Case Law Details
CIT vs. M/s K. Mohan & Co. (Exports) (Bombay High Court)-In both the cases, the assessment was sought to be reopened on account of retrospective amendment to Section 80HHC introduced by the Taxation Laws Amendment Act, 2005 with effect from 1st April 1998. If the legislature amends the provisions of the Act with retrospective effect, it cannot be said that there was failure on the part of the assessee to disclose fully and truly all material facts relevant for the purpose of assessment.
HIGH COURT OF BOMBAY
INCOME TAX APPEAL (L) NO. 2347 OF 2010
and INCOME TAX APPEAL NO.1263 OF 2011
The Commissioner of Income Tax 17, Mumbai
Versus
M/s. K. Mohan & Co. (Exports) (Regd.)
ORDER
DATE : 1st July, 2011.
P.C.:
3. In this view of the matter, we see no reason to interfere with the order of the Tribunal. Both the appeals are accordingly dismissed with no order as to costs.
(Smt. R.P. Sondurbaldota, J.) (J.P. Devadhar, J.)
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IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH ‘A’, MUMBAI.
Before Shri R.K. Gupta, J.M. and Shri J. Sudhakar Reddy, A.M.
I.T.A. No. 1307/Mum/2008
Assessment Year : 1999-2000.
Asst. Commissioner of Income- Tax Vs. M/s K. Mohan & Co. (Exports)
O R D E R
Per J. Sudhakar Reddy, A.M.
This is an appeal! filed by the Revenue directed against the order of the CIT (Appeal!s)-XXVII, Mumbai dated 19-11-2007 for the assessment year 1999-2000 on the following ground :
“ On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeal!s) erred in ho!ding that re-assessment proceedings initiated by the A.O. beyond the period of 4 years from the end of the assessment year in question is bad in !aw and without jurisdiction and therefore invalid.”
“ The AO has recorded the following reasons for reopening the assessment for the assessment year 1999-2000.
“(a) It is seen that the assessee has received interest of Rs.13,14,824. However, while claiming deduction u/s 80HHC, the assessee has not deducted 90% of the interest from the profits of the business thereby resulting in excess deduction of Rs. 10,83,232 being allowed to the assessee with a tax effect of Rs.3,79,131.
(b) As per the recent amendments in the Income tax Act in respect of 80HHC deduction, I have reason to believe that the assessee has incorrectly claimed deduction u/s 80HHC on the DEPB credits resulting in under assessment of income.”
4. The Honourable Bombay High Court in the case of Hindustan Lever Ltd. vs. ACIT 268 ITR 332 held as follows :
“ Held, that the notice was clearly beyond the period of four years. The reasons recorded by the Assessing Officer nowhere stated that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that assessment year. Hence the Assessing Officer had no jurisdiction to reopen the assessment proceedings. The notice was not valid and was liable to be quashed. ”
Respectfully applying the same to the facts of the case, we uphold the order of the CIT(Appeals) wherein at page 4 it is held as follows :
“ From this fact it cannot be said that the income has escaped assessment due to failure of the appellant to disclose material facts necessary for making assessments. Keeping in view the judicial decisions cited by the appellant and also following the Hon’ble Bombay High Court decision in the case of Bhor Industries Ltd. vs. ACIT (267 ITR 161) (Mum) re-assessment proceeding initiated by the A.O. beyond the period of 4 years from the end of the assessment year in question is bad in law and without jurisdiction and therefore invalid.”
5. In the result, the appeal of the Revenue is dismissed.
Order pronounced on this 24th day of February, 2010.
