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TMI Blog2012 (8) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the petitioner at Rs. 8,38,88,973. The assessment order originally framed is produced on record at annexure B to the petition. A bare perusal of the order suggests that the Assessing Officer had strenuously gone into the various aspects of the income of the petitioner company such as its turnover, its profits from various activities and its claim for deduction under section 80HHC. 3.2 By the impugned communication dated March 8, 2010, long after the scrutiny assessment was framed in the year 2006, the Assessing Officer sought to reopen the assessment on the following ground : "The assessee-company filed its return of income on November 1, 2004, declaring a total income of Rs. 3,17,30,999. The assessment was finalized under section 143(3) on December 29, 2006, deter- mining the total income at Rs. 8,38,88,973. On verification of the records, it is seen that the enhanced figure, i.e., profits of business Rs. 3,84,56,031 taken was not reduced while giving effect to the order of the Commissioner of Income-tax (Appeals) and the loss from trading goods was ignored for the purpose of calculation of deduction under section 80HHC. This resulted into underassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed assessment and that such escapement of assessment was on account of failure on the part of the assessee to file return under section 139 or in response to the notice issued under section 142(1) or under section 148 or to disclose fully and truly all material facts necessary for the assessment. Since, admittedly, the assessee had not failed to file the return, the question that needs to be considered in the present case is whether there was any escapement of income from assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. 5. In the recent judgment in the case of Dishman Pharmaceuticals and Chemicals Ltd. v. Deputy CIT (OSD) (No. 1) decided in Special Civil Application No. 15304 of 2010, vide judgment dated March 1, 2011, (since reported in [2012] 346 ITR 228 (Guj)) the aspects touching the powers of an Assessing Officer to reopen an assessment beyond four years of the end of the assessment year under section 147 of the Income-tax Act came to be considered. Referring to several judgments of the apex court and High Courts cited before the Bench the following observations were made (page 240) : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclose primary facts and it is not his duty to lead the Assessing Officer to any particular inference of fact or of law on the basis of such primary disclosures. In other words, once the assessee discharges his duty of stating all the primary facts, what inferences and conclusions should be drawn is the duty of the Assessing Officer ; (vii) at the time of ascertaining whether the notice was validly issued, what could be the probable conclusion of fresh assessment if reopening is permitted, is not the inquiry of the court. In other words, the merits of the proposed action, through opening of the assessment, cannot be gone into by the court beyond prima facie stage." 6. Bearing in mind the above legal principles, we are required to examine the contentions of both sides with reference to the facts on record. 7. Counsel for the petitioner contended that there was no concealment or failure on the part of the petitioner to fully and truly disclose all material facts for assessment of the income. He submitted that the return filed by the assessee was taken in scrutiny assessment by the Assessing Officer. After threadbare examination of all the aspects of the matter assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d figure of profits of business of Rs.3,84,56,031 taken was not reduced while giving effect to the order of the Commissioner of Income-tax (Appeals) and the loss from the trading goods was ignored for the purpose of calculation of deduction under section 80HHC, which resulted into underassessment to the extent of Rs.10,24,629. It is, thus, the case of the Revenue that in the assessment framed certain loss from trading goods was ignored for the purpose of calculation under section 80HHC. In the reasons recorded there is reference to giving effect to the order of the Commissioner of Income-tax (Appeals) but the same pertains only to a question of loss from trading goods, which was allegedly ignored. This is clear from the order passed by the Assessing Officer disposing of the objections of the assessee to the reopening of assessment in which it is stated as under : "As discussed above there are two issues on which reassessment are being made. The first issue is regarding excess deduction allowed under section 80HHC and the second issue is regarding deemed dividend in the hands of assessee-company. On the first issue the asses- see stated, vide order-sheet dated March 25, 2010 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... djusted total turnover 5. Calculation of deduction under section 80HHC(3)(c)(ii) in respect of export of trading goods is worked out as under : Export turnover in respect of trading goods - direct and indirect cost attributable. = 2,28,98,972 - 2,37,68,375 = (-) 8,69,403 = Indirect cost attributable to the export of trading goods -(-) 8,69,403 6. The above deduction is further increased as per the provisions to this sub-section which is worked out as under : 90% of export incentives X Export turnover = Nil Total tuenover of the business 7. The deduction in regard to sale made to export house is calculated as under : Deduction under section 80HHC(1A) read with section 80HHC(3A)(b) supporting manufacturer : Adjusted profits of business X Trrnover in respect of export house Total turnover of the business Thus, the total allowable deduction under section 80HHC is computed at 1,13,70,679 Allowable deduction = 30% x 1,13,70,679 = 34,11,203 Thus, the total allowable deduction under section 80HHC comes to be Rs. 34,11,203." Be that as it may, irrevocably, it stands established that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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