Itxa/729/2012 Of The Commissioner Of Income Tax -Ii Pune v. Shri Subhash B. Mutha

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.729 OF 2012 The Commissioner of Income Tax-II, Pune ..Appellant. V/s. Shri Subhash B. Mutha ..Respondent. Mr.Vimal Gupta, Senior Advocate i/b. Mr.Vipul Bajpayee for the appellant. None for the respondent. CORAM : S.C.DHARMADHIKARI AND A.K. MENON, JJ. DATED : 22ND AUGUST, 2014 P.C. :- 1.Heard Mr.Gupta, the learned senior counsel. With his assistance, we perused the order dated 30[th] September, 2011 impugned in this appeal. The Tribunal has allowed the appeal of the assessee and held that the order of the Commissioner of Income Tax (Appeals) dated 24[th] February, 2009 and that of the assessing officer, both pertaining to assessment year 2001-02 are contrary to the special legal provisions namely the first proviso to section 147 of the Income Tax Act, 1961. The assessing officer has been empowered by section 147 to recompute the loss or depreciation allowance or any other allowance as the case may be for the assessment year concerned, if, he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. He has then powers by section 148 to 153 to reassess the income and also any income chargeable to tax which has escaped assessment and which has come to his notice subsequently in the course of assessment or to recompute the loss or depreciation allowance or any other allowance as above. 2.In the present case, the recourse to section 143(3) of the Income Tax Act, 1961 ('the Act' for short) was taken by the revenue when the assessee disclosed a total income of Rs.12,79,428/- which included inter alia a claim of deduction under section 80HHC of the Act amounting to Rs.1,91,97,447/-. This return of income was subject to scrutiny assessment under section 143(3) of the Act and by an order dated 3[rd] December, 2007, the total income was assessed at Rs.12,75,428/- and the claim of deduction under section 80HHC was accepted. A notice under section 148 of the Act was issued on 6[th ]October, 2006 to reopen the assessment and after recording the reasons, which were supplied, the Tribunal has held that it was not a case where the assessing officer could have held that income chargeable to tax has escaped assessment for the assessment year in question by reasons of failure on the part of the assessee to make a return under section 139 disclosing fully and truly all material facts necessary for the assessment in that year. 3.Mr.Gupta, the learned senior counsel appearing for the revenue submits that the ratio of the Division Bench of this Court in the case of Titanor Components Ltd. V/s. Assistant Commissioner of Income Tax & Ors reported in (2012) 343 ITR 183 (Bom) could not have been applied to this case. 4.After perusing the order passed by the Tribunal, we are unable to agree with Mr.Gupta. The Tribunal in paras 6 & 7 of the order under challenge has held that the assessee had disclosed all material facts. Had they not been disclosed, then, it was not possible for the revenue to bifurcate the income from the export and income from salary. If the deduction which was disclosed as income from export included the salary, then, that was also disclosed and material facts in relation thereof were on record. Thus, in these circumstances, though the Tribunal could not have upheld the exercise of powers by the assessing officer, the case clearly fell within the proviso to section 147. itxa729-12 4.After perusing the order passed by the Tribunal, we are unable to agree with Mr.Gupta. The Tribunal in paras 6 & 7 of the order under challenge has held that the assessee had disclosed all material facts. Had they not been disclosed, then, it was not possible for the revenue to bifurcate the income from the export and income from salary. If the deduction which was disclosed as income from export included the salary, then, that was also disclosed and material facts in relation thereof were on record. Thus, in these circumstances, though the Tribunal could not have upheld the exercise of powers by the assessing officer, the case clearly fell within the proviso to section 147. itxa729-12 5.Thus, to support this factual conclusion the Tribunal referred to the legal provisions. That a distinction is made out in the Division Bench judgment between a wrong claim by the assessee after disclosing all the true and material facts and a wrong claim made by the assessee by withholding the material facts fully and truly. The present case was not falling within the later part of the distinction made by the Tribunal but the earlier one. In such circumstances, the assessing officer could not have proceeded under section 147. For all these reasons, the factual finding does not suffer from any error of law apparent on the face of record or perversity, warranting our interference in further appellate jurisdiction. 6.The appeal is devoid of any merit and is dismissed. (A.K. MENON, J.) (S.C.DHARMADHIKARI, J.)