2009 (8) TMI 58

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....yster films. It has its industrial undertaking at Silvasa which is a notified backward area as specified in the Eighth Schedule of the Income Tax Act. For the Assessment Year 2001-2002, the petitioner company filed a return of income under Section 139(1) declaring an income of Rs.3,37,167/- under the normal provisions of the Act and an income of Rs.2,58,98,479/- under Section 115 JB of the Act. The petitioner company claimed a deduction of Rs.2,18,17,975 under Section 80IA of the Act. The return of income was processed under Section 143(1) and selected for scrutiny by issuance of notice under Section 143(2) of the Act. 3. During the course of assessment proceedings, the Assessing Officer asked the petitioner company to explain the basis ....

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....s raised by the petitioner company to the initiation of reassessment proceedings. Hence this writ petition. 5. We may straightaway refer to the reasons given by the respondent for reopening of the assessment and which are as under: "Reasons for reopening the case u/s 147 of the Income Tax Act in the case of M/s Northern Strips Ltd. in Asstt. Year-2001-02 The return of income in this case was filed on 31-10-2001 declaring an income of Rs.3,37,167/- and Book Profit u/s 115 JB of the Act of Rs.2,58,98,479/-. Return was processed u/s 143(1) of the IT Act on 25-02-2003 and assessment u/s 143(3) of the Act was made on 31-03-2003. On perusal of the assessment records it has been found that during the year assessee has claimed deduction u/....

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....Asstt. Commissioner of Income Tax Circle-13(1), New Delhi." 6. The counsel for the writ petitioner has urged four submissions before this court: (i) The reasons given for the assessment do not show any averment that the assessee has failed to fully and truly disclose all material particulars. This averment was necessary in as much as the proceedings for reassessment were initiated after the expiry of a period of four years and hence covered by proviso to Section 147(2) of the Act. The counsel for the petitioner relies upon the judgment reported as JSRS Udyog Ltd. Vs. ITO, 313 ITR 321 in support of this proposition. (ii) A reference to the reasons reproduced above show that no new fact has been referred to as the reason for reope....

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....has been found that during the year assessee has claimed deduction 80IB of the Act for Rs.2,18,17,975/-. As per section 80IB (2) (iii) of the Act, one of the basic condition for claim of deduction under this section is that "it manufactures or produces any article or thing not being any article or thing specified in the list in the Eleventh Schedule, or operates one or more cold storage plant or plants, in any part of India". During the year under consideration the assessee was engaged in cutting and slitting of polyester film of various sizes, weight and micron. In fact the assessee has been engaged in mere processing and packing business and not any manufacturing or production of any article of thing. Hence the assessee is not entitled fo....