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TMI Blog2024 (10) TMI 537X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the assessee has escaped assessment. The assessee has disclosed fully or truly all material facts necessary for assessment. The notice issued by the AO is not valid notice. The assessment made by AO is liable to be set aside. We find, from the above discussion, that the AO has wrongly made the assessment u/s 148 of the Act, therefore, addition made by AO and confirmed by the Ld. CIT(A) is here by deleted - Decided in favour of assessee. - Sh. S. Rifaur Rahman, Accountant Member And Sh. Sudhir Kumar, Judicial Member For the Appellants : Sh. Ved Jain, Advocate, Ms. Uma Upadhyay, CA For the Respondent : Ms. Shashi Kajle, Sr. DR ORDER PER SUDHIR KUMAR, JM: This appeal by the assessee is directed against the order of the National Faceless appeal center Commissioner of Income Tax (Appeals), Delhi, [hereinafter referred to as CIT(A) ], vide order dated 12.01.2024 pertaining to A.Y. 2009-10 and arises out of the order dated 07-09-2016 passed by the Assessing Officer under Section 147 of the Income Tax Act, 1961 [hereinafter referred as the Act ]. 2. The assessee has raised the following grounds of appeal :- 1. On the facts and circumstances of the case, the order passed by the lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the fact that the reassessment proceedings initiated by the learned AO without obtaining valid approval of the prescribed authority as per section 151 of the Act is bad in law and liable to be quashed. 8. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred, both on facts and in law, in rejecting the contention as the same has been issued beyond the time-limit prescribed under the Act. 9(i). On the facts and circumstances of the case, the learned CIT(A), NFAC has erred, both on facts and in rejecting the contention of the assessee that the order passed by the AO is illegal and void-ab initio since reopening has been made on the basis of reasons without there being any whisper in the reasons recorded that the income has escaped due to the failure on part of the assessee to disclose fully and truly a material facts necessary for assessment, as the same has been reopened after a period of four years tom the end of relevant assessment year and the assessment has already been made under Section 143(3). (ii) That the CIT(A), NFAC has erred in upholding the action of the AO despite the fact that the order passed by learned AO is illegal and void ab initio, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he fact and violated the provision of the section 80IC of the Act. The AO has passed the order u/s 147/143(3) of the Act dated 07-09-2016 reducing deduction Rs 5000000/- on account of export incentive and Rs 1931555/- on account of foreign exchange fluctuation income total amount of Rs 6931555/- u/s 80IC of the Act. The AO observed as under :- Satisfaction is hereby recorded that the assessee had concealed the particulars of its correct income or has furnished inaccurate particulars of income, or has furnished inaccurate particulars of income. Penalty proceedings u/s. 271 (1)(c) is initiated on this issue separately. Assessee at an income of Rs. 74,92,786/- issued demand notice and challan. Charge interest u/s. 234B, penalty proceedings u/s. 271 (1) (c) initiate separately, give credit for pre-paid as per record. 4. Aggrieved by the order of the AO the assessee has filed the appeal before the Ld. CIT(A), who vide order dated 12-01-2024 dismissed the appeal against which the assessee is in appeal before us. 5. The Ld.AR for the assessee has submitted that the assessee has filed return of income with in time and all notices had complied by the assessee. He has further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer did not do. It was plainly a case of oversight, and it cannot be said that the income chargeable to tax for the relevant assessment year had escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts. The Income-tax Officer had all the material facts before him when he made the original assessment. He cannot now take recourse to section 147(a) to remedy the error resulting from his own oversight. 8. In the case of Oracle India Private Limited Vs. Assistant Commissioner of Income Tax, Circle 13 (1), New Delhi the Hon ble Delhi High Court held as under :- 24. What Explanation (1) does is to clarify that the mere production of the account books or other evidence by the Assessee before an AO from which the AO, with due diligence, could have discovered 'material evidence' would not necessarily amount to disclosure. In other words, the fact of production of the account books and other evidence should not be presumed to be the making Co material facts' by the Assessee. Nevertheless, the burden of a disclosure of 'all is on the AO to show that there has been a failure by the Assessee to discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons noted in the order made the additions. He has submitted that Ld. CIT(A) thereafter for the reasons noted in the order has dismissed the appeal. He has further submitted that the assessee has wrongly claimed the income of export incentive and foreign exchange fluctuation as deduction u/s 80IC of the Act. The assessee has not disclosed fully and truly all material facts necessary for assessment. Therefore, he submitted that the order of Ld.CIT(A) be upheld. 10. We have heard the rival arguments and perused the material available on record. 11. The Ld CIT(A) has observed in his order as under;- 5.3 I have carefully considered the findings in assessment order and rival submission of the appellant. It is observed that AO has sufficient reasons to believe that some income has escaped assessment chargeable to tax by the reason of failure on part of the assessee to disclose fully and truly all material facts necessary for assessment. On perusal of record, it is observed that the appellant firm is engaged in the business of manufacturing of decorative and industrial laminated sheets at Baddi, Himachal Pradesh and is eligible for claiming deduction u/s 80-IC of the Act. The appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission with respect to disallowance u/s. 80-IC of the Act. 12. The Ld AR of the assessee has submitted that no action can be taken against the assessee u/s 147 of the Act if assessment was made u/s 143(3) /146 of the Act. 13. The provision of the section 147 explanation 1 as under ;- If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or re-compute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). Explanation. For the purposes of assessment or reassessment or re-computation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with. 14. In the instant case the scrutiny was made and assessment order was passed under ..... 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