Commissioner of Income Tax vs Veer Overseas Ltd.

M.M. Kumar, J.—This appeal filed by the revenue is directed against order dated 8-11-2008 passed by the Tribunal, Delhi Bench "I" New Delhi in ITA No. 4752/Del/2007 in respect of the assessment year 1998-99. The original assessment was made u/s 143(3) of the Income Tax Act, 1961 (for brevity the Act) on 31-1-2001. The period of four years from the relevant assessment year within which the assessment could be reopened expired on 31-3-2003. The assessing officer, however, initiated assessment proceedings u/s 148 of the Act on 30-3-2005 much beyond the period of limitation. The Tribunal has found that proviso to Section 147 of the Act is applicable in this case. The proviso provides that no action shall be taken after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to file return u/s 139 or in response to a notice issued u/s 142(1) or Section 148 of the Act or to disclose fully and truly all material facts necessary for assessment in that assessment year. The Tribunal has recorded a finding that there was no failure on the part of the assessee respondent which may be covered by any of the aforesaid provisions.

The Tribunal proceeded to consider whether the assessee respondent had failed to disclose all material facts necessary for assessment in the original regular assessment made u/s 143(3) of the Act. The assessing officer had allowed deductions u/s 80HHC of the Act with reference to DPEB receipts. It has disclosed all the facts in respect of their export earning. The assessing officer adjudicated the issue with regard to the claim of the assessee for deductions u/s 80HHC of the Act in regular assessment. All the relevant documents which were sought by the assessing officer were produced. The assessee had received export incentive of Rs. 65,51,988 on account of Reserve Export Permit (REP) as per the details submitted to the assessing officer. The Tribunal has recorded a categorical finding that details of export incentives were submitted in full detail by the assessee respondent before the assessing officer during the course of original assessment proceedings. It is in the aforesaid circumstances that the Tribunal proceeded to examine whether the assessing officer could have taken resort to the provisions of Section 147 of the Act and issued notice u/s 148 of the Act. The Tribunal has opined that it is not justified in the backdrop of the finding that there was no failure on the part of the assessee to disclose fully and truly all material facts.

We have heard the learned Counsel for the revenue. Once categorical findings have been recorded by the Tribunal that there was no concealment in disclosing the facts to the assessing officer, it was not open to the assessing officer to invoke the provisions of Section 148 of the Act for the purposes of reassessment. On the last date of hearing, we had asked the learned Counsel for the revenue for placing on record the reasons which have lead to the issuance of notice u/s 147 of the Act. The reasons disclosed are that after regular assessment was completed u/s 143(3) of the Act, certain judgments with regard to claiming deduction u/s 80HHC were reported and on that basis it was alleged that the assessee respondent had claimed excess deductions u/s 80HHC on export incentive in the shape of REP. In that regard reliance has been placed on two judgments of the Madras High Court rendered in the cases of Commissioner of Income Tax Vs. Jameel Leathers and Uppers, and CIT v. Viswanathan & Co. (2003) 261 ITR 737 (Mad). It has been held in both the judgments that duty drawback and import entitlement are the incomes which are not derived from the business, though these are attributable to business carried on by the assessee. Likewise, certain other judgments have been relied upon. A copy of the reasons is taken on record as mark "A".

Having heard the learned Counsel, we are of the considered view that no question of law much less a substantive question of law would arise for determination of this Court. The instant case is not a case of concealment or suppression on the part of the assessee respondent warranting exercise of jurisdiction u/s 147 read with Section 148 of the Act. Jt is a case of change of opinion which cannot constitute basis for exercise of jurisdiction u/s 147/148 of the Act. It is evident from the notice issued u/s 148 of the Act that the assessing officer sought to change his opinion by placing reliance on various judgments of the Honble Madras High Court and Honble Delhi High Court. Therefore, it is a clear case of change of opinion and not of concealment. Accordingly the appeal fails and the same is dismissed.