9911796707
TMI Blog2014 (12) TMI 1113X X X X Extracts X X X X X X X X Extracts X X X X ..... in view of Section 80A of the Act; (b) An enquiry was made during assessment proceedings inter alia in respect of Petitioner's claim for benefit of deduction under Section 80HHC of the Act. Thereafter, assessment order dated 23rd March, 1999 was passed under Section 143(3) of the Act. The order dated 23rd March, 1999 restricted the Petitioner's claim for deduction under Section 80HHC of the Act to Rs. 9.66 Crores i.e. gross total income while assessing the Petitioner to taxable income of Rs. 1050/; (c) Being aggrieved by order dated 23rd March, 1999 the Petitioner had preferred an appeal to Commissioner of Income Tax (Appeals) (CIT[A]) in respect of claim for deduction under Section 80 HHC of the Act. The CIT[A] by order dated 9th July, 1999 allowed the appeal; (d) On 24th January, 2003, the impugned notice was issued. The reasons in support of the impugned notice reads as under: "The assessee company is engaged in manufacturing of pharmaceuticals and sale in domestic market as well as export of pharmaceutics and engineering items. The return of income for assessment year 1996-97 was filed by the assessee on 30.11.1996 declaring income of Rs. 1050/-. This returned incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in support of the Petition submits as under: (a) The impugned notice having been issued beyond a period for four years from the end of the relevant Assessment Year is without jurisdiction as there has been no failure on the part of the Petitioner to disclose fully and truly all material facts necessary for the assessment as is evident from : (i) Its Return of Income was accompanied with Computation of Income and a certificate in Form 10CCAC by an independent Accountant in respect of deduction claimed under Section 80HHC of the Act - wherein the claim for deduction of Rs. 13.98 Crores and the basis for the same was tabulated and certified to be correct; (ii) The nonsetting off of losses of Rs. 31 lakhs in respect of export of manufactured goods was made clear in the computation of Income ; and (iii) During Assessment proceedings, the Assessing Officer had enquired into the claim for deduction under Section 80HHC of the Act and the same was considered while passing of an Assessment Order dated 23rd March, 1999 in regular assessment proceedings. (b) Reliance was placed upon the decision of this Court in Petitioner's own case in Ajanta Pharma Ltd., v/s. ACIT (267) ITR 200 whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Assessing Officer with jurisdiction to reopen an assessment are reason to believe that income chargeable to tax has escaped assessment (a mere change of opinion would not be reason to believe). An additional jurisdictional condition for reopening of an assessment beyond a period of four years from the end of the relevant assessment year is the failure to truly and fully disclose all material facts necessary for assessment. 6. In this case, admittedly the impugned notice has been issued beyond a period of four years from the end of the relevant Assessment Year. Therefore, we shall first examine the primary contention raised by the Petitioner - that there is no failure on its part to disclose truly and fully all material facts necessary for assessment. The reasons in support of the impugned notice as reproduced hereinabove are the following : (i) On perusal of the record, it is noticed from the record filed by the Petitioner that the assessee had claimed higher profit on export of trading goods with reference to the ratio of trading export turnover to the total turnover; (ii) The Petitioner did not file invoicewise details of purchases of trading goods exported and did not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e do not read the above as an indication of failure to supply invoices being the basis for reopening of assessment. This is a gloss added to the reasons by the Revenue at the hearing. Therefore, it is not accepted. Further, reliance is placed upon the affidavit in reply to submit that the invoices were not submitted. First of all, it is a settled position accepted by this Court on numerous occasions that the reasons for re-opening cannot be supplemented by affidavits. The reasons have to be read as they are and cannot be improved upon by filing affidavits. Thus, the reliance upon the affidavit is not acceptable. Besides, in any event, the same objection on the basis of affidavit and identically word was taken in reply affidavit by the Revenue in Ajanta Pharma Ltd. (supra) while dealing with the challenge to reopening for assessment for Assessment Years 1998-99, 1999-2000 and 2000-01 and this Court rejected the affidavit in following terms: "A bare reading of the reasons in support of the notice disclose that the conclusion regarding escapement of the income was on the basis that nondisclosure of the invoicewise details of purchases of trading goods exported and the failure to core ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... viso to Section 147 of the Act. It may be pointed out that the Assessing Officer in the Assessment Order dated 23rd March, 1999 has himself ignored the set off on account of loss on manufactured exports as that was the prevailing understanding. In fact, it was only later that in the case of IPCA Laboratories v/s. Deputy Commissioner of Income Tax 2001 (251) ITR 401 this Court took a view that the loss in any of the two segments has to be set off against the other for the purpose of determining the deduction available under Section 80HHC of the Act. The aforesaid view is upheld by the Supreme Court in IPCA Laboratories v/s. Deputy Commissioner of Income Tax 266 ITR 521 . These decisions in no manner impact the true and full disclosure of all material facts necessary for assessment. 9. Before closing, the other objection taken by Mr. Pinto is that in letter dated 18th February, 1999 the Petitioner had stated that they do not keep different sets of accounts for manufacturing and trading activities. This was done prior to passing of Assessment Order dated 23rd March, 1999 under Section 143 (3) of the Act. We are not able to understand how the above disclosure would lead to an in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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