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TMI Blog2013 (12) TMI 1318X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year 1997-98, on the questions of law for consideration by this Court as follows:- "(i). Whether the Hon'ble ITAT was justifiable in law in annulling the assessment. (ii) Whether the Hon'ble ITAT was justifiable in law in holding that the material fact was on record and the assessment could not be re-opened after lapse of four year from the end of the relevant asstt. year." 3.Brief facts, giving rise to this appeal, are that a return of income was filed by the respondent-assessee company under Section 139 (1) of the Act on 29.8.2007, disclosing income of Rs. 3, 42, 36, 480/-. The assessee claimed deduction under Section 80HHC of the Act of Rs.92,44, 415/- and under Section 80IA of Rs. 2, 53, 62, 614/-. A report in form No. 10CCB was f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prescribed period. He, however, considered the non-est return as the information for re-opening the assessment and issued notice under Section 148 on 4.7.2002, after obtaining approval of Commissioner of Income Tax. The re-assessment order was passed on 22.1.2003 on total income of Rs. 4, 75, 29, 000/-. 7. In the appeal filed by the respondent-assessee the Commissioner of Income Tax (Appeals)-I, Kanpur by his order dated 29.11.2004 confirmed the order so far as deducting the loss of export trading activity from the profits of the self-manufactured goods to work out the deduction under Section 80HHC, and the deductions of duty draw back, as well as sale of export entitlements from the profits for the purpose of calculating the deduction u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 147, which is dependent for this invocation, on failure on the part of the assessee either to file return or to fully and truly disclose all material facts necessary for assessment. The AO having applied his mind and actually reduced the assess's claim under Sections 80HHC and 80IA, clearly omitted to correctly apply the explanation (baa) for which the notice under Section 148 could not be issued after four years. 9. The ITAT held that the reassessment notice under Section 148 was illegal in view of the proviso to Section 147 and therefore, the assessment made in pursuance to the said notice was annulled. The appeal was consequently allowed. 10. Shri Dhananjai Awasthi appearing for the revenue submits that while computing the deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garwal vs. ACIT (1996) 87 Taxman 306 in submitting that the powers to re-open assessment under Section 147 is very wide and can be exercised even if the assessee had disclosed fully and truly all the material facts. He has also relied upon Consolidated Photo & Finvest Ltd vs. ACIT 281 ITR 394 and IPCA Laboratory Ltd vs. DCIT 251 ITR 401 (Bombay), in support of his submissions. 13. Shri Ashish Bansal, learned counsel appearing for the respondent-assessee submits that the schedules are part of the balance sheet. The AO had himself reduced the amount under Section 80HHC and 80IA, and thus he committed an error in applying the Explanation (baa) while considering deductions under Section 80HHC and 80IA. The notice could not be issued under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point of finality in all legal proceedings. The issues, which have become stale, should not be reactivated beyond a particular stage. The lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies, as it must in other spheres of human activity. The income-tax assessment orders cannot be reopened on the score of income escaping assessment under section 147 of the Act of 1961, after the expiry of four years from the end of the assessment year unless there be omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. 17. In the present case the AO examined respondent-assessee's claim under Section 80HHC and 80IA and had allowed the deductions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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