TaxTMI 
TaxTMI 
2014 (9) TMI 285
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....e that advance tax of Rs. 75,000/- had been paid. A refund of Rs. 25,563/- was claimed. The previous or the financial year was 2005-2006. According to the writ petitioner, he attached a note that Rs. 17,97,336/- was received by him in that financial year as subsidy under the West Bengal Industrial Promotion Scheme, 1994. This subsidy was released further to a notification No. 1460-FT dated 27th May, 1994 issued by the government of West Bengal. He treated the receipt as being of a capital nature. Apparently, the writ petitioner, according to the averments in the writ petition, also, mentioned in the note that the said receipt was nontaxable as held by the Income Tax Tribunal Kolkata in its order dated 18th May, 2001 in ITA No. 1080/Cal/9....
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....make a back assessment, but in section 147 of the Act (with effect from 1st April, 1989), they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen". An assessment may be reopened when in spite of exercise of due diligence something escaped the attent....
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....aragraph-2 the writ petitioner stated that in the assessment year 2003-2004, assessment was completed under Section 143(3). The amount of subsidy was excluded from the total income on the ground that it was a capital receipt. The said assessment for the assessment year 2003-2004 was scrutinised in Section 263 proceedings and upheld. The objection of the writ petitioner was rejected by an order dated 10th June, 2013. The Income Tax Department followed the ratio of Sahney Steel, a judgment of the Hon'ble Supreme Court reported in 228 ITR 203 The entire proceedings under sections 147/148 of the said Act, beginning from issuance of the notice till passing of the order rejecting the objection of the writ petitioner are challenged in this writ....
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....he business capacities, modernisation and improving marketing capabilities and those were for assistance on capital account...............the subsidy was a capital receipt". In Sahney Steel the Supreme Court opined that it was a question of fact, in each case, as to whether subsidy was to be taken as a capital receipt or a revenue receipt. In Commissioner of Income-Tax V. Rasoi Ltd. reported in (2011) 335 ITR 438 (Cal) Bhaskar Bhattacharya , J speaking for a Division Bench of this Court held with specific regard to this scheme that the subsidy was capital in nature. Therefore, when there was a specific observation of a Division Bench of this Court that this particular subsidy was to be taken as a capital receipt and not a revenue rece....
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....be decided otherwise or treated in any other way by the revenue with regard to any other assessee, so as to maintain consistency and fairness in government action. In Amrit Feeds Ltd. Vs. Assistant Commissioner of Income-Tax and Others reported in (2012) 344 ITR 187 (Cal) I had remarked as follows:- "The law regarding reopening of assessment is very strict. If an assessment could have been done but has not been done or erroneously done it cannot be done after expiry of the prescribed time limit. Exception can be made in very special circumstances. One of them, as I have stated earlier, being "escapement of income"/ Linked to this is the principle that a change of opinion would not constitute such escapement. In India Steamship Co. Ltd....