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TMI Blog2015 (7) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... rovision i.e. Section 115JB of the Act. In the course of submissions, even the Revenue accepted that there was no failure on the part of the appellant to disclose all material facts necessary for assessment. It is not permissible to the Revenue to draw inferences from the reasons recorded that all material facts, though fully disclosed, are not truly disclosed. Even otherwise, the Revenue was not able to show the facts, which have not been truly disclosed by the appellant, during the assessment proceedings.Accordingly, we find that the primary requirement for issuing the two impugned notices beyond period of 4 years, namely failure to disclose fully and truly all material facts necessary for assessment is not satisfied in the facts of both the impugned notices. Therefore, the impugned notices are without jurisdiction. - Decided in favour of assessee. - Writ Petitions No. 639 & 640 of 2011 - - - Dated:- 30-4-2015 - F. M. Reis And M. S. Sanklecha, JJ. For the Petitioner : Mr. Farrokh Irani with Ms. Priyanka Kamat, Adv For the Respondent : Ms. Asha Desai, Adv JUDGMENT ( Per M. S. Sanklecha, J. ) These petitions challenge two notices both dated 22/03/2011 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under Section 148 of the Act to the petitioner proposing to reopen the assessment for assessment year 2004-05. In support of the impugned notice, the reasons recorded for reopening, which are communicated to the petitioner, were as under : The assessee has filed return of income for the A.Y. 2004-05 on 29/10/2004 declaring NIL income under normal provisions of the IT Act and books profits of ₹ 4,08,06,697/- u/s 115JB of the IT Act. The assessee is carrying on the business of manufacturing and sale of plastic, collapsible tubes for dental and healthcare products. The assessment u/s 143(3) was completed on 07/12/2006 determining and the total taxable income at Rs.NIL after setting off carried forward business loss and depreciation loss, however the book profit were determine at ₹ 4,77,13,260/-. The assessee has stated in its notes on account which is annexed to P L account and balance sheet as under the useful life of certain Plant and Machinery has been re-estimated during the year and the written down value of these assets is being amortised over the remaining revised useful life, which has been subsequently ratified by the Board of Directors in their me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner were reduced, leading to escapement of income chargeable to tax on application of MAT under Section 115JB of the Act. The other two objectives of the petitioner, though adverted to, were not dealt with. 4. Both the petitions were admitted on 23/11/2011 and stay of proceedings was also granted. 5. Mr. F. Irani, learned Counsel appearing for the petitioner in support of the petition submits as under: (A) The impugned notices dated 22/03/2011 seeking to reopen the assessment for assessment year 2004-05 and 2005-06 are beyond the period of 4 years from the end of relevant assessment year. Thus, in terms of the first proviso to Section 147 of the Act the jurisdiction to issue notice only arises when there is failure on the part of the petitioners to disclose truly and fully all material facts necessary for assessment. In this case, all material fact necessary for assessment has been truly and fully disclosed. Thus, the impugned notices are without jurisdiction. (B) The reasons recorded in support of the impugned notices itself proceed on the basis of information disclosed by the petitioner in their profit and loss account and balance sheet filed as a part of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this case, the reasons recorded in support of the impugned notices do not allege any failure to disclose fully and truly all material facts, necessary for assessment. It is true, as held by this Court in Allanasans Ltd. Vs. Dy. CIT, 369 ITR 648 that the mere absence of the words 'failure to disclose' in the reasons by itself would not be fatal to the notice. However, if on reading of the reasons in support of the notice as a whole, do not indicate any failure to disclose fully and truly facts material to the assessment, then, the reopening notice is without jurisdiction. In this case, in fact, the reasons indicate that the basis of the impugned notice is the declaration made by the petitioner in its profit and loss account and its balance sheet read with its notes to the accounts. These clearly show that the petitioner had claimed higher depreciation in view of reestimation of the written down value of its assets over the remaining revised useful life. This information was available with the Assessing Officer at the time when he passed the assessment order dated 29/08/2011 under Section 143(3) of the Act. Thus, the reasons ex-facie do not even remotely suggest that there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true facts were suppressed in the form of suppresso veri. We find no such indication in the reasons recorded in support of the impugned notice. We are not able to understand how inference of disclosing falsely material facts can be drawn from the reasons recorded. 11. In any case, this Court in Hindustan Lever Ltd. V/s. R.B. Wadkar, Assistant Commissioner of Income Tax reported in (2004) 268 ITR 332 has held as follows :- The reasons recorded by the Assessing 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 ma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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