Lal v. Commissioner Of Income Tax V. Parrisons Roller Flourmills Pvt.ltd., (Ita

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN & THE HONOURABLE MR. JUSTICE ASHOK MENON MONDAY ,THE 29TH DAY OF OCTOBER 2018 / 7TH KARTHIKA, 1940 ITA.No. 1079 of 2009 AGAINST THE ORDER/JUDGMENT IN ITA 507/2004 of I.T.A.TRIBUNAL,COCHINBENCH DATED 04-08-2005 APPELLANT/S: THE COMMISSIONER OF INCOME TAXKOTTAYAM. BY ADV. SRI PKR MENON SR FOR GOI TAXES SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/S: M/S. KANAM LATEX INDUSTRIES PVT. LTD. ,KOTTAYAM. BY ADVS.SRI.E.K.NANDAKUMAR (SR.)SRI.K.JOHN MATHAISRI.P.BENNY THOMASSRI.RAMESH CHERIAN JOHN OTHER PRESENT: THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 29.10.2018, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Vinod Chandran, J. Thequestionagainarises,whetherthe re-assessment completed after four years, but withinsix years, can be sustained for reason ofnon-disclosure of full and true material facts, as perSection 147 of the Income Tax Act, 1961 (for brevity'the Act'). 2.The facts in the appeal are thus: In the assessment years 1991-92, the assessee claimeddeductions under Sections 80-HH and 80-I respectivelyof Rs.5,69,813/- and Rs.15,14,593/-. Later, deductionclaimed could also have been only on the same amountclaimed under Section 80-HH. The Assessing Officer,however, allowed the deductions. A re-assessment proceedings was attempted after a period of four years, which was set aside by the First Appellate Authorityand such deletion confirmed by the Tribunal. 3.The learned Senior Counsel, Government of India(Taxes) refers to the decision in Phool Chand Bajrang Lal v. Income Tax Officer, [1993] 203 ITR 456, tocontend that the assessee having not disclosed theactual deduction, there could be rectification madeeven after four years as provided under Section 147.The learned Counsel appearing for the respondent,however, would submit that there is no reason to placereliance on the aforesaid decision, the facts of whichdisclose certain loans having been claimed, which laterwere found to be bogus. 4.Reliance placed by the Senior Counsel on Commissioner of Income Tax v. Parrisons Roller FlourMills Pvt.Ltd., (ITA No.377/2009) also cannot beaccepted, since therein there were payments shown toexisting registered dealers in the books of accounts, which on further enquiry, were shown to be bogus andthe dealers were found to be fictitious. 5.In the present case, we also notice that therewas a rectification proceeding initiated against thecompleted assessment on 08.08.1994, which was set asideby the Appellate Authorities for reason of the issuebeing debatable. In fact, the deduction claimed underboth the heads were very much explicit in the returnsand it required no roving enquiry even into the booksof accounts. The Assessing Officer had carelesslycompleted the assessment without noticing the excessclaim made under Section 80-I. 6.In this context, we place reliance on ParasuramPottery Works Co.Ltd. v. ITO, (1977) 1 SCC 408, whichwas placed before us by the learned Counsel for therespondent. Therein, the excess depreciation allowancegranted was on the failure of the Income Tax Officer toinclude initial depreciation granted, while computingthe written down value of the assets, for the relevant 6.In this context, we place reliance on ParasuramPottery Works Co.Ltd. v. ITO, (1977) 1 SCC 408, whichwas placed before us by the learned Counsel for therespondent. Therein, the excess depreciation allowancegranted was on the failure of the Income Tax Officer toinclude initial depreciation granted, while computingthe written down value of the assets, for the relevant assessment years. It was held that there was no caseof failure by the assessee to disclose fully and trulythe material facts for the purpose of assessment. Herealso, we notice that the Assessing Officer had not beendiligent enough to notice the excess claim made underSection 80-I. In fact rectification proceedings wereinitiated, within four years, which was set aside bythe Appellate Authorities. If a re-assessment wasattempted within the four year period it could havebeen sustained. 7.There could have been re-assessment proceedingsvalidly initiated within the four year period, whichthe Assessing Officer failed to do. There cannot befound any failure to disclose fully and truly thematerial facts, on which alone there could be are-assessment justified after four years. The provisionin Section 147 is to get over a non-disclosure by theassessee and not to get over the lack of diligence bythe Officers of the Department. We do not find any reason to entertain the appeal and we answer thequestion raised in favour of the assessee and againstthe Revenue. The I.T.Appeal stands rejected. No orderas to costs. Sd/-K.VINOD CHANDRANJUDGESd/-ASHOK MENONJUDGE dkr APPENDIX