TaxTMI 
TaxTMI 
2023 (9) TMI 1729
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....d order reads as under: "2.2 The reply of the assessee has been perused and considered but found not tenable. In this case, though the assessment proceedings u/s 143(3) was completed, however, perusal of assessment order reveals that the issue was not examined by the Assessing Officer. Further, the assessee in its reply categorically accepted that the credit note amounting to Rs. 6,54,75,440/- was reduced from the invoice value for the financial year under consideration, However, the net effect of credit note amounting to Rs. 11,96,04,791/- i.e. totalling of Rs. 5,41,29,351/- and Rs. 6,54,75,440/-, was reduced from the invoice value of A. Y. 2013-14 itself and the details pertaining to that A.Y. was not before the Assessing Officer for examination. Therefore, neither the original return nor the revised return of A.Y. 2013-14 was examined by the Assessing Officer during the scrutiny proceeding of A.Y. 2014-15. During the assessment proceedings of A.Y. 2014-15 which is the assessment year under consideration the issue was neither examined by the AO nor this information was available with the AO that the credit note amounting to Rs. 6,54,75,440/-, has been reduced by the asse....
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....148 was that the Assessing Officer should have reason to believe that the income has escaped assessment. 5. In view of the above discussion and the judicial pronouncements, the objections raised by the assessee have been considered viz a viz the provisions of section 147 as reproduced above. In view of the unambiguous meaning of section 147 and the facts and circumstances of the case under which the reasons were recorded, the objections of the assessee against re-opening of assessment are not acceptable. It may be seen that while re-opening the assessment, proper procedure as per Income-tax law has been followed by the Assessing Officer. The case has been re-opened well within the time limit prescribed as per the provisions of the Income-tax Act, 1961 and also on account of the fact that there was reason to believe that the income chargeable to tax has escaped assessment. 6. Since this order has been passed covering all the objections raised by the assessee, all the ground/contentions/ objections taken by the assessee in this regard may be treated as "disposed off". In view of the facts discussed above, the assessee's request to drop the proceedings initiated ....
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....2013 for the assessment year 2013-14 is reproduced below: Schedule BP Computation of income from business or profession A 23 Any other income not included in profit and loss account/any other expense not allowable (including income from salary, commission, bonus and interest from firm in which company is a partner) 23 65475440 8. For the assessment year 2014-2015, the petitioner filed regular return of income on 29.11.2014. In the returns filed by the petitioner for the assessment year 2014-2015 (for the relevant financial year 2013-2014), the petitioner thus deducted a sum of Rs. 6,54,75,440/-. 9. The aforesaid deduction has been made towards any other amount allowable as deduction. In Sl.No.31 under the Schedule BP for computation of income from business or profession reads as under: Schedule BP Computation of income from business or profession A 31 Any other amount allowable as deduction 31 65475440 10. The matter went up to the Dispute Resolution Panel, pursuant to which the assessment was completed on 17.10.2018 under Section 143(3) r/w Section 92CA(4) r/w Section 144C of the Ac....
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.... dated 30.10.2017, this amount was treated as non-operating profit and not considered for transfer pricing addition. Hence, deduction of the amount of Rs. 6,54,75,440/- requires dis allowance and needs to be brought to tax. Hence, I have reason to believe that income has escaped assessment." 13. It is the case of the petitioner that there is no case made out for income escaping assessment and therefore, invocation of Section 148 of the Act on 30.03.2021 was unjustified. It is stated that during the previous year relevant to the AY 2014-2015, the petitioner filed its original return of income returning a total income of Rs. 21,06,88,820/-. The petitioner states that in the said return of income for the impugned AY 2014-2015, the petitioner had correctly claimed a sum of Rs. 6,56,75,440/- as deduction. 14. It is further stated that the petitioner has reversed the amount in the respective assessment years (i.e,) 2013-2014 and 2014-2015, pursuant to the permission granted by the Authorized Dealer on 26.12.2013. It is the contention of the petitioner that the impugned order has been passed without considering the petitioner's objection against re-opening of the assess....
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....al Board of Direct Taxes ("CBDT"), wherein the CBDT had clarified that mere change of opinion cannot constitute reason to believe so as to justify re-opening of an assessment proceeding. 19. It is further submitted that the impugned order disposing off the petitioner's objection is contrary to the principles laid down by this Court in Fenner (India) Ltd., Vs. Deputy Commissioner of Income Tax, (1999) 107 TAXMAN 53 and Schwing Stetter India P.Ltd., 378 ITR 380. 20. Per contra, the learned Senior Standing Counsel for the respondents on instructions submit that the impunged order is well reasoned and requires no interference. 21. The learned Senior Standing Counsel for respondents has drawn attention to the returns filed by the petitioner for the assessment year 2014-2015 on 29.11.2014. 22. I have examined the Return of Income filed by the petitioner for the Assessment Year 2013-2014 on 27.11.2013 and the revised Return of Income filed by the petitioner for the same Assessment Year on 15.12.2014 after a letter was issued by the Authorised Dealer to the petitioner on 26.12.2013. I have also perused the Return of Income filed by the petitioner for the Assessment Year 201....
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..... 6,54,75,440/- from the income for the subsequent Assessment Year 2014-2015. The petitioner was thus entitled to claim deduction in the revised Returns filed for the Assessment Year 2013-2014 on 15.12.2014. 28. In the Financial Statement dated 18.09.2014, for the Financial Year 2013-2014, in the Balance Sheet, Profit and Loss Account, Cash Flow Statement and Notes to Financial Statement for year ended March 31, 2014, the petitioner has however claimed deduction twice. A reading of the Notes to the Financial Statement for the year ended 31.03.2014, indicates that the petitioner had already reduced a sum of Rs. 6,57,63,274/- from Rs. 11,96,04,791/- the total export sales till March 31, 2014 to arrive at net export sales as Rs. 1,03,79,74,577/- and filed a return on 29.11.2014. 29. Sl. Nos. 13 & 14 to the Notes to Financial Statements for the year ended 31.0.2014 refers to Note 33. Releant information in Sl.Nos. 13 & 14 along with Note 33 are reproduced below :- 13. Revenue from operation 14. Other income Sale of products Export sales* March 31, 2014 1037974517 Interest income - Others March 31, 2014 7,225 Domestic Sales 18,642,590 Exchange difference....
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....e petitioner has thus availed the deduction twice in the same Assessment Year once while net computing export sales in the Notes to Financial Statement dated 18.09.2014 and again in Sl.No. 31 under the head "Computation of Income" from business or profession. Thus, the Regular Returns of Income filed for the assessment year 2014-15 on 29.11.2014 contained incorrect particulars for computation of income. 34. The reasons given by the respondents for reopening the assessment for the year 2014-15, that a sum of Rs. 6,54,75,440/- had already been deducted against the sale income for the Assessment Year 2014-2015 merits consideration. 35. The above Notes of the petitioner gives a confusing picture and was intended to mislead the Assessing Officer. The petitioner had already deducted a sum of Rs. 6,57,63,274/- to arrive at the net export sales value of 1,03,79,74,517/-. and again for a sum of Rs. 6,54,75,440/-. In the original returns dated 29.11.2014 for the assessment year 2014-15, the petitioner has declared a sale of products/goods under the category Sale/Gross receipts of business (net of returns and refunds and duty or tax, if any) as Rs. 1,05,66,17,107/- which is the total of....
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....n the part of an assessee to make a return of his income under Section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income- tax have escaped assessment for that year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income tax have escaped assessment for any year, or have been under- assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed. he may in cases falling under Clause (a) at any time within eight years and in cases falling under clause (b) at any time within four years of the end of that year, serve on the assessee, or, if the assessee is a company, on t....
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....o the matter but the fact that he did not make any further enquiry does not take the case out of Section 34(1)(a) particularly when the assessee had failed to place truly and fully all the material facts before him. 43. Dealing with issue, Hon'ble Mr. Justice Das Gupta, explained the position in Paragraph Nos. 9 to 12. They are extracted as under :- 9. There can be no doubt that the duty of disclosing all the primary facts relevant to the decision of the question before the assessing authority lies on the assessee. To meet a possible contention that when some account books or other evidence has been produced, there is no duty on the assessee to disclose further facts, which on due diligence, the Income Tax Officer might have discovered, the legislature has put in the Explanation, which has been set out above. In view of the Explanation, it will not be open to the assessee to say, for example - "I have produced the account books and the documents : You, the assessing officer examine them, and find out the facts necessary for your purpose : My duty is done with disclosing these account-books and the documents". His omission to bring to the assessing authority's at....
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.... facts actually disclosed. The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose "inferences" to draw the proper inferences being the duty imposed on the Income Tax Officer. 13. We have therefore come to the conclusion that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this . 44. Although materials were disclosed during the course of assessment, the prima facie fact reveals that the deduction was wrongly claimed twice in the primary material and contains incorrect particulars. Since there was no proper declaration of Income in the Return of Income filed on 29.11.2014 by the petitioner, the observation of the Hon'ble Supreme Court in Calcutta Discount Co. Ltd. v. ITO, (1961) 41 ITR 191 (SC), in para 9 is relevant. It was held that in view of the Explanation to Section 34 of the Income Tax Act, 1922, it will not be open to the assessee to say, - "I have produced the account books and the documents : You, the assessing officer examine them, and find out the facts necessary for your purpose : My duty is done with disclosing these account- books and ....