2004 (6) TMI 33

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.... on business and for the four assessment years filed its return of income. The assessment orders came to be passed under section 143(3) of the Act for the assessment years 1986-87,1988-89 and 1989-90 while the assessment was framed for the assessment year 1987-88 under section 143(1) of the Act. By the impugned notices (annexure "A" Colly), the respondent has sought to reopen the aforesaid assessments. Mr. S.N. Soparkar, learned senior counsel appearing on behalf of the petitioner submitted that the initiation of reassessment by issuance of the impugned notices under section 148 of the Act was bad in law because: (i) as recorded in the reasons, the Assessing Officer had initiated the reassessment proceedings on the direction of the Co....

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....inafter. Section 80HHC was inserted in the statute book by the Finance Act, 1983, with effect from April 1, 1983. However, the said section came to be substituted by the Finance Act, 1985, with effect from April 1, 1986, and the substituted section carried the following proviso: "Provided that an amount equal to the amount of the deduction claimed under this sub-section is debited to the profit and loss account of the previous year in respect of which the deduction is to be allowed and credited to a reserve account to be utilised for the purposes of the business of the assessee." The said proviso continued even while the section underwent various amendments. However, by the Finance Act, 1988, with effect from April 1, 1989, section 80....

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....ng period relevant to the assessment year 1990-91, the petitioner transferred the reserve account created in the aforesaid manner to the capital accounts of the partners of the petitioner-firm. It is not the case of the Revenue, and there is nothing in the reasons recorded to show that the petitioner had failed to disclose truly and fully any income liable to tax for the three assessment years in question. In the light of the fact that the assessments have been sought to be reopened after a period of four years from the end of each of the assessment years in question, the provisions of section 147 of the Act mandate that the Assessing Officer shall be vested with the jurisdiction to initiate reassessment proceedings only in case there is an....