AI Drafter 
TaxTMI 
TaxTMI 
2004 (9) TMI 32
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....; Rs. Loss for the assessment year 1992-93 34,40,715 Less: Taxable income for the assessment year 1993-94 adjusted 4,39,719 &nb....
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....nbsp; -------------- 26,01,461 Less: Taxable income for the assessment year 1996-97 adjusted 7,45,464 &....
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.... under section 139 or in response to a notice issued under subsection (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. Explanation 1.- ... Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (c) where an assessment has been made, but- (i) income chargeable to tax has been under assessed; or (ii) such income has been assessed at too low a rate; or (iii) such income has been made the subject of excessive relief under this Act; or (iv) ex....
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....ere was an "incorrect interpretation of accounts by the Assessing Officer" and for that "the assessee got the benefit of loss" for the assessment year 1992-93 which was carried forward to the subsequent years. Mr. R. N. Dutta, learned counsel appearing for the petitioner, submitted that the recorded reasons do not speak about any omission or failure on the part of the assessee to warrant the Assessing Officer to assume jurisdiction under section 147. Relying on the judgment of the apex court in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 it was submitted that tests have been laid down by the Supreme Court and the same should be followed while reopening an assessment beyond four years. Mr. Dutta also relied on the judgments of Ajanta Pharma Ltd. v. Asst. CIT [2004] 267 ITR 200 (Bom) and Hindustan Lever Ltd. v. R. B. Wadkar, (Asst. CIT) (No. 1) [2004] 268 ITR 332 (Bom) in support of his contentions. In the judgment of Calcutta Discount [1961] 41 ITR 191 the Supreme Court dealing with section 34(1) of the Indian Income-tax Act, 1922, held as follows: "Both the conditions, (i) the Income-tax Officer having reason to believe that there has been under-assessment and (ii) hi....
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.... cast a duty upon the assessee to instruct the Income-tax Officer on questions of law." Therefore, the Supreme Court held that where the Assessing Officer relies on his own records and commits mistakes, the same cannot be attributed to be the omission or failure on the part of the assessee. The judgment in the case of Parashuram Pottery [1977] 106 ITR 1 (SC) also considered the judgment of the five-judge Bench of the apex court in the case of Calcutta Discount Co. Ltd. [1961] 41 ITR 191. Thus, wrong interpretation of accounts by the Assessing Officer and grant of excess benefit cannot be a ground for reopening. The ratio of the judgment in Parashuram Pottery [1977] 106 ITR 1 (SC) equally applies in the case in hand. The reasons recorded, as noted, do not warrant assumption of jurisdiction by the Assessing Officer to issue notices under section 148. In my view, the law laid down by the Supreme Court interpreting section 147 is clear. If there is no failure on the part of the assessee to disclose fully and truly the material facts, wrong interpretation of accounts by the Assessing Officer leading to excessive relief cannot be a ground for reopening and thus cannot confer jur....