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TMI Blog2014 (7) TMI 140X X X X Extracts X X X X X X X X Extracts X X X X ..... e at Rs. 9.57 Crores. This was so determined after having reduced the deduction under Section 80HHC of the Act to Rs. 10.67 Crores; (c) On 10th January 2005, the impugned notice under Section 148 of the Act was issued, seeking to re-open the assessment for the Assessment Year 1998-99. Thereafter on 28th January 2005, the reasons recorded for re-opening were furnished to the Petitioner. The reasons recorded at the time of issuing the impugned notice reads as under:- "Assessee has been allowed deduction u/s. 80HHC as under:- Trading profit Rs.5,29,09,932/- Profit from manufacturing Rs.7,00,54,773/- Deduction on incentives Rs.12,38,59,372/- Deduction allowed Rs.10,67,14,531/- When the deduction was allowed the judgment of Mangalya Trading and Investment Ltd (ITA 6354/Mum./98 dt. 23/4/2004) was not available at the time of completion of assessment u/s. 143(3). The decision of ITAT Mumbai has been endorsed by the Hon'ble High Court in the case of Rohan Dyes & Intermediates Ltd. v/s. CIT dated 9/8/2004. In view of these judgments the deduction u/s. 80-HHC would not available on the balance incentives, even where the 90% of the incentives exceeds the (Net) loss from the exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns as recorded for issuing the impugned notice dated 10th January 2005 does not mention any failure on the part of the Petitioner to fully and truly disclose all material facts necessary for assessment. Thus, in view of the decision of this Court in Hindustan Lever Ltd. v/s. R. B. Wadkar 268 ITR 332, the impugned notice is without jurisdiction; (ii) in any case, the reasons as recorded for issue of impugned notice dated 10th January 2005 do not indicate any failure on the part of the Petitioner to disclose fully and truly all material facts necessary for assessment. The aforesaid requirement is sine-qua-non for issue of a notice beyond a period of four years from the end of the relevant Assessment Year i.e. Assessment Year 1998-99 for reassessment; and (iii) the only basis for issuing the impugned notice dated 10th January 2005 as recorded in the reasons is subsequent decisions of Tribunal and Courts. It is a settled position in law that decisions rendered by Court subsequent to assessment orders do not by itself amounts to failure to fully and truly disclose all material facts necessary for assessment. In view of the above, it is submitted that the Petition be allowed. 5. As a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the Assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. Reasons are the manifestation of the mind of the Assessing Officer. The reasons recorded should be selfe-xplanatory and should not keep t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontext that observations of non-averment of failure to disclose all facts truly and fully were made. We are of the view that the words "failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment" is not a magician's mantra which alone would give jurisdiction to re-open an assessment. Just as it would not be open to the revenue to urge that the mere use of words 'failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment', the abscenee of the above words will not by itself oust the jurisdiction to reassess. We are of the view that if on reading of the reasons recorded as a whole implies/ points/ evidences a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, then the exercise of jurisdiction cannot be faulted. We, therefore, do not accept the submission that the absence of the words 'failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment' would make the issue of notice under Section 148 of the Act without jurisdiction. 9. However, in the facts of the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng with a Petition where notice was issued beyond a period of four years on the basis of the amendment in to Section 115(j)(b) of the Act with retrospective effect from 1st April 2001 has observed that " In view of the retrospective amendment of law by Parliament, the Assessing Officer may have reason to believe that income has escaped assessment. But that in itself is not sufficient for reopening an assessment beyond the period of four years. Beyond the period of four years when an assessment is sought to be reopened, there must be a failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment." In the above facts, this Court concluded that re-opening of an assessment beyond a period of four years from the end of the Assessment Year in the absence of any failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment would not give jurisdiction to issue notice under Section 148 of the Act. 12. Before parting, we may point out that the reliance placed by Mr. Suresh Kumar, learned Counsel appearing for the Revenue upon the decision of the Apex Court in the matter of A.L.A. Firm (supra) is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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