TaxTMI 
TaxTMI 
2014 (1) TMI 930
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....ake wrong claim of deduction u/s 80HHC on royalty which is not derived from export business." 2. Briefly the facts are, the assessee is a state government undertaking engaged in the activity of development of mineral resources including exploration, exploitation and beneficiation. For the impugned assessment year the assessee filed its return of income on 30/11/2003 declaring total income of Rs. 2,98,70,250/- and the same was initially processed u/s 143(1) and a refund of Rs. 72,59,187/- was granted to the assessee. Subsequently, the assessee's case was selected for scrutiny. During the scrutiny assessment proceeding the assessee filed a revised return of income declaring income of Rs. 3,08,14,059/- which was accompanied by audited account....
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....to the initiation of proceeding u/s 147 of the Act, after expiry of 4 years from the end of the relevant FY, submitted that during the assessment proceedings u/s 143(3) of the Act, the AO after examining the claim u/s 80HHC proceeded to recompute the deduction after considering all the facts and materials submitted in course of assessment proceeding. It was submitted that, while computing deduction in the original assessment u/s 80HHC, the AO has also excluded sales tax recoveries/excess recoveries from the total turnover, which were later on allowed in the appellate proceedings, hence, the deduction u/s 80HHC received substantial attention and verification during the original assessment proceedings. It was submitted that after completion o....
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....ered all the relevant documents and evidence and made a disallowance on the issue, thus recomputing the deduction. This very issue was the subject matter of appeal before the Hon'ble CIT(A) and the Hon'ble ITAT who adjudicated on the matter. The AO duly gave effect to the orders of the higher authorities. 4.11 It is clear from above that in view of the documents filed by the appellant and facts disclosed by the appellant, deduction u/s 80HHC was considered and recomputed. The AO recorded the reasons for issue of notice u/s 148 as given in the remand report reproduced above. 4.12 A plain reading of the above reasons in this case indicates that there was no failure on the part of the appellant to fully and truly disclose all material facts ....
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.... that the assessee having disclosed truly and fully all material facts necessary for its assessment in the return of income as well as in course of original assessment proceeding u/s 143(3) of the Act, reopening of the assessment after expiry of 4 years from the end of the AY is invalid in law. The learned AR further inviting our attention to the discussion made by the AO in his order passed on 18/01/2006 u/s 143(3) of the Act submitted that the AO has discussed in great deal with regard to accrual of income in respect of mining franchise fees and thereafter has added it to the total income by coming to a conclusion that the mining franchise fees has accrued as income to the assessee during the year under dispute. It was further submitted t....
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....s the escapement of income is attributable to failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment. In the facts of the present case, there is no dispute to the fact that the assessment proceeding u/s 147 of the Act was initiated much after expiry of 4 years from the end of the AY under consideration. Therefore, it is necessary to see whether there is failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. As can be seen from the observation made by the AO in the order passed u/s 143(3) read with section 147 of the Act, the assessment was reopened for the reason that the AO while calculating deduction u/s 80HHC of the Act, has omi....
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....after applying his mind to the facts and materials on record has taken conscious decision while calculating deduction u/s 80HHC. Hence, considering the aforesaid facts & circumstances, it cannot be said that there is any failure on the part of the assessee to disclose truly and fully all the material facts necessary for its assessment. Even otherwise also there is nothing on record to suggest that escapement of income, if at all, there is any, was on account of failure on the part of the assessee to disclose fully and truly all material facts. At least, we do not find any such allegation against the assessee. Therefore, when all facts relating to mining franchise fee and claim of deduction u/s 80HHC was brought on record by the assessee dur....