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TMI Blog2013 (7) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... e is no material on record to indicate any omission or failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment - neither of the two conditions precedent for exercise of powers u/s 147 after the expiry of a period of four years from the end of the relevant A.Y. is satisfied - the very assumption of jurisdiction on the part of the Assessing Officer is invalid – notice set aside – petition allowed in favour of assessee. - SPECIAL CIVIL APPLICATION No.278 of 2001 - - - Dated:- 1-4-2011 - MS. HARSHA DEVANI AND MS. BELA TRIVEDI, JJ. For the Petitioner: MR S.N. SOPARKAR For the Respondent: MRS MAUNA M BHATT JUDGMENT Ms. Harsha Devani J.-By this petition under article 226 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sumption of jurisdiction of the Assessing Officer, is invalid. Inviting attention to the reasons recorded, it was submitted that according to the Assessing Officer giving effect to the order of the Commissioner (Appeals) would amount to income escaping assessment, hence, the very basis for reopening the assessment itself is misconceived. Referring to the affidavit-in-reply filed by the respondent, it was submitted that the respondent has placed reliance upon the provisions of section 150 of the Act, which would not be applicable to the facts of the present case, inasmuch as to give effect to the order of the Commissioner (Appeals) it is not necessary to reopen the assessment, the Assessing Officer is only required to pass an order giving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld be required to be satisfied before the Assessing Officer can reopen the assessment, viz., that income chargeable to tax has escaped assessment and that such escapement is by reason of omission or failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment for that assessment year. However, according to the respondent, the first proviso to section 147 of the Act would not be attracted as this is a case which falls under section 150 of the Act whereby the assessment has been reopened to give effect to the order made by the Commissioner (Appeals). In the circumstances, the court is not required to examine as to whether or not the conditions precedent for exercise of powers under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing the deduction under section 32AB of the Act in excess of allowance of deduction under the said provision. The assessment was, therefore, reopened and an order under section 143(3) read with section 147 of the Act came to be passed to bring to tax the income that had escaped assessment on account of excess deduction under section 32AB of the Act. The addition made on this account amounted to Rs. 35,32,705 (2,54,28,435 2,16,95,730). The matter was carried in appeal before the Commissioner (Appeals) who confirmed the said addition holding that the deduction under section 32AB would be available at the prescribed rate of 20 per cent. of such reduced profit. At the time of giving effect to the order of the Commissioner (Appeals), the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If at all effect is given to the present order of the Commissioner of Income-tax (Appeals), i.e., deduction under section 80-I is granted on the above amount, it will tend to escapement to say an amount of (Rs. 1,90,89,590 x 20%) = 38,17,918 will escapement of assessment. In view of the above, I have reason to believe that the excess deduction under section 80-I of Rs. 38,17,918 is allowed. Therefore, notice under section 148 is issued". A plain reading of the aforesaid portion of the reasons recorded makes it evident that the assessment has not been reopened to give effect to the order of the Commissioner (Appeals), but because, according to the Assessing Officer, giving effect to the order made by the Commissioner (Appeals) will result ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on which the assessment is sought to be reopened is erroneous, it is not even the case of the respondent that the assessment is sought to be reopened on account of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for his assessment. Hence, the reopening of assessment is clearly time barred. In the light of the aforesaid discussion, in the opinion of this court the very formation of belief that income chargeable to tax has escaped assessment is fallacious and there is no material on the basis of which the Assessing Officer could have formed such a belief. Moreover, there is no material on record to indicate any omission or failure on the part of the petitioner to disclose fully and truly al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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