9911796707
TMI Blog2015 (7) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... mount indicated therein. Consequently the decision rendered in any one of the two petitions would equally apply to the other. In view of the above, for the sake of convenience we refer to the facts set out in Writ Petition No.640/2011 dealing with the assessment year 2004-05. 3. Briefly the facts leading to this petition are as under: (a) The petitioner is engaged in manufacture and sale of plastic and laminated collapsible tubes for dental and healthcare products. For the assessment year 2004-05, the petitioner on the basis of technical evaluation re-estimated the useful life of certain plant and machinery. In view of the above, the petitioner claimed enhanced depreciation of Rs. 5.03 crores. This was in accordance with accounting standards and the enhancement of depreciation was taken into account for arriving at its book profits in accordance with the provisions of the Companies Act. The same was subjected to audit by the statutory auditors and audited accounts were also approved by the general body of share holders at its annual general meeting. (b) On the basis of the above, the petitioner filed on 29/10/2004 its return of income for the subject assessment year. In its retu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computing income under section 115JB in order to bring to tax, the actual book profits of the business. Failure to do so has resulted into under assessment of income of Rs. 5,03,67,000/- and short levy of taxes is Rs. 38,71,963/-." (e) The petitioner by letter dated 22/08/2011 filed its detailed objection to the reasons recorded in support of the impugned notice. In particular, the petitioner pointed out that the impugned notice being beyond the period of 4 years from the end of the relevant assessment year was without jurisdiction as there was no failure to disclose all material facts necessary for assessment. Besides, it was also contended that in any event, the proposed reopening is only on the basis of a change of opinion and the reasons recorded for reopening are contrary to the provisions of Section 115JB of the Act. In particular, the petitioner in its objections pointed out that all facts and materials relevant for assessment were disclosed by the petitioners in its return of income as is evident from the reasons recorded in support of the impugned notice itself. It is for this reason that the reason recorded do not even allege any failure on the part of the petitioner to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eturn of income. However, the requirement under the Act for ousting the jurisdiction of the Assessing Officer in case of notices issued beyond period of 4 years is there must have been no failure to fully and truly disclose all material facts necessary for assessment. It is submitted that in view of the excess depreciation taken by the petitioner, it had failed to truly disclose all material facts necessary for assessment. Thus, the notice is within jurisdiction of the Assessing Officer; and (B) The impugned notice calls for no interference in view of the reasons set out in the order dated 29/08/2011 disposing of the petitioner's objections to the reasons recorded. 7. We have considered the rival submissions. It is an admitted position that both the impugned notices dated 22/03/2011 seeking to reopen the assessment for assessment year 2004-05 and 2005-06 have been issued beyond the period of 4 years from the end of the relevant assessment year. It is a settled position that in cases where the assessment sought to be reopened is beyond the period of 4 years from the end of the assessment year, the jurisdictional requirement for issuing a notice under Section 148 of the Act is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue that the obligation under the proviso to Section 147(1) of the Act is not only to disclose all material facts, but also disclose it truly. The word 'truly' would necessary imply that either the assessee has declared falsely or has practiced 'suppresso veri suggesto falsi'. The reason recorded for reopening of assessment do not even whisper that there has been any false declaration made by the petitioner. The reliance by the respondents - Revenue that reopening notice is sustainable in view of the fact that as a result of claiming higher depreciation (which is admittedly disclosed) the book profits were reduced resulting in lower tax under Section 115JB of the Act. This claiming of a particular amount as a depreciation whether eligible or not is completely different from not disclosing fully and truly material facts necessary for assessment. 10. In view of the above facts, we specifically asked Ms. Desai, the learned Counsel for the Revenue to tell us what facts were not truly disclosed by the appellant and also where do the reasons recorded in support of the impugned notice dated 22/03/2011 so indicate. The respondent- Revenue contended that on reading of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or making an oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches the court, on the strength of the affidavit or oral submissions advanced." (emphasis supplied) In view of the above, 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. 12. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
