TaxTMI 
TaxTMI 
2025 (11) TMI 575
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....stances of the case, the re-assessment proceedings can be initiated against the petitioner after the expiry of 4 years when there was no concealment on the part of the appellant as the original assessment has been finalized under Section 143(3) of the Act?" 3. Brief facts necessary for adjudication of the matter are that for the assessment year 2003-04, appellant-assessee which claims to be engaged in the business of manufacturing and export of engineering goods, filed its return on 30.11.2003 declaring total income of Rs. 2,96,59,322/-. Appellant had claimed deduction under Sections 80-IB and 80HHC of Income Tax Act, 1961 (for short 'the Act'). Return was processed under Section 143(1) of the Act, on 16.03.2004 at the same income. Matter was, however, selected for scrutiny and order was passed by Assessing Officer on 28.02.2006 (Annexure A-1) under Section 143(3) of the Act, assessing the income to be Rs. 4,35,32,840/-. 4. Thereafter, notice dated 18.03.2010 under Section 148 of the Act was issued and served on assessee on 19.03.2010. Reasons recorded therein and as reproduced in order dated 04.01.2012 (Annexure A-4), passed by learned Tribunal read as under:- "The ....
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....f four years especially keeping in view the fact that assessment was finalized under Section 143(3) of the Act and there was no concealment on the part of appellant - assessee who had claimed and was afforded deduction under Sections 80-IB and 80HHC of the Act. It was thus prayed that this appeal be allowed. 7. Learned counsel for respondent refuted the arguments raised on behalf of appellant and submitted that dispute in this case was regarding deduction claimed under Section 80-IB of the Act and whether it is to be deducted from profits and gains of business while calculating deduction under Section 80HHC of the Act. This question has been answered against the respondent by Hon'ble the Supreme Court in Shital Fibers Ltd. Vs. Commissioner of Income-tax (2025) 174 taxmann.com 807 (SC). It is further submitted that there is no prohibition to reassess the amount in question. Reference is made specifically to 1st proviso of Section 147 of the Act as well as first Explanation and Explanation 2-(c), to submit that reassessment has been correctly carried out. It was submitted that no substantial question of law is involved for consideration in this matter. Dismissal of appeal was soug....
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.... assessee has also not given the option either to choose DEPB or DDB. As regards the request of the assessee to keep the assessment pending in abeyance, it is not accepted being the time-barring assessment is involved, which is decided keeping in view the Amendment No. 55 dated 28.12.2005 of 80HHC of 1.T. Act, 1961. 2.5 Further, the assessee has failed to fulfill the condition contained in Third proviso inserted by The Taxation Laws (Amendment) Act, 2005. The counsel was confronted as to why deduction u/s 80HHC should not be disallowed on profit on transfer of DEPB when the condition laid down by the new amendment is not fulfilled. In this connection, the assessee has submitted that he has already filed the written submission on the issue and requested that deduction u/s 80HHC may be allowed. As per the Third proviso the assessee has to fulfill the condition that there was an option to choose between DEPB and duty drawback, when the assessee company was allowed both the incentives. By virtue of the Third proviso inserted by The Taxation Laws (Amendment) Act, 2005, I am constrained to re-compute the deduction u/s 80HHC by reducing 90% of DEPB as other receipt and not increa....
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....nits i.e. at C-142 & C-166, Focal Point, Ludhiana, the assessee has reduced the value of incentive received as per the judgment of Supreme Court in the case of CIT Vs. Sterling Foods (237 ITR 579) and also reduced the trading profits. But in its reply filed by the assessee on 14.02.2006 the assessee has submitted that in view of the amendment made in section 28 by inserting sub section (iiid) & (iiie) by the Taxation Laws Amendment Bill, 2005 DEPB & DFRC are now specifically included in the definition of business income so the amount of DEPB should not be deducted from the profits and deduction should be allowed on the amount of DEPB/PFRC. 8. I have gone through the written submission of the assessee and found no force in it, as there is no effect of insertion of sub-section (iiid) & (iiie) by the Taxation Laws Amendment Act, 2005, on the case of the assessee. Since the amount of DEPB does not come in the definition of business income "derived" but the same is income from other sources. The judgment of Supreme Court in the case of CIT Vs. Sterling Foods is clearly applicable in the case of the assessee, as the assessee had rightly claimed the deduction u/s 80IB at the time....
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....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 (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.- Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2.- For the purposes of this section, the followin....
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....d by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012. Issue of notice where income has escaped assessment- 148. (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139 : Provided that in a case- (a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and (b) subsequently a notice has been served under sub-section (2) of....
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....ssment only on the basis of change of opinion. Assessing officer has the power to reopen provided there is tangible material to come to the conclusion that there is escapement of income assessment. Assessment order under Section 143(3) of the Act, it was noted is preceded by notice, inquiry and hearing under Section 142(1), (2) and (3) as well as under Section 143(2) of the Act. Therefore, in this situation where assessee had not made any false declaration, a subsequent subjective analysis by the Assessing Officer would amount to a mere change of opinion which cannot be a ground for reopening of assessment. Relevant portion of judgment in M/s. Mangalam Publication's case (supra) reads as under :- "32. Let us now discuss some of the judgments cited at the bar. First and foremost is the decision of a constitution bench of this Court in Calcutta Discount Company Limited (supra). That was a case under Section 34 of the Indian Income Tax Act, 1922 which is in pari-materia to Section 147 of the Act. The constitution bench explained the purport of Section 34 of the Indian Income Tax Act, 1922 and highlighted two conditions which would have to be satisfied before issuing a notice ....
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....d and you can do nothing". This Court opined that it would be a travesty of justice to allow an assessee such latitude. After adverting to various previous decisions, this Court held that an income tax officer acquires jurisdiction to reopen an assessment under Section 147(a) read with Section 148 of the Act only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons, which he must record, to believe that due to omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income tax has escaped assessment. In the above context, Supreme Court has held as under: 25. ...... He may start reassessment proceedings either because some fresh facts come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from th....
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.... from 01.04.1989 i.e. after substitution of Section 147 of the Act by the Direct Tax Laws (Amendment) Act, 1987. This Court considered the changes made in Section 147 and found that prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under two conditions i.e., (a) the Income Tax Officer had reason to believe that by reason of omission or failure on the part of the assessee to make a return under Section 139 for any assessment year or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax had escaped assessment for that year, or (b) notwithstanding that there was no such omission or failure on the part of the assessee, the Income Tax Officer had in consequence of information in his possession reason to believe that income chargeable to tax had escaped assessment for any assessment year. Fulfillment of the above two conditions alone conferred jurisdiction on the assessing officer to make a re-assessment. But with effect from 01.04.1989, the above two conditions have been given a goby in Section 147 and only one condition has remained, viz, that where the assessing officer has reason to believe that i....
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....ry powers in the assessing officer. 36. Elaborating further on the expression "change of opinion", this Court in Techspan India Private Limited (supra) observed that to check whether it is a case of change of opinion or not one would have to see its meaning in literal as well as legal terms. The expression "change of opinion" would imply formulation of opinion and then a change thereof. In terms of assessment proceedings, it means formulation of belief by the assessing officer resulting from what he thinks on a particular question. Therefore, before interfering with the proposed reopening of the assessment on the ground that the same is based only on a change of opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed reassessment proceedings." 13. In the present case, notice under Section 148 of the Act had been ....