Case Law Details
AI Champdany Industries Limited Vs Commissioner (Calcutta High Court)
Hon’ble Supreme Court in the case of COMMISSIONER OF INCOME TAX VS. MAX INDIA LTD. 2007 295 ITR 282 (SC) had taken note of the fact that Section 80HHC had been amended eleven times and different views existed on the day, when the COMMISSIONER (therein) passed the order in the said case. That apart the Hon’ble Supreme Court also took note of the amendment which was made to the Section in 2005 with retrospective effect and held that such retrospective amendment will not attract the provisions of Section 263. This interpretation would equally apply to a reassessment proceedings under Section 148 of the Act. The relevant portion of the judgment is quoted hereinbelow.
“According to the learned Additional Solicitor General, on an interpretation of the provision of section 80HHC(3) as it then stood the view taken by the Assessing Officer was unsustainable in law and therefore the Commissioner was right in invoking section 263 of the Income-tax Act. In this connection, he has further submitted that in fact the 2005 amendment which is clarificatory and retrospective in nature itself indicates that the view taken by the Assessing Officer at the relevant time was unsustainable in law. We find no merit in the said contentions. Firstly, it is not in dispute that when the order of the Commissioner was passed there were two views on the word “profits” in that section. The problem with section 80HHC is that it has been amended eleven times. Different views existed on the day when the Commissioner passed the above order. Moreover, the mechanics of the section have become so complicated over the years that two views were inherently possible. Therefore, subsequent amendment in 2005 even though retrospective will not attract the provision of section 263 particularly when as stated above we have to take into account the position of law as it stood on the date when the Commissioner passed the order dated March 5, 1997 in purported exercise of his powers under section 263 of the Income-tax Act.”
ITAT cannot allege suppression of facts when even reasons recorded for reopening not have any such allegation and the same issue was twice examined by AO in Section 154 proceedings.
We find that the learned Tribunal has written an elaborate order. However, we are surprised to find that the learned Tribunal has held that the assessee suppressed the material facts which was never the allegation in the reasons recorded for reopening. It is not clear as to on what basis the learned Tribunal came to such a conclusion. In fact, the learned Tribunal has accepted the legal position that the assessment cannot be done on a mere change of opinion. However, it sought to justify the reassessment order on the ground that the certificate furnished by the Chartered Accountant the figure of loss was not shown, though the figure of the sale proceeds of the trading goods and the direct and indirect costs were shown. That apart, we find that the finding of the learned Tribunal that the assessing officer had no occasion to or did not examine the claim for deduction under Section 80HHC of the Act is thoroughly flawed and equally is the finding of the learned Tribunal that there was suppression of facts made by the assessee. In the preceding paragraphs we have pointed out that not only once but twice proceedings under Section 154 of the Act was initiated and both the proceedings were on the very same issue as regards the entitlement of the assessee to claim deduction under Section 80HHC of the Act. Therefore, such finding of the learned tribunal was absolutely perverse. The learned Tribunal also had held that no conscious opinion was formed by the assessing at the original assessment stage while allowing deduction under Section 80HHC of the Act and there was no exemption or deliberation. This finding appears to be no supported by any justifiable reasons but on a perusal of the assessment order it is definitely clear that the case was discussed with the assessee and thereafter taking into consideration the Chartered Accountant’s certificate the deduction as claimed was granted. In fact, there were two decisions of the learned Tribunal which were namely, International Research Park Laboratories Ltd. and A.M. Moosa which decisions would clearly support the stand and the conclusion arrived at the by the assessing officer while completing the scrutiny assessment under Section 143(3) of the Act vide order dated 3.3.1997.
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