TaxTMI 
TaxTMI 
2002 (10) TMI 74
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....e issued after the expiry of four years from the end of the relevant assessment years, even in the absence of the condition or conditions as envisaged by a proviso to section 147 of the Act. To appreciate the challenge the relevant facts are thus: The petitioner is a limited foreign company incorporated under the Municipal laws of Panama. The company has been engaged, inter alia, in designing, fabricating, construction, installation as a sub-contractor of various contractors of the Oil and Natural Gas Commission (India). The petitioner-company pursuant to section 139 of the Act submitted returns for the assessment year 1989-90, 1990-91, 1991-92, 1993-94 and 1994-95. The company thereunder offered one per cent. of the gross receipts of the....
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....f the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (....
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....he assessee. It is the failure or omission on the part of the assessing authority, which does not lead in any manner to constitute failure or omission on the part of the assessee entitling them to invoke section 147 of the Act, after the prescribed period of four years. Mr. Posti submitted that the assessee has not disclosed the total income, but disclosed only one per cent. of gross income so far as work done outside India is concerned. The assessee has also not disclosed receipt on account of mobilisation and demobilisation outside of India income, which constituted the income taxable at ten per cent. as such receipt. The assessment was done in respect of the work outside of India income at one per cent. excluding the receipt on account ....
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.... tax has been underassessed by an amount of Rs. 29 lakhs. Therefore, I have reason to believe that income chargeable to tax has escaped assessment in view Of clause (c) of Explanation 2 to section 147 of the Income-tax Act, 1961." Even the reasons as adopted by the authority do not furnish any premises for the submission made by Mr. Posti. Moreover, the communication does not suggest even remotely in any manner any failure or omission on the part of the assessee envisaged by the proviso referred to above. On the contrary the authority resorted to Explanation 2 to section 147 of the of the Act. Mr. Posti, then to sustain the validity of impugned notices has placed reliance on clause (c) of Explanation 2 to section 147 which reads thus: "E....
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....the position of law available through the verdict of the higher authority could not be such failure on the part of the assessee which authorises the assessing authority to reopen the assessment. Moreover, the view of the apex Tribunal on which the assessing authority has relied, has merely endorsed the position of law as expressly incorporated under section 44BB. It could not be treated as change in view or approach so as to give occasion for the Assessing Officer who has a reason to believe as contemplated by section 147. If there was any erroneous or improper approach in assessment under section 143 of the Act, then certainly it could not be failure on the count of the assessee. The company sought support to the submission from the view e....