Commissioner Of Income Tax, Udaipur v. M/S. Choksi Heraeus Pvt. Ltd

D.B. INCOME TAX APPEAL NO.125/2006 Commissioner of Income Tax, Udaipur Vs. M/s. Choksi Heraeus Pvt. Ltd. Date of judgment : 08[th] Dec.,2006 PRESENT HON'BLE MR. JUSTICE RAJESH BALIAHON'BLE MR. JUSTICE GOPAL KRISHAN VYAS Mr. K.K. Bissa for the appellant. ________ Heard learned counsel for the appellant. This appeal is directed against the order ofthe Income Tax Appellate Tribunal dated 3[rd] March,2006. Having considered the submissions placedbefore us we are satisfied that no substantial question oflaw arises for consideration in this appeal. The appealrelates to assessment year 1996-97. The assessmentunder Section 143(3) was completed on 9.3.1999 bycomputing deductions under Section 80-HH and 80-I byconsidering the assessee as an industrial undertakingand aggregate of profits in respect of which deduction is to be allowed. Thereafter on 5.11.2001 by issuing anotice under Section 148 of the Income Tax Act, 1961the reassessment proceedings in respect of theassessment year 1996-97 were initiated. Apparently,the notice was issued after expiry of four years from theend of assessment year 1996-97 and if the re-assessment proceedings were covered by proviso tosection 147, it was barred by time. The CIT (A) foundthat the assessee has submitted his return andsubmitted all material which was required by theAssessing Officer and on that basis the assessment wascompleted. Thereafter no new material has come onrecord nor the material fact disclosed by the assesseewere found to be incorrect. But on the basis of samematerial, the Assessing Officer had opined thatcomputation of profits for determining deduction underSection 80HH and 80 I was on higher side, hence, therewas escapement of income from the tax. Reliance wasplaced on a decision of the Court. Hence, the noticeunder Section 148 was issued to initiate reassessmentproceedings. The CIT (A) found that Assessing Officercould not have held that he hold belief that escapement of income from tax was due to any failure on the part ofthe assessee to disclose truly and correctly all materialfacts necessary for assessment. Therefore, it found thatthe case was covered by proviso to Section 147 and thesame is barred by time. Consequently, the assumptionof jurisdiction under Section 147 being withoutjurisdiction, the same was annulled. The Tribunal found as a fact that everymaterial was already before the Assessing Officer.Apparently, when it was not a case of any failure on thepart of the assessee to disclose truly and correctly allmaterial facts necessary for his assessment thereassessment proceeding could not have been initiatedafter expiry of 4 years from the end of relevantAssessment Year. What is required of the assessee isdisclosure of all primary facts necessary for assessment.It is not the requirement of the provision that theassessee must also instruct the Assessing Officer aboutthe inference to be drawn from such facts. The principlethat primary facts should be disclosed and duty to drawthe inference is of the Assessing Officer and is none of the assessee's duty was well enunciated in CalcuttaDiscount Co. Ltd. Vs. ITO, Companies District I, Calcuttaand another [1961] 41 I.T.R. 191. Accordingly, in our opinion, no substantialquestion of law arises for consideration in this appeal.The appeal fails and is hereby dismissed. , J. [ RAJESH BALIA ], J. babulal/