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TMI Blog2012 (9) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... n this appeal. - I.T.A. No. 129/Mds/2012 - - - Dated:- 25-6-2012 - SHRI ABRAHAM P. GEORGE, AND SHRI VIKAS AWASTHY, JJ. Appellant by : Shri Philip George, Advocate Respondent by : Shri Vikramaditya, JCIT O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : In this appeal filed by the assessee, its grievance is that CIT(Appeals) upheld the reopening of assessment under Section 148 of Income-tax Act, 1961 (in short 'the Act'), after four years from the end of the impugned assessment year, without showing that assessee had any way violated first proviso to Section 147 of the Act. 2. Short facts apropos are that assessee, engaged in the manufacture and export of leather and shoe uppers, filed its return of income originally on 28.11.2003 for the impugned assessment year. Initially it was processed under Section 143(1) of the Act. Later there was scrutiny proceeding and assessment was completed on 23.2.2005 under Section 143(3) of the Act. In such assessment, assessee was given deduction under Sections 80HHC and 80-IB of the Act Rs. 45,59,465/- and Rs. 27,35,679/- respectively. Thereafter, assessment was reopened under Section 147 of the Act for a reason th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court was always in existence. Relying on the decision of Hon ble Rajasthan High Court in the case of Chandiram v. ITO (225 ITR 611), CIT(Appeals) was of the opinion that the reopening was justitified. Further according to CIT(Appeals), when even for a rectification under Section 154 of the Act, a declaration of law by Hon ble Apex Court was good reason, then for a reopening it was all the more a better reason. Reliance was placed on the decision of Hon ble jurisdictional High Court in the case of South India Electric Supply Corporation Ltd. v. ITO (74 ITR 383) and on the decision of Hon ble Supreme Court in the case of S.A.L. Narayana Row, CIT v. Model Mills Nagpur Ltd.(1967) 64 ITR 67. CIT(Appeals) further noted that Hon ble Punjab and Haryana High Court in the case of Jawand Sons v. CIT (326 ITR 39), had on similar facts held that reopening was justified. He thus upheld the reopening done by the A.O. 5. Now before us, learned A.R. submitted that admittedly, the reopening was resorted to after the expiry of four years from the end of the relevant assessment year. There is no case for the Revenue that there was any failure on the part of the assessee to disclose fully ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has 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: There can be no opening of re-assessment after expiry of four years from the end of an assessment year unless there was certain types of failures on the part of the assessee. The failures listed are failure to file return of income under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel for the appellant-assessee argued that initiation of the reassessment proceedings was not in consonance with the requirement of sections 147 and 148 of the Act. Learned counsel argued that the Assessing Officer was not justified in reopening the assessment, merely on the basis of change of opinion, and while framing the opinion that some income chargeable to tax has escaped assessment on account of non-disclosure of fully and truly of all material facts necessary for assessment for the relevant assessment year. Therefore, he submitted that as far as the assessee is concerned, he has fully disclosed all the material facts necessary for assessment. The audit report as well as the accounts were shown and in no way, it can be said that the assessee had not disclosed the relevant facts. Thus, the initiation of proceedings of reassessment itself was bad and the orders passed in the said proceedings are liable to be set aside. Learned counsel argued that while taking the wrong interpretation of the proviso to section 147 of the Act, the Income-tax Appellate Tribunal has wrongly come to the conclusion that the reassessment proceedings were rightly initiated, whereas, the Revenue has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r evidence from which material evidence could with due diligence be gathered, would not amount to disclosure within the meaning of proviso. As against this, in the given case, we do not find any failure of the assessee of the type mentioned interest the proviso. In the case of Chandiram (supra), Hon ble Rajasthan High Court was examining whether pronouncement of law by the Hon ble Apex Court would amount to information under Section 147(b) of the Act, as it stood then. Here, on the other hand, re-assessment was not initiated under Section 147(b) of the Act for a reason that the said section stood substituted by Direct Tax Laws (Amendment) Act, 1987 with effect from 1.4.89. No doubt, an exposition of law by Hon ble Apex Court would declare the law as it stood all the time and could be a basis for rectification proceedings under Section 154 of the Act. But, in our opinion, it cannot be a basis for resorting to a reopening where such reopening is done after the expiry of four years from the end of relevant previous year unless and until there is any failure on the part of the assessee. We are thus of the opinion that the assessee has to succeed in this appeal. 9. Since we have allow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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