The Commissioner Of Income Tax, Karnal v. M/S Veer Overseas Ltd

ITA 510 of 2009 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITA No. 510 of 2009Date of decision 17 .3.2010 The Commissioner of Income Tax, Karnal... Appellant Versus M/s Veer Overseas Ltd.... Respondent CORAM:HON'BLE MR. JUSTICE M.M. KUMARHON'BLE MR. JUSTICE JITENDRA CHAUHAN Present:Mr. Sukant Gupta,Advocate for the appellant 1.To be referred to the Reporter or not ? 2.Whether the judgement should be reported in the Digest ? M.M.KUMAR, J. This appeal filed by the Revenue is directed against order dated8.11.2008 passed by the Income Tax Appellate Tribunal, Delhi Bench “I”New Delhi in ITA No. 4752/Del/2007 in respect of the assessment year1998-99. The original assessment was made under Section 143(3) of theIncome Tax Act, 1961 (for brevity 'the Act') on 31.1.2001. The period offour years from the relevant assessment year within which the assessmentcould be re-opened expired on 31.3.2003. The Assessing Officer, however,initiated assessment proceedings under Section 148 of the Act on 30.3.2005much beyond the period of limitation. The Tribunal has found that provisoto Section 147 of the Act is applicable in this case. The proviso providesthat no action shall be taken after the expiry of four years from the end ofthe relevant assessment year, unless any income chargeable to tax hasescaped assessment for such assessment year by reason of the failure on thepart of the assessee to file return under Section 139 or in response to a ITA 510 of 2009 notice issued under Section 142(1) or Section 148 of the Act or to disclosefully and truly all material facts necessary for assessment in that assessmentyear. The Tribunal has recorded a finding that there was no failure on thepart of the assessee- respondent which may be covered by any of theaforesaid provisions. The Tribunal proceeded to consider whether the assessee-respondent had failed to disclose all material facts necessary for assessmentin the original regular assessment made under Section 143(3) of the Act.The Assessing Officer had allowed deductions under Section 80 HHC of theAct with reference to DPEB receipts. It has disclosed all the facts in respectof their export earning. The Assessing Officer adjudicated the issue withregard to the claim of the assessee for deductions under Section 80 HHC ofthe Act in regular assessment. All the relevant documents which weresought by the Assessing Officer were produced. The assessee had receivedexport incentive of Rs. 65,51,988 on account of Reserve Export Permit(REP) as per the details submitted to the Assessing Officer. The Tribunalhas recorded a categorical finding that details of export incentives weresubmitted in full detail by the assessee- respondent before the AssessingOfficer during the course of original assessment proceedings. It is in theaforesaid circumstances that the Tribunal proceeded to examine whether theAssessing Officer could have taken resort to the provisions of Section 147of the Act and issued notice under Section 148 of the Act. The Tribunal hasopined that it is not justified in the back-drop of the finding that there wasno failure on the part of the assessee to disclose fully and truly all materialfacts. We have heard the learned counsel for the Revenue. Once ITA 510 of 2009 We have heard the learned counsel for the Revenue. Once ITA 510 of 2009 categorical findings have been recorded by the Tribunal that there was noconcealment in disclosing the facts to the Assessing Officer, it was not opento the Assessing Officer to invoke the provisions of Section 148 of the Actfor the purposes of re-assessment. On the last date of hearing, we had askedthe learned counsel for the Revenue for placing on record the reasons whichhave lead to the issuance of notice under Section 147 of the Act. Thereasons disclosed are that after regular assessment was completed underSection 143(3) of the Act, certain judgements with regard to claimingdeduction under Section 80 HHC were reported and on that basis it wasalleged that the assessee- respondent had claimed excess deductions underSection 80 HHC on export incentive in the shape of REP. In that regardreliance has been placed on two judgements of the Madras High Courtrendered in the cases of CITv. Jasmeel Leather and Uppers246 ITR 97 andCIT v. Vishwa Nathan and Co.261 ITR 727. It has been held in both thejudgements that duty drawback and import entitlement are the incomeswhich are not derived from the business, though these are attributable tobusiness carried on by the assessee. Likewise, certain other judgements havebeen relied upon. A copy of the reasons is taken on record as Mark “A”. Having heard the learned counsel, we are of the consideredview that no question of law much less a substantive question of law wouldarise for determination of this Court . The instant case is not a case ofconcealment or suppression on the part of the assessee- respondentwarranting exercise of jurisdiction under Section 147 read with Section 148of the Act. It is a case of change of opinion which cannot constitute basisfor exercise of jurisdiction under Sections 147/ 148 of the Act. It is evidentfrom the notice issued under Section 148 of the Act that the Assessing ITA 510 of 2009 Officer sought to change his opinion by placing reliance on variousjudgements of the Hon'ble Madras High Court and Hon'ble Delhi HighCourt. Therefore, it is a clear case of change of opinion and not ofconcealment. Accordingly the appeal fails and the same is dismissed. (M.M.Kumar) Judge 17.3.2010okg (Jitendra Chauhan)Judge