TaxTMI 
TaxTMI 
2014 (9) TMI 4
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....ispute that the first proviso to section 147 of the said Act would be relevant. The first proviso to Section 147 of the said Act is reproduced herein below:- "147. .... Provided that where an assessment under sub-section (3) of section 243 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year." 3. The facts are that the petitioner had filed its return of income on 31.10.2005 whereunder it had claimed a deduction of Rs. 6,34,90,243/- under section 10B of the said Act on the ground that it is a 100 per cent export oriented unit at Pune which had been set up in the assessment year 2000-2001 and had earned profit to the extent of Rs. 6,34,90,243/- which were not exigible to tax on account of the....
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....ehalf of the petitioner, was that in a case where the proviso to section 147 of the said Act was applicable, it must be clearly indicated that the escapement of income was on account of the failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment. Mr Syali took us through the purported reasons behind the issuance of the notice under section 148 of the said Act. The purported reasons as indicated by the Assistant Commissioner of Income Tax were as under:- 1 Reasons for the belief that income has escaped assessment The original assessment u/s 143(3) was completed in December 28/11/2008, at 64,36,160 u/s 143(3) as against the returned loss of Rs.(-)4,71,20,033/-. Perusal of records revealed that the assessee had claimed deduction u/s 10B on Pune Unit amounting to Rs. 6,34,90,243/- as 100% EOU, which undertook activities on job work basis. This section applies to any undertaking which manufacturing or produces any article on things or computer software. Hence, the deduction u/s 10B should have been disallowed. This has resulted in incorrect allowance of deduction u/s 10 amounting to Rs. 6,34,90,243/-. Secondly, the assesse....
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....f income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. If this condition is not satisfied, the bar would operate and no action under section 147 could be taken. We have already mentioned above that the reasons supplied to the petitioner does not contain any such allegation. Consequently, one of the conditions precedent for removing the bar against taking action after the said four year period remains unfulfilled. In our recent decision in Wel Intertrade Private Ltd. [2009] 308 ITR 22 (Delhi) we had agreed with the view taken by the Punjab and Haryana High Court in the case of Duli Chand Singhania [2004] 269 ITR 192 that, in the absence of an allegation in the reasons recorded that the escapement of income had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, any action taken by the Assessing Officer under section 147 beyond the four year period would be wholly without jurisdiction. Reiterating our view-point, we hold that the no....
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....teps of processing carried out by SIPL: 1. Raw beads are examined by SIPL; 2. Raw beads are fixed on the frames; 3. Beads are dipped in a lacquer based on nitro cellulose (made of nitro cellulose, Butyl Acetate & Ethanol) within DSW developed machinery supplied to EOU. 4. Subsequent to dipping the glass beads are subjected to several coating processes, which impart the qualities of a pearl. 5. Beads are then enameled. 6. After dipping and coating, the semi-finished pearls are pre-dried and removed from the frames. 7. Thereafter the pearls are baked in ovens to ensure that the layers coated on the glass beads are permanently stable. 8. The next step is to wash the pearls in soft water to remove any extraneous material. 9. Process of visual quality control. 10. Quality control is carried out on the standard operating procedures of DSW. 11. Pearls are knotted, packed, babeled and sent back to DSW." 13. Apart from this, in the course of the original assessment proceedings the petitioner, in response to a notice under Section 143(2) and 143(1) of the said Act submitted information on the point raised by the Assessing Officer with regard to the busines....