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TMI Blog2021 (12) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... he reasons, in fact shows that the conclusion have been drawn from the case record of assessee itself. The entire reasons proceeds on the basis of perusal of details and on perusal of records . It also says that the assessee has wrongly claimed certain amounts as deducted taxable income which has been accepted by the Assessing Officer. Excess deduction u/s 33AC in respect of the dividend income - Scope of amendment - Deduction under Section 33 AC of the Act as it stood in the relevant year was to be allowed on the basis of total income. The Finance Act, 1995, amended the said provisions with effect from 1st April, 1996 to provide that the deduction is to be allowed at 50% of the profits derived from the business of operation of ships (computed under the head Profits and gains of business or profession before making a deduction under that section). The deduction prior to the amendment was available to the extent of the total income provided the amount was credited to reserve account and was utilised for the purchase of a new ship within the specified period. The circular further goes to state that it was noticed that shipping companies had diversified into other activ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Petitioner also explained that this position in law was amply clear because Section 33AC of the Act has been amended with effect from 1st April, 1996 to restrict deduction to 50% of the income derived from the business of operation of ships only which takes out the purview of deduction of any income arrived from the business other than shipping business or from the sources other than shipping business. Petitioner explained that the amendment will not apply to the Assessment Year in question being 1994-95 and will apply only to Assessment Year 1996 and subsequent years because the amendment which has been clarified will take effect only from 1st April, 1996. 3. Petitioner thereafter received a notice dated 30th November, 2000 under Section 148 of the Act which is impugned in this petition. Immediately on receipt of notice petitioner addressed a communication to respondent calling upon respondent to furnish the reasons recorded prior to issue of notice under Section 148 of the Act. That was not provided and immediately petitioner approached this court by way of this petition. 4. This court by an order dated 18th December, 2001 issued Rule and granted interim relief. Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of GKN Driveshafts (India) Ltd. vs. ITO [2003] 259 ITR 19 and as that has not been done in this case, petition should be rejected. 8. In rejoinder, Mr. Pardiwalla relying upon a judgment of Division Bench of this Court in Caprihans India Ltd. vs. Tarun Seem, Deputy Commissioner of Income-tax [2003] 132 Taxman 123 (Bombay) submitted that there is no hard and fast rule that the assessee should first file its return pursuant to the notice under Section 148 of the Act, more so when the reasons do not disclose on the face of it any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The court should certainly entertain the petition and set aside the notice. Mr. Pardiwalla also submitted that notwithstanding petitioner not filing return in response to notice under Section 148 of the Act, the court in its wisdom thought it fit to issue rule and also grant interim relief on 18th December, 2001. 9. We would agree with the submissions made by Mr. Pardiwalla and we are not inclined to dismiss the petition. In fact, the Division Bench of this court in Commissioner of Income-Tax vs. Trend Electronics [2015] 379 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer, on the face of it, does not indicate any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. It is settled law that in view of the proviso to Section 147 of the Act no action for re-opening after four years could be taken unless the Assessing Officer has reason to believe that income has escaped assessment by reason to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Admittedly, the period of four years has expired. As noted above, even the reasons do not disclose any finding that petitioner had failed to disclose fully and truly all material facts necessary for assessment. The reasons, in fact shows that the conclusion have been drawn from the case record of assessee itself. The entire reasons proceeds on the basis of perusal of details and on perusal of records . It also says that the assessee has wrongly claimed certain amounts as deducted taxable income which has been accepted by the Assessing Officer. 10. Petitioner had claimed deduction under Section 33AC of the Act in the sum of ₹ 1,05,87,89,309/-. The Assessing Officer had rightly allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns with effect from 1st April, 1996 to provide that the deduction is to be allowed at 50% of the profits derived from the business of operation of ships (computed under the head Profits and gains of business or profession before making a deduction under that section). This subsequent amendment made to the section clearly reflects that prior to the amendment the deduction was to be allowed on the basis of total income and not on the basis of income chargeable to tax under the head Profits and gains of business or profession . No doubt this matter has also been set to rest by Circular No.717 issued by the Central Board of Direct Taxes wherein the Board explained the provisions of the amendment made to Section 33AC of the Act. It is clearly stated therein that the deduction prior to the amendment was available to the extent of the total income provided the amount was credited to reserve account and was utilised for the purchase of a new ship within the specified period. The circular further goes to state that it was noticed that shipping companies had diversified into other activities and are claiming deduction under Section 33AC of the Act even in respect of their income for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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