2010 (5) TMI 709 - AT - Income Tax

Summary

Issues Involved:
1. Jurisdiction of the Assessing Officer to initiate reassessment proceedings u/s 147 after the expiry of four years.
2. Validity of reassessment proceedings initiated u/s 147.
3. Computation of deduction u/s 80HHC and u/s 80-IB.

Summary:

1. Jurisdiction of the Assessing Officer to initiate reassessment proceedings u/s 147 after the expiry of four years:
The assessee challenged the initiation of reassessment proceedings u/s 147 after the expiry of four years from the end of the relevant assessment year. The original return was filed on November 28, 2000, and the original assessment was completed u/s 143(3) on March 27, 2003. The reassessment notice u/s 148 was issued on March 7, 2006. The Tribunal found that the Assessing Officer did not point out any material fact that came to his notice subsequently, which was not disclosed by the assessee during the original assessment proceedings. The Tribunal held that the initiation of reassessment proceedings u/s 147 was invalid as it was beyond the four-year period and without satisfying the conditions mentioned in the proviso to section 147.

2. Validity of reassessment proceedings initiated u/s 147:
The Tribunal observed that the Assessing Officer issued the notice u/s 148 based on the details available in the return of income and annexure thereto filed by the assessee. The Tribunal noted that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The Tribunal referred to the decision of the Delhi High Court in Haryana Acrylic Manufacturing Co. Ltd. v. CIT [2009] 308 ITR 38 (Delhi), which held that in the absence of an allegation that the escapement of income occurred due to the assessee's failure to disclose fully and truly all material facts, any action taken u/s 147 beyond the four-year period would be without jurisdiction. Consequently, the Tribunal held that the reassessment proceedings initiated by the Assessing Officer were invalid and without jurisdiction.

3. Computation of deduction u/s 80HHC and u/s 80-IB:
In light of the Tribunal's decision on the jurisdictional issue, the other grounds of appeal regarding the computation of deduction u/s 80HHC and the ground raised by the Revenue regarding the computation of deduction u/s 80HHC vis-a-vis u/s 80-IB became redundant and were dismissed as infructuous.

Conclusion:
The appeal filed by the assessee was partly allowed, and the appeal filed by the Revenue was dismissed. The reassessment order made u/s 143(3)/147 dated December 15, 2006, was declared invalid and without jurisdiction.