. We have heard learned counsel for the parties. 5. Learned counsel for the petitioner submitted that the reassessment notice, Annexure P-4, issued under Section 147 of the Act being beyond the period of limitation of four years, was bad in law. According to the learned counsel, the assessee had disclosed all the particulars al....
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....e learned counsel for the assessee had no application. 7. We have given our thoughtful consideration to the respective submissions of the learned counsel for the parties and do not find merit in the contention of learned counsel for the assessee. 8. The question that arises for determination in this petition is whether the assessee is entitled to challenge validity of initiation of reassessment proceedings under Section 147 of the Act after expiry of four years on the ground of lack of jurisdiction with the Assessing Officer even where the assessee had produced the entire material during assessment proceedings though there was no specific reference to that material during original assessment proceedings. 9. In our opi....
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....ice issued under sub-s. (1) of s. 142 or s. 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Explanation 1- Production before the AO of account books or other evidence from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to disclosure within the meaning of the foregoing proviso." 11. Section 147 of the Act empowers the Assessing Officer to assess or reassess income chargeable to tax where he has reason to believe that income for any assessment year has escaped assessment. However, the said provision does not authorize the Assessing Officer to take recourse to reassessment proceedings where after having....
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....ld as under:- "3.2. Explanation 1 to proviso to s. 147 is explicit and clear on the point. The Explanation gives a quietus to contention that where account books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence could be discovered by the AO. Nor will the assessee be able to contend successfully that by disclosing certain evidence, he should be deemed to have disclosed other evidence, which might have been discovered by the assessing authority if he had pursued investigation on the basis of what has been disclosed. The position remains that so far as the primary facts are concerned, it is the assessee's duty to disclose all of them including particular entries i....
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..... He has to further bring to the notice of the AO particular items in the books of account or portions of document which are relevant. Even if it is assumed that, from the books produced, the AO could have found out the truth, he is not on that account precluded from exercising the power to reassess the escaped income [see, Kantamani Venkata Narayana & Sons vs. Addl. ITO (1967) 63 ITR 638 (SC); Sowdagar Ahmed Khan vs. ITO (1968) 70 ITR 79 (SC); ITO & Ors. vs. Lakhmani Mewal Das 1976 CTR (SC) 220: (1976) 103 ITR 437 (SC), 445]. 3.6. The fact that the AO could have found out the correct position by further probing the matter does not exonerate the assessee from the duty to make a full and true disclosure of the material facts." 1....