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TMI Blog2015 (8) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... rt under section 44AB of the Act. 2.02. That the case was selected for scrutiny assessment. That during the assessment it was found that the assessee did not make any adjustment as required under section 145A of the Act. 2.03. That during the assessment proceedings, the assessee was asked to explain as to why the adjustment as required under section 145A of the Act should not be made and added to the total income. 2.04. That from the original assessment order, it appears that in response to the same, the assessee vide its letter dated 20/12/2010 submitted its explanation that the assessee is following exclusive method of accounting but for the purpose of adjustment under section 145A of the Act and also enclosed details as required by the A.O. 2.05. The assessee also informed that the sale is inclusive of excise duty, whereas the purchase closing stock of rawmaterials, finished goods are excluding excise duty. That the A.O. did not accept the submissions made on behalf of the assessee and made addition of Rs. 28,94,837/- on account of adjustment under section 145A of the Act. It appears that feeling aggrieved and dissatisfied with the order passed by the A.O. making addition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee to disclose fully and truly all the material facts. 3.01. Mr.Hardik Vora, learned advocate appearing on behalf of the petitioner - assessee has further submitted that in the present case, as such there is/was no failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment. It is submitted that all the details were duly provided as and when sought and/or required by the Assessing Officer and the same was scrutinized by the Assessing Officer. It is submitted that therefore, now having allowed the claim, it is not open to the respondent - Assessing Officer to reopen the assessment, merely for the recomputation taking a different view on the same material available with him. 3.02. Mr.Hardik Vora, learned advocate appearing on behalf of the petitioner - assessee has further submitted that in the present case assessment for A.Y. 2008-2009 is sought to be reopened on the ground that the petitioner assessee has followed the exclusive method for accounting CENVAT as against inclusive method mandatory under section 145 of the Act and on the ground that in view of the provisions of section 145A of the Act, goods of raw-materials required adj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Case of Gujarat Lease Financing Limited Versus Deputy Commissioner of Income Tax, Circle-IV, Ahmedabad dated 24/6/2013 passed in Special Civil Application No. 3048 in support of his submissions that the initiation of the impugned reassessment proceedings are absolutely illegal and without jurisdiction. 4.00. Present petition is opposed by Mr.Sudhir Mehta, learned counsel appearing on behalf of the revenue. 4.01. An Affidavit-in-reply is filed on behalf of the respondent justifying the reopening of the assessment for the A.Y. 2008-2009, in exercise of powers under section 147 of the Income Tax Act. 4.02. Mr.Mehta, learned counsel appearing on behalf of the revenue has vehemently submitted that as it was found that the assessee adopted wrong method of valuation of closing stock, and thereby suppressed the income for the year under consideration, which is contrary to section 145A of the Act which clearly mandated that the valuation of the stock should be done by inclusive method, which means component of tax, cess, duty etc. should be included in addition to the cost of input and it was found that there was underassessment of Rs. 97,83,767/- and therefore, by recording the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period of four years from the end of the relevant assessment year would be without jurisdiction and bad in law. If all material facts are furnished by the assessee and there remained no omission or failure on the part of the assessee to disclose truly and fully all material facts, initiation of reassessment proceedings beyond the period of 4 years is not permissible and shall be wholly without jurisdiction. 5.02. Now, in the backdrop of the above legal provisions, challenge to the impugned reassessment proceedings are required to be considered. 5.03. In the present case, reassessment proceedings under section 147 of the Income Tax for the A.Y. 2008-2009 are initiated beyond the period of 4 years. The reasons recorded for reopening of the assessment for A.Y. 2008-2009, which are communicated to the petitioner - assessee vide communication dated 10/10/2014 are as follows :- "1. The assessee company is manufacturer of footwear items, filed its return of income for A.Y. 2008-09 on 26/9/2008 declaring total income at Rs. 5,18,74,783/-. The assessment u/s.143(3) of the I.T. Act was completed on 27/12/2010 determining total income at Rs. 5,58,24,910/-. 2. Scrutiny of the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchases whereas rate of excise duty leviable on finished goods is lover. Therefore, always remains the balance in CANVAT receivable A/c. Therefore CENVAT receivable is always higher than the liability of excise duty on finished goods. In view of the above facts no adjustments required to be made u/s. 145A." That thereafter, the A.O. did not accept the explanation submitted by the assessee and in fact, made addition of Rs. 28,94,837/- on account of adjustment under section 145A of the Act. The said addition came to be challenged by the assessee before the learned CIT(A) and the learned CIT(A) deleted the aforesaid addition of Rs. 28,94,837/- made by the A.O. on account of adjustment under section 145A of the I.T. Act. Under the circumstances, it cannot be said that there was any failure on the part of the assessee in disclosing the truly and fully all material facts necessary for adjustment. 5.05. Even otherwise, once the A.O. made addition on account of adjustment under section 145A of the I.T. Act and the same came to be deleted by the learned CIT(A), thereafter it is not open for the A.O. to reopen the assessment on the same ground. 5.06. Considering the aforesaid facts and cir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Ltd. (supra), has held thus: "10. It can be clearly noted from the reasons recorded that there is no mention at all of the assessee having not disclosed fully or truly material facts which were necessary for the purpose of computing the income of the assessee. Assuming that in the notice for reopening. such wordings are not specifically mentioned and they can be supplemented either while rejecting the objections or by way of affidavit of the Assessing Officer, then also, the revenue has failed to point out as to in what manner there has been non-disclosure on the part of the assessee." 27. From the ratio that can be culled out from all these decisions, it is amply clear that the Assessing Officer, who is authorized to issue notice under section 148 of the Act for reassessment. on his having a reason to believe that income chargeable to tax had escaped assessment for any assessment year, can assess or reassess such income and also any such other income chargeable to tax, which has escaped the assessment. However, no such action is permissible after lapse of 4 years from the end of the relevant assessment year unless income chargeable to tax has escaped assessment on account of f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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