TaxTMI 
TaxTMI 
TaxTMI 
2015 (9) TMI 334
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....t that the treatment of service income for the purpose of calculation of deduction u/s 80 HHC was not discussed at any prior stage, and the assessee had made no clear submission in this regard in earlier proceedings. ii) Whether ITAT was right in holding that Explanation 1 to Sec. 147 is not applicable to the facts of the present case, despite the fact that excessive deduction was given to the assessee u/s 80 HHC due to failure on its part to exclude service income from export profits. iii) Whether ITAT was right in ignoring Supreme Court's decisions in Calcutta Discount Co. Ltd. Vs. ITO (1961) 41 ITR 191(SC), CIT Vs. Chidambran Chettiar (1971) 80 ITR 467 (SC), Indo Aden Salt Mfg & Trading Co. Pvt. Ltd. Vs. CIT (1986) 159 ITR 624 (SC) and other cases. iv) Whether ITAT was right in ignoring the Hon'ble Supreme Court's decision in the case of CIT Vs. Chidambran Chettiar (1971) 80 ITR 467 (SC) that states "if some material for assessment is embedded in the evidence or submission which revenue could have uncovered but did not so, it is the duty of the assessee to bring it to the notice of the assessing authority. The assessee knows all material and relevant facts, the....
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....lt on its part to disclose fully and truly all material facts necessary for re-assessment was answered against it in order dated 30.11.2009. Accordingly, the income was re-assessed at Rs. 25,99,14,093/-. The assessee filed an appeal before the concerned Commissioner taking various pleas, which was accepted by holding that the re-assessment proceedings initiated by way of issue of notice under Section 148 of the Act on 31.3.2009 was not sustainable in law and the subsequent order passed under Section 143(3) read with Section 147 of the Act on 30.11.2009 was accordingly held to be bad. While recording the finding, it was held that the primary facts had been disclosed and the factum of service income was separately shown along with the return of income. The reasoning that the Assessing Officer had to go through the voluminous material was rejected since he had dealt with the said issue and reduced the admissible deductions. In the notice, it had been stated that the reassessment proceedings were initiated for the failure on the part of the assessee to disclose fully and truly all material facts in respect of the claim of deduction under Section 80HHC. Accordingly, it was held that the....
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....13. The entire thrust of the findings recorded by the Assessing Officer in his order dated 13-3-2003 is to justify his satisfaction about escapement of income. According to him, it was a clear case of escapement of income as defined in Explanation-2 to Section 147 as the assessee had been allowed excessive relief under Section 80-O of the Act. However, it is not necessary for us to go into the merits of this finding as the second requirement of the proviso has not been satisfied obviously. The reasons recorded by the Assessing Officer for initiation of proceedings under Section 147 of the Act have already been reproduced above. A bare perusal of the same shows that the satisfaction recorded therein is merely about escapement of income. There is not even a whisper of an allegation that such escapement had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. Absence of this finding, which is a "sine quo non" for assuming jurisdiction under Section 147 of the Act in a case falling under the proviso thereto, makes the action taken by the Assessing Officer wholly without jurisdiction. As already observed, ....
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....ted power of making adjustments on the basis of information available in the return. However, when an assessment is made under Section 143 (3) of the Act, the Assessing Officer has very wide power to examine the genuineness of the claims made in the return and require the assessee to furnish whatever information the Assessing Officer deems necessary. In the present case, the assessment had been made under Section 143(3) of the Act and if the Assessing Officer was of the view that he required profit and loss account and depreciation charts of the assessment years 1995-96 and 1996-97 for examining the correctness of the claim under Section 80IA of the Act, he could have required the assessee to produce the same. Failure of the Assessing Officer to do so, cannot be treated at par with the failure of the assessee to disclose fully and truly all material facts necessary for its assessment." 10. The Commissioner, Income-tax and the Appellate Tribunal have noticed the detailed facts and recorded the finding as noticed above that the re-assessment was on the basis of the subsequent judgment of the Hon'ble Apex Court. Thus, apparently on the change of the opinion and in view of the pri....