CIT v. Purolator India Ltd. - Taxpublishers.in

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The Tax Publishers2012 TaxPub(DT) 1720 (Del-HC) : (2012) 343 ITR 0155 : (2012) 254 CTR 0610 : (2012) 072 DTR 0189 INCOME TAX ACT, 1961 --Reassessment--Full and true disclosureNotice after expiry of four years--Reassessment proceedings had been initiated by AO after recording that deduction under section 80HHC was allowed without reducing the deduction allowed under section 80-IB as required by section 80-IA(9). Assessee had fully disclosed the fact that he claimed deduction under section 80HHC as well as 80-IB in return of income and auditors report. Held: AO was not justified. As reassessment was initiated after expiry of four years, proviso of section 147 was applicable which required failure or omission on part of assessee to make full and true disclosure of material facts. Assessee had disclosed all material facts in return of income and AO did not point any material fact which came to his notice subsequently after the assessment was made under section 143(3). Therefore, as pre-conditions for initiation of proceedings were not satisfied, reassessment order was set aside. Income Tax Act, 1961, Section 147 IN THE DELHI HIGH COURT SANJIV KHANNA AND R.V. EASWAR, JJ. CIT v. Purolator India Ltd. ITA No. 489/2011 28 November, 2011 Appellant by : N.P. Sahni, Sr. Standing Counsel, Respondent by : Kavita Jha and Somnath Shukla, Advocate, ORDER *Sanjiv Khanna, J.* The present appeal filed by the Revenue under section 260A of the Income Tax Act, 1961 (the Act) relates to assessment year 2000-01 and is directed against the order of the Income Tax Appellate Tribunal (tribunal, for short) dt. 13-5-2010 in the case of Purolator India Ltd. now known as Mahle Filter System (India) Ltd. (respondent-assessee). 2. By the impugned order the tribunal has set aside the reassessment order on the ground that the jurisdictional pre-conditions for initiation of proceedings were not satisfied. Reassessment proceedings had been initiated by the assessing officer after recording that the computation of deduction under section 80HHC was allowed without reducing the deduction claimed and allowed under section 80-IB as required by section 80-IA(9), which is also applicable to section 80-IB. 3. It is not disputed that the original return of income of Rs. 2,37,64,670 was filed on 28-11-2000. The assessment was completed under section 143(3) at Rs. 3,00,51,422. There were two subsequent orders under section 154/143(3) and section 250/143(3) before the reassessment proceedings were initated vide notice dt. 7-3-3006. 4. The assessing officer in the original assessment proceedings had specifically examined the deduction claimed under section 80HHC, as a question/issue had arisen whether the said deduction as claimed by the assessee was as per the said section. The assessee had claimed deduction under section 80HHC at Rs. 94,13,277. The same was reduced by the assessing officer by Rs. 18,35,706 and restricted to Rs. 75,77,571. The original return of income was accompanied by audited accounts and auditors report. The copy of the auditor report was required to be submitted in terms of section 80HHC(4) of the Act. Similarly, the assessee had claimed deduction under section 80-IB of the Act, which was specifically mentioned in the audited accounts and the auditors report. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2012 TaxPub(DT) 1720 (Del-HC) : (2012) 343 ITR 0155 : (2012) 254 CTR 0610 : (2012) 072 DTR 0189

INCOME TAX ACT, 1961

--Reassessment--Full and true disclosureNotice after expiry of four years--Reassessment proceedings had been initiated by AO after recording that deduction under section 80HHC was allowed without reducing the deduction allowed under section 80-IB as required by section 80-IA(9). Assessee had fully disclosed the fact that he claimed deduction under section 80HHC as well as 80-IB in return of income and auditors report. Held: AO was not justified. As reassessment was initiated after expiry of four years, proviso of section 147 was applicable which required failure or omission on part of assessee to make full and true disclosure of material facts. Assessee had disclosed all material facts in return of income and AO did not point any material fact which came to his notice subsequently after the assessment was made under section 143(3). Therefore, as pre-conditions for initiation of proceedings were not satisfied, reassessment order was set aside.

Income Tax Act, 1961, Section 147

IN THE DELHI HIGH COURT

SANJIV KHANNA AND R.V. EASWAR, JJ.

CIT v. Purolator India Ltd.

ITA No. 489/2011

28 November, 2011

Appellant by : N.P. Sahni, Sr. Standing Counsel,

Respondent by : Kavita Jha and Somnath Shukla, Advocate,

ORDER

Sanjiv Khanna, J.

The present appeal filed by the Revenue under section 260A of the Income Tax Act, 1961 (the Act) relates to assessment year 2000-01 and is directed against the order of the Income Tax Appellate Tribunal (tribunal, for short) dt. 13-5-2010 in the case of Purolator India Ltd. now known as Mahle Filter System (India) Ltd. (respondent-assessee).

2. By the impugned order the tribunal has set aside the reassessment order on the ground that the jurisdictional pre-conditions for initiation of proceedings were not satisfied. Reassessment proceedings had been initiated by the assessing officer after recording that the computation of deduction under section 80HHC was allowed without reducing the deduction claimed and allowed under section 80-IB as required by section 80-IA(9), which is also applicable to section 80-IB.

3. It is not disputed that the original return of income of Rs. 2,37,64,670 was filed on 28-11-2000. The assessment was completed under section 143(3) at Rs. 3,00,51,422. There were two subsequent orders under section 154/143(3) and section 250/143(3) before the reassessment proceedings were initated vide notice dt. 7-3-3006.

4. The assessing officer in the original assessment proceedings had specifically examined the deduction claimed under section 80HHC, as a question/issue had arisen whether the said deduction as claimed by the assessee was as per the said section. The assessee had claimed deduction under section 80HHC at Rs. 94,13,277. The same was reduced by the assessing officer by Rs. 18,35,706 and restricted to Rs. 75,77,571. The original return of income was accompanied by audited accounts and auditors report. The copy of the auditor report was required to be submitted in terms of section 80HHC(4) of the Act. Similarly, the assessee had claimed deduction under section 80-IB of the Act, which was specifically mentioned in the audited accounts and the auditors report.