2003 (2) TMI 8

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....ng to the assessment year 1996-97, the petitioner had introduced a voluntary retirement scheme at its Borivli plant and had incurred expenditure of Rs. 10,02,23,735. The said scheme was approved by the Commissioner of Income-tax for exemption under section 10(10C) of the Income-tax Act. In the profit and loss account for the year ending March 31,1996, the petitioner had written off an amount of Rs. 33,40,818 towards the said payment of Rs. 10,02,23,735. In other words, the amount of Rs. 10,02,23,735 was written off over a period of 60 months as per the note in the profit and loss account for the year ending March 31,1996. On November 29,1996, the petitioner filed its return of income for the assessment year 1996-97 showing a loss of Rs. 549....

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....,2002, the Assessing Officer issued the impugned notice under section 148 of the Income-tax Act stating that for the assessment year 1996-97, income had escaped assessment within the meaning of section 147 of the Income-tax Act, 1961. The reason given in support of the notice under section 148 of the Act are annexed to the paper-book. As per the reasons, income had escaped assessment because, in the computation of income, the assessee had claimed the entire expense of Rs. 10,02,23,735 in one year though the VRS scheme was for 60 months. According to the reasons given for reopening the assessment, the assessee had got the benefit of the scheme for five years. That, such benefit was of an enduring nature and, therefore, the assessee was not e....

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....ning after four years if a matter involved grant of excessive relief, the Department could reopen the assessment in view of clause (c) of Explanation 2 to section 147 and in such cases there was no question of the Assessing Officer having reason to believe that income had escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. This argument of the Department was rejected by us in the above judgment in the case of IPCA Laboratories Ltd. (No.2) [2001] 251 ITR 416 (Bom). By virtue of the proviso to section 147, no action can be taken for reopening after four year unless the Assessing Officer has reason to believe that income had escaped assessment by reason of....