DCIT Circle 14 (1), v. Purolator India Ltd,

ITA 4004/DEL/2007 | 2000-2001
Pronouncement Date: 13-05-2010 | Result: Dismissed

Appeal Details

RSA Number 400420114 RSA 2007
Assessee PAN AAACP5890Q
Bench Delhi
Appeal Number ITA 4004/DEL/2007
Duration Of Justice 2 year(s) 7 month(s) 8 day(s)
Appellant DCIT Circle 14 (1),
Respondent Purolator India Ltd,
Appeal Type Income Tax Appeal
Pronouncement Date 13-05-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted F
Tribunal Order Date 13-05-2010
Date Of Final Hearing 13-05-2010
Next Hearing Date 13-05-2010
Assessment Year 2000-2001
Appeal Filed On 05-10-2007
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F: NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER & SHRI K.G. BANSAL ACCOUNTANT MEMBER ITA NO. 4004/DEL/2007 ASSESSMENT YEAR: 2000-01 DY. COMMISSIONER OF INCOME TAX CIRCLE 14(1) NEW DELHI VS. M/S. PUROLATOR INDIA LD. 1 SRI AUROBINDO MARG NEW DELHI PAN: AAACP 5890 Q ITA NO. 4102/DEL/2007 ASSESSMENT YEAR: 2000-01 M/S. PUROLATOR INDIA LD. 1 SRI AUROBINDO MARG NEW DELHI VS DY. COMMISSIONER OF INCOME TAX CIRCLE 14(1) NEW DELHI APPELLANT RESPONDENT DEPARTMENT BY : SHRI A.D. MEHRO TRA CIT DR ASSESSEE BY : SHRI AJAY VOHRA ADVOCATE AND MS. MADHAVI ADVOCATE O R D E R PER: C.L. SETHI J.M. THESE ARE CROSS APPEALS FILED BY THE REVENUE AS W ELL BY THE ASSESSEE AGAINST THE ORDER DATED 31.07.2007 PASSED BY THE LD . CIT(A) IN THE MATTER OF AN ASSESSMENT MADE U/S. 147/143(3) OF THE INCOME TA X ACT 1961 (THE ACT) FOR THE A.Y. 2000-01. ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 2 OF 12 2. IN THE ASSESSEES APPEAL THE ASSESSEE HAS TAKEN A GROUND CHALLENGING THE ACTION OF THE AO IN INITIATING REASSESSMENT PRO CEEDINGS U/S. 147 OF THE ACT AFTER THE EXPIRY OF PERIOD OF FOUR YEARS FROM T HE END OF THE RELEVANT ASSESSMENT YEAR WHICH GOES TO THE ROOT OF THE MATT ER REGARDING THE AOS VERY JURISDICTION TO MAKE THE ASSESSMENT U/S. 147 O F THE ACT. WE THEREFORE FIND IT PROPER TO FIRST DEAL WITH THE JURISDICTIONA L ISSUED RAISED BY THE ASSESSEE IN ITS APPEAL. 3. GROUND NO. 1 IN ASSESSEES APPEAL IS DIRECTED AG AINST THE CIT(A)S ORDER IN NOT HOLDING THE REASSESSMENT PROCEEDINGS I NITIATED U/S. 147 OF THE ACT AS BEING BARRED BY LIMITATION AND BEYOND AOS J URISDICTION 4. RELEVANT FACTS GIVING RISE TO THIS ISSUE MAY BE SUMMARIZED AS UNDER:- 4.1 IN THIS CASE THE ASSESSEE FILED ORIGINAL RETUR N OF INCOME ON 28.11.2000 DECLARING TOTAL INCOME AT RS. 2 37 64 670/-. THE O RIGINAL ASSESSMENT WAS THEN COMPLETED U/S. 143(3) DETERMINING TOTAL INCOME AT RS. 3 00 51 422/-. THEREAFTER THE ASSESSMENT ORDER WAS RECTIFIED VIDE ORDER U/S. 154/143(3) REVISING THE TOTAL INCOME AT RS. 3 06 69 583/- WHI CH WAS SUBSEQUENTLY REDUCED TO RS. 2 76 38 987/- ON GIVING APPEAL EFFEC T TO THE CIT(A)S ORDER. THE AOS ORDER GIVING APPEAL EFFECT TO THE CIT(A)S ORDER IS U/S. 250/143(3) DATED 10.12.2004. THEREAFTER THE AO NOTED THAT ON PERUSAL OF THE RETURN OF INCOME AND ANNEXURE THERETO IT WAS REVEALED THAT F OR THE RELEVANT ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 3 OF 12 ASSESSMENT YEAR THE DEDUCTION U/S. 80HC WAS ALLOWE D TO THE ASSESSEE WITHOUT REDUCING THE AMOUNT OF DEDUCTION CLAIMED AN D ALLOWED U/S. 80IB AS REQUIRED BY SECTION 80IA(9) WHICH IS ALSO APPLICAB LE TO SECTION 80IB OF THE ACT. IN THIS VIEW OF THE MATTER THE AO ISSUED NOT ICE U/S. 148 OF THE ACT DATED 07.03.2006 TO THE ASSESSEE WHICH WAS DULY SE RVED UPON IT. DURING THE REASSESSMENT PROCEEDINGS THE ASSESSEE RAISED OBJEC TIONS AGAINST REOPENING OF ASSESSMENT VIDE LETTER DATED 27.07.2006 AND 24.1 0.2006. THE FIRST SET OF OBJECTIONS WERE DISPOSED OFF BY THE AOS SEPARATE O RDER DATED 16.10.2006 WHEREBY THE OBJECTIONS RAISED BY THE ASSESSEE WERE REJECTED. THIS ORDER REJECTING THE ASSESSEES OBJECTIONS HAS BEEN MARKED AS ANNEXURE B AND MADE A PART OF THE ASSESSMENT ORDER MADE U/S. 143(3 )/147 OF THE ACT. THE ASSESSEES SECOND OBJECTIONS RAISED BY LETTER DATED 24.10.2006 AGAINST THE REOPENING OF THE ASSESSMENT WERE ALSO DISPOSED OFF BY THE AO VIDE HIS ORDER DATED 26.10.2006 WHICH IS ANNEXED AS ANNEXURE C TO THE ASSESSMENT ORDER MADE U/S. 143(3)/147 OF THE ACT. THE AO THE REAFTER COMPLETED THE ASSESSMENT U/S. 147/143(3) ON 18.12.2006 WHEREIN T HE DEDUCTION ALREADY ALLOWED U/S. 80IB HAS BEEN REDUCED FROM THE BUSINES S PROFIT FOR THE PURPOSE OF COMPUTING DEDUCTION U/S. 80HHC OF THE ACT. IN T HE ASSESSMENT ORDER THE AO ALSO CONSIDERED THE MATTER ABOUT THE DISALLOWANC E OF DEPB RECEIPTS FOR THE PURPOSE OF COMPUTATION DEDUCTION U/S. 80HHC OF THE ACT AND THAT ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 4 OF 12 MATTER WAS ALSO DECIDED AGAINST THE ASSESSEE BY RED UCING DEPB RECEIPTS FROM THE PROFIT FOR THE PURPOSE OF DEDUCTION U/S. 8 0HHC OF THE ACT. 5. BEING AGGRIEVED THE ASSESSEE PREFERRED AN APPEA L BEFORE THE LD. CIT(A). 6. BEFORE THE CIT(A) THE ASSESSEE HAS CHALLENGED T HE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT AS WELL THE VARIOUS DISALLOWANCES MADE BY THE AO. WITH REGARD TO THE A SSESSEES LEGAL GROUND THAT THE AO WAS NOT JUSTIFIED IN INITIATING REASSES SMENT PROCEEDINGS U/S. 147 OF THE ACT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR THE CIT(A) DECIDED THE ISSUE AGAINST THE ASSE SSEE BY OBSERVING THAT THE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELATING TO THE COMPUTATION OF INCOME AND THUS THE PROVISO TO SE CTION 147 WOULD NOT COME ON WAY FOR THE AO TO INITIATE REASSESSMENT PRO CEEDINGS U/S. 147 OF THE ACT IN AS MUCH AS THE AO HAD SUFFICIENT MATERIAL AVAILABLE TO ENTERTAIN A REASONABLE BELIEF THAT INCOME HAD ESCAPED ASSESSMEN T IN SO FAR THE ASSESSEES CLAIM OF DEDUCTION U/S. 80HHC IS CONCERNED. 7. STILL AGGRIEVED THE ASSESSEE IS IN APPEAL BEFOR E US. 8. WE HAVE HEARD BOTH THE PARTIES AND HAVE CAREFULL Y PERUSED THE ORDERS OF THE AUTHORITIES AND WE HAVE GONE THROUGH THE MAT ERIALS AVAILABLE ON RECORD. ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 5 OF 12 9. IN THE PRESENT CASE IT IS NOT IN DISPUTE THAT T HE ORIGINAL ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT VIDE ORDER DATED 2 7.03.2003. WE HAVE GONE THROUGH THE ASSESSMENT ORDER DATED 27.03.2003 ORIGINALLY MADE BY THE AO U/S. 143(3) OF THE ACT AND FOUND THAT THE ISSUE WITH REGARD TO THE DEDUCTION U/S. 80HHC WAS CONSIDERED BY THE AO. IN PARA (A) AT PAGE 2 THE AO HAS MENTIONED ABOUT THE CLAIM MADE BY THE ASSESS EE AT RS. 94 13 277/- U/S. 80HHC OF THE ACT. AFTER EXAMINING THE ASSESSE ES CLAIM MADE U/S. 80HHC THE AO ALLOWED CLAIM AT RS. 75 77 571/- ONLY DISALLOWING THE EXCESS CLAIM TO THE EXTENT OF RS. 18 35 706/- (RS. 94 13 277/- (-) RS. 75 77 571/-). THE RETURN OF INCOME FILED BY THE AS SESSEE WAS ACCOMPANIED BY AUDITED ACCOUNTS ALONGWITH COPY OF AUDITORS REP ORT. THE RETURN WAS ALSO ACCOMPANIED BY COPY OF REPORT OF THE CHARTERED ACCOUNTANT OBTAINED U/S. 80HHC(4) OF THE ACT. IN THE COURSE OF ASSESSM ENT PROCEEDINGS THE NOTICES ISSUED BY THE AO U/S. 143(2) OR 142(1) WERE DULY COMPLIED WITH AS SO STATED BY THE AO IN THE ASSESSMENT ORDER MADE U/ S. 143(3). IT IS ALSO NOT IN DISPUTE THAT COMPUTERIZED BOOKS OF ACCOUNTS CONS ISTING OF LEDGER CASH BOOK IN RESPECT OF ALL UNITS WERE PRODUCED BEFORE T HE AO WHICH WERE EXAMINED ON TEST CHECK BASIS BY THE AO. THE ASSESS EE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME AT RS. 2 37 64 672/- AND THIS RETURN WAS PROCESSED U/S. 143(1) OF THE ACT. THE ASSESSEE DEC LARED TOTAL INCOME OF RS. 2 37 64 680/- AFTER CLAIMING DEDUCTION U/S. 80HHC A T RS. 94 13 277/- AND ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 6 OF 12 DEDUCTION U/S. 80IB AT RS. 1 63 76 345/-. THE FACT THAT THE ASSESSEE CLAIMED DEDUCTION U/S 80IB AT RS. 1 63 76 345/- IS APPARENT AND CLEARLY KNOWN FROM THE RETURN OF INCOME ITSELF. THE ORIGINAL ASSESSME NT MADE U/S. 143(3) ON 27.03.2003 WAS FURTHER REVISED VIDE ORDER DARTED 07 .03.2006 PASSED U/S 154/143(3) OF THE ACT DETERMINING THE TOTAL INCOME AT RS. 3 06 69 583/- AND AFTER GIVING APPEAL EFFECT TO THE LD. CIT(A)S ORDE R ARISING FROM THE ORIGINAL ASSESSMENT MADE U/S. 143(3) THE ASSESSED INCOME WA S DETERMINED AT RS. 2 76 38 987/-. THEREAFTER THE AO INITIATED REASSE SSMENT PROCEEDINGS U/S. 147 OF THE ACT AND ISSUED A NOTICE U/S. 148 OF THE ACT DATED 07.03.2006 AFTER RECORDING FOLLOWING REASONS:- THE PERUSAL OF THE RETURN OF INCOME AND ANNEXURE THERETO FILED BY THE ASSESSEE REVEALED THAT FOR THE RELEVANT ASSESSMENT YEA THE DEDUCTION UNDER SECTION 80HHC W AS ALLOWED TO THE ASSESSEE WITHOUT REDUCING THE AMOUNT OF THE DEDUCTION CLAIMED AND ALLOWED UNDER SECTION 80-IB A S REQUIRED AS PER SECTION 80-IA(9) WHICH IS ALSO APPL ICABLE TO SECTION 80-IB. IN VIEW OF THIS NOTICE UNDER SE CTION 148 DATED 07.03.2006 WAS ISSUED TO THE ASSESSEE WHICH W AS DULY SERVED UPON IT. 10. THE NOTICE ISSUED U/S. 148 IS DATED 07.03.2006 WHICH IS BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT A .Y. 2000-01 IN QUESTION. THEREFORE THE VALIDITY OF PROCEEDINGS INITIATED U/ S. 147 OF THE ACT IS TO BE ADJUDGED FROM THE STANDPOINT OF PROVISO TO SECTION 147 OF THE ACT. ON READING THE PROVISO TO SECTION 147 OF THE ACT IT I S CLEAR THAT IN THE CASES WHERE AN ASSESSMENT HAS BEEN MADE U/S. 143(3) OF TH E ACT AN ACTION U/S. 147 ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 7 OF 12 OF THE ACT CAN BE TAKEN AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IF ANY INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF TH E FAILURE ON THE PART OF THE ASSESSEE (I) TO MAKE A RETURN U/S. 139 OR IN RE SPONSE TO A NOTICE ISSUED U/S. SUB-SECTION (1) OF SECTION 142 OR 148 OR (II) TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. THE PROVISO TO SECTION 147 HAS CARVED OUT AN EXCEPTION FROM THE MAIN PROVISION OF SECTION 147 OF THE ACT. IN THE PRESENT CASE IT IS NOBODYS CASE THAT THE ASSESSEE HAS FAILED TO MAKE RETURN U/S. 139 OF THE ACT OR ANY OTHER SECTION BEFORE ISSUING NOTICE U/S. 148 OF THE ACT. NOW WE HAVE TO SEE AS TO WHETHER THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. IN THE REASONS RECORDED BY THE AO FOR ISSUING NOTIC E U/S. 148 OF THE ACT THE AO HAS HIMSELF STATED THAT ON PERUSAL OF RETURN OF INCOME AND ANNEXURE THERETO FILED BY THE ASSESSEE IT WAS REVEALED TO H IM THAT DEDUCTION U/S. 80HHC WAS ALLOWED TO THE ASSESSEE WITHOUT REDUCING THE AMOUNT OF DEDUCTION CLAIMED AND ALLOWED U/S. 80IB OF THE ACT AND IN THAT VIEW OF THE MATTER A NOTICE U/S. 148 DATED 07.03.2006 WAS ISSUE D TO THE ASSESSEE. THEREFORE FROM THE AVERMENTS MADE BY HIM IN THE RE ASONS RECORDED IT IS CLEAR THAT THE AO HAS ISSUED NOTICE U/S. 148 OF THE ACT IN THE LIGHT OF THE DETAILS OR FACTS AVAILABLE IN THE RETURN OF INCOME AND ANNEXURE THERETO FILED ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 8 OF 12 BY THE ASSESSEE. THE LD. AO HAS NOT POINTED OUT AN Y MATERIAL OR BASIC FACT WHICH CAME TO HIS NOTICE SUBSEQUENTLY AFTER THE ASS ESSMENT WAS MADE U/S. 143(3) OF THE ACT AND WHICH WERE NOT DISCLOSED BY THE ASSESSEE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS. THE AO HAS FURTHE R SATED IN THE REASONS THAT DEDUCTION U/S. 80HHC WAS ALLOWED TO THE ASSESS EE WITHOUT REDUCING THE AMOUNT OF DEDUCTION CLAIMED AND ALLOWED U/S. 80IB O F THE ACT WHICH GOES TO MEAN THAT THE CLAIM U/S. 80HHC WAS ALLOWED BY TH E AO HIMSELF WITHOUT REDUCING THE AMOUNT OF DEDUCTION CLAIMED AND ALLOWE D U/S. 80IB OF THE ACT. THE REASONS RECORDED BY THE AO THEREFORE MAKES IT CLEAR WITHOUT ANY DOUBT THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESS EE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. T HE FACT THAT THE ASSESSEE CLAIMED DEDUCTION U/S. 80HHC AS WELL U/S. 80IB WERE DULY AVAILABLE IN THE RETURN OF INCOME AS WELL AS ANNEXURE THERETO WHICH WERE DULY CONSIDERED BY THE AO AT THE TIME OF THE MAKING THE ORIGINAL ASSES SMENT ORDER U/S. 143(3) OF THE ACT. IT IS ALSO PERTINENT TO NOTE THAT EVEN NO ALLEGATION HAS BEEN MADE BY THE AO IN THE REASONS RECORDED FOR ISSUING NOTICE U /S. 148 THAT THE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL FACTS NE CESSARY FOR HIS ASSESSMENT. IT IS NOT THE CASE OF THE AO MADE OUT IN THE REASONS R ECORDED THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. THEREFORE THE INITI ATION OF REASSESSMENT PROCEEDINGS U/S. 147 OF THE ACT AND ISSUANCE OF NOT ICE U/S. 148 DATED ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 9 OF 12 07.03.2006 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IN THE PRESENT CASE IS CLEARLY HI T BY THE PROVISO TO SECTION 147 OF THE ACT WHICH MAKE THE PROCEEDINGS INITIATE D BY THE AO AS WITHOUT JURISDICTION IN AS MUCH AS WITHOUT SATISFYING THE C ONDITIONS MENTIONED IN PROVISO TO SECTION 147 OF THE ACT THE AO HAS NO PO WER TO TAKE ACTION U/S. 147 OF THE ACT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WHEN THERE WAS A REGULAR ASSESSMENT ALREADY MADE U/S. 143(3) OF THE ACT. 11. IN SUPPORT OF THE VIEW WE HAVE TAKEN ABOVE A G AINFUL REFERENCE MAY BE MADE TO A DECISION OF HONBLE JURISDICTIONAL DEL HI HIGH COURT IN THE CASE OF HARAYANA ACRYLIC MANUFACTURING CO. LTD. VS. CIT & ANR. (2009) 308 ITR 38 WHERE THE HONBLE HIGH COURT HAS OBSERVED AND HE LD AS UNDER:- 26. VIEWED IN THIS LIGHT THE PROVISO TO S. 147 OF THE SAID ACT CARVES OUT AN EXCEPTION FROM THE MAIN PROVISIONS OF S. 147. IF A CASE WERE TO FALL WITHIN THE PROVISO WHETHER OR NO T IT WAS COVERED UNDER THE MAIN PROVISIONS OF S. 147 OF THE SAID ACT WOULD NOT BE MATERIAL. ONCE THE EXCEPTION CARVED OUT BY THE PROVISO CAME INTO PLAY THE CASE WOULD FALL OUTSIDE THE AMB IT OF S. 147. 27. EXAMINING THE PROVISO [SET OUT ABOVE] WE FIND THAT NO ACTION CAN BE TAKEN UNDER S. 147 AFTER THE EXPIRY O F FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IF THE FOLLOWING CONDITIONS ARE SATISFIED:- (A) AN ASSESSMENT UNDER SUB-S. (3) OF S. 143 OR THI S SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT Y EAR; AND ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 10 OF 12 (B) UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF TH E FAILURE ON THE PART OF THE ASSESSEE: (I) TO MAKE A RETURN UNDER S. 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-S. (1) OF S.142 OR S.148; O R (II) TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT 28. CONDITION (A) IS ADMITTEDLY SATISFIED IN AS MUC H AS THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER S. 143(3) O F THE SAID ACT. CONDITION (B) DEALS WITH A SPECIAL KIND OF ES CAPEMENT OF INCOME CHARGEABLE TO TAX. THE ESCAPEMENT MUST ARIS E OUT OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETU RN UNDER S.139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-S. (1) OF S. 142 OR S. 148. THIS IS CLEARLY NOT THE CASE HERE BECAUSE THE PETITIONER DID FILE THE RETURN. SINCE THERE WAS NO FAILURE TO MAK E THE RETURN THE ESCAPEMENT OF INCOME CANNOT BE ATTRIBUTED TO SUCH F AILURE. THIS LEAVES US WITH ESCAPEMENT OF INCOME CHARGEABLE TO T AX WHICH ARISES OUT OF THE FAILURE ON THE PART OF THE ASSESS EE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THAT ASSESSMENT YEAR. IT IS ALSO FOUND THAT THE PE TITIONER HAD DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESS ARY FOR ITS ASSESSMENT THEN NO ACTION UNDER S. 147 COULD HAVE BEEN TAKEN AFTER THE FOUR YEAR PERIOD INDICATED ABOVE. SO TH E KEY QUESTION IS WHETHER OR NOT THE PETITIONER HAD MADE A FULL AN D TRUE DISCLOSURE OF ALL MATERIAL FACTS? 29. IN THE REASONS SUPPLIED TO THE PETITIONER THER E IS NO WHISPER WHAT TO SPEAK OF ANY ALLEGATION THAT THE PETITIONER HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FAC TS NECESSARY FOR ASSESSMENT AND THAT BECAUSE OF THIS FAILURE THERE H AS BEEN AN ESCAPEMENT OF INCOME CHARGEABLE TO TAX. MERELY HAV ING A REASON TO BELIEVE THAT INCOME HAD ESCAPED ASSESSMEN T IS NOT SUFFICIENT TO REOPEN ASSESSMENTS BEYOND THE FOUR YE AR PERIOD INDICATED ABOVE. THE ESCAPEMENT OF INCOME FROM ASS ESSMENT MUST ALSO BE OCCASIONED BY THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE MATERIAL FACTS FULLY AND TRULY. THIS IS A NECESSARY CONDITION FOR OVERCOMING THE BAR SET UP BY THE PROV ISO TO S. 147. IF THIS CONDITION IS NOT SATISFIED THE BAR WOULD O PERATE AND NO ACTION UNDER S. 147 COULD BE TAKEN. WE HAVE ALREAD Y MENTIONED ABOVE THAT THE REASONS SUPPLIED TO THE PETITIONER D OES NOT CONTAIN ANY SUCH ALLEGATION. CONSEQUENTLY ONE OF THE COND ITIONS ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 11 OF 12 PRECEDENT FOR REMOVING THE BAR AGAINST TAKING ACTIO N AFTER THE SAID FOUR YEAR PERIOD REMAINS UNFULFILLED. IN OUR RECENT DECISION IN WEL INTERLADE (P) LTD.(2009) 308 ITR 22 (DELHI) WE HAD AGREED WITH THE VIEW TAKEN BY THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF DULL CHAND SINGHANIA (2004) 269 ITR 192 THAT IN THE ABSENCE OF AN ALLEGATION IN THE REASONS RECORDE D THAT THE ESCAPEMENT OF INCOME HAD OCCURRED BY REASON OF FAIL URE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY A LL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT ANY ACTION TAKEN BY T HE AO UNDER S. 147 BEYOND THE FOUR YEAR PERIOD WOULD BE WHOLLY WITHOUT JURISDICTION. REITERATING OUR VIEW-POINT WE HOLD THAT THE NOTICE DT. 29 TH MARCH 2004 UNDER S.148 BASED ON THE RECORDED REAS ONS AS SUPPLIED TO THE PETITIONER AS WELL AS THE CONSEQ UENT ORDER DT. 2 ND MARCH 2005 ARE WITHOUT JURISDICTION AS NO ACTION UNDER S.147 COULD BE TAKEN BEYOND THE FOUR YEAR PERIOD IN THE CIRCUMSTANCES NARRATED ABOVE. 12. FOR THE REASONS GIVEN ABOVE WE THEREFORE HOLD THAT THE IMPUGNED NOTICE ISSUED BY THE AO U/S. 148 DATED 07.03.2006 A ND CONSEQUENT ASSESSMENT ORDER MADE U/S. 143(3)/147 OF THE ACT ON 15.12.2006 IS INVALID AND WITHOUT JURISDICTION IN AS MUCH AS THE PROCEEDI NGS U/S. 147 OF THE ACT HAS BEEN INITIATED BY THE AO WITHOUT SATISFYING THE CONDITIONS ENUMERATED IN PROVISO TO SECTION 147 OF THE ACT. WE THEREFORE CANCEL THE ASSESSMENT ORDER MADE U/S. 143(3)/147 OF THE ACT DATED 15.12.2 006 BEING WITHOUT JURISDICTION. 13. IN THE LIGHT OF THE VIEW WE HAVE TAKEN ABOVE T HE OTHER GROUNDS OF APPEAL RAISED BY THE ASSESSEE WITH REGARD TO THE CO MPUTATION OF DEDUCTION U/S. 80HHC AND THE GROUND RAISED BY THE REVENUE WI TH REGARD TO THE COMPUTATION OF DEDUCTION U/S. 80HHC VIS--VIS U/S. 80IB HAVE BECOME ITA NO. 4004/DEL/2007 ITA NO. 4102/DEL/2007 PAGE 12 OF 12 REDUNDANT AND THEREFORE THEY NEED NO ADJUDICATIO N AT THIS STAGE AND ARE THEREFORE DISMISSED AS INFRUCTUOUS. 14. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THAT OF THE REVENUE IS DISMISSED. 15. THIS DECISION WAS PRONOUNCED IMMEDIATELY AFTER THE HEARING WAS OVER ON 13 TH MAY 2010. SD/- (K.G. BANSAL) ACCOUNTANT MEMBER SD/- (C.L. SETHI) JUDICIAL MEMBER DATED: 13 TH MAY 2010 *NITASHA COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ITAT NEW DELHI. BY ORDER DEPUTY REGISTRAR