TaxTMI 
TaxTMI 
TaxTMI 
2015 (5) TMI 433
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....f cutting and polishing of diamond. The case was selected for scrutiny assessment by issuing notice under section 143(2) of the Income Tax Act. That after making detailed inquiry, the Assessing Officer assessed the income at Rs. 84,80,421/- after accepting the rectification application of the assessee for claim of deduction of respondents. 2.02. That thereafter the petitioner has been served with the impugned notice under section 148 of the Income Tax Act dated 20/1/2014 for reassessment of the income of the petitioner for A.Y. 2007-2008. 2.03. That at the request by the petitioner, vide letter dated 8/3/2014, the petitioner has been served with copy of the reasons recorded for reopening of the assessment for the A.Y. 2007-2008 on 6/6/2014. 2.04. That thereafter the petitioner submitted detailed objections vide communication dated 27/6/2014 objecting to reassessment proceedings. 2.05. That by order / communication dated 25/9/2014, the assessing officer overlooked the objections raised by the petitioner against the impugned reassessment proceedings and hence the petitioner has preferred the present Special Civil Application under Article 226 of the Constitution of India challeng....
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....al and without jurisdiction and more particularly as conditions for initiation of the reassessment proceedings beyond the period of 4 years, are not satisfied. 3.03. Mr.Hardik Vora, learned advocate appearing on behalf of the petitioner - assessee has heavily relied upon the decision of this Court in the case of Niko Resources Ltd. Versus Assistant Director of Income Tax, reported in (2014) 51 Taxman.com 568 (Gujarat) in support of his request to quash and set aside the impugned reassessment proceedings. 3.04. Mr.Hardik Vora, learned advocate appearing on behalf of the petitioner - assessee has also heavily relied upon the decision of the Division Bench of this Court in the Case of Gujarat Lease Financing Limited Versus Deputy Commissioner of Income Tax, Circle-IV, Ahmedabad dated 24/6/2013 passed in Special Civil Application No. 3048 in support of his submission that the initiation of the impugned reassessment proceedings are absolutely illegal and without jurisdiction. 4.00. Present petition is opposed by Mr.Sudhir Mehta, learned advocate appearing on behalf of the revenue. 4.01 An Affidavit-in-reply is filed on behalf of the respondent justifying the initiation of the ....
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.... the present case initiation of reassessment proceedings is beyond 4 years from the assessment year. Therefore, unless and until it is observed and found that the income has escaped assessment due to the failure on the part of the assessee to disclose truly and fully all material facts for the assessment, the Assessing Officer is not authorized to make reassessment even in the event of his having reasonable belief that any income chargeable to tax has escaped assessment for any assessment year. As per the first proviso to section 147, assessment can be reopened under section 147 after expiry of 4 years only if (1) assessee failed to make a return under section 139 or in response to the notice under section 142(1) or under section 148 and he failed to disclose truly and fully all material facts necessary for the assessment. Once the case of the assessee is covered by the first proviso to section 147, reassessment proceedings beyond the period of four years from the end of the relevant assessment year would be without jurisdiction and bad in law. If all material facts are furnished by the assessee and there remains no omission or failure on the part of the assessee to disclose truly ....
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....%- 826607 3-438868 4-134259 1399734 764169 TOTAL 4153673 2676004 1477669 The claim of additional depreciation contrary to the provisions of the Act had resulted into the escapement of income to extent of (Rs. 14,77,669/-) due to the failure on the part of the assessee to disclose truly all material facts necessary for his assessment." Thus, from the aforesaid, it appears that the assessment for A.Y. 2007-2008 is sought to be reopened on the ground that in view of the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax Versus Gem India Manufacturing Co., reported in (2001) 249 ITR 307 (SC) , cutting and polishing of diamond cannot be considered as business of manufacture or production and therefore, the the additional depreciation claimed by the assessee was not allowable and therefore, the assessee claimed additional deprecation incorrectly and therefore, there is underassessment of Rs. 14,77,669/-. However, it is required to be noted and it appears from the original assessment order that while submitting the original return of income, the assessee claimed depreciation at 20% / 10% in respect of Lesser Machine, Leth, G....
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....or any one to guide the Assessing Officer in respect of inference "factual or legal", which requires to be drawn by him alone. 17. Once the case of the assessee is covered by the 1st proviso to section 147 of the Act, the reassessment proceedings beyond the period of 4 years from the end of the relevant assessment year would be without any jurisdiction and bad in law, if all material facts are furnished and there remained no omission or failure on the part of the assessee to disclose truly and fully all material facts. This Court, after extensively discussing law on the issue in case of Gujarat Lease Financing Ltd. (supra), has held thus: "10. It can be clearly noted from the reasons recorded that there is no mention at all of the assessee having not disclosed fully or truly material facts which were necessary for the purpose of computing the income of the assessee. Assuming that in the notice for reopening. such wordings are not specifically mentioned and they can be supplemented either while rejecting the objections or by way of affidavit of the Assessing Officer, then also, the revenue has failed to point out as to in what manner there has been non-disclosure on the part of th....