COURT: |
|
CORAM: |
|
SECTION(S): |
|
GENRE: |
|
CATCH WORDS: |
|
COUNSEL: |
|
DATE: |
(Date of pronouncement) |
DATE: |
August 2, 2010 (Date of publication) |
AY: |
|
FILE: |
|
CITATION: |
|
|
Reopening beyond 4 years on basis of retrospective amendment not justified if assessee has not failed to disclose material facts
In respect of AY 2003-04, the assessee claimed deduction u/s 80IA (4) which was partly allowed by the AO vide assessment order passed u/s 143(3). Subsequently, a retrospective amendment was made to s. 80IA by the Finance (No. 2) Act, 2009 w.e.f 1.4.2000 to provide that s. 80IA deduction would not be admissible to an assessee who carries on business which is in the nature of works contract. After the expiry of 4 years from the end of the assessment year, the AO reopened the assessment u/s 147 to deny the deduction u/s 80IA in view of the retrospective amendment. The assessee challenged the reopening by a Writ Petition. The department argued that the by virtue of the retrospective amendment, it had to be deemed that the assessee had submitted untrue facts at the relevant time and that s. 147 was attracted. HELD allowing the Petition:
Under the first proviso to s. 147 where an assessment has been made u/s 143(3), the assessment cannot be reopened after expiry of four years from the end of the relevant assessment year unless if income has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. In the present case, there was no failure on the part of the assessee to make a full and true disclosure of the material facts. The argument that in view of the retrospective amendment of section 80IB, it is deemed that the petitioner has failed to disclose the correct facts is not acceptable. The question whether there is a failure to disclose all material facts is a matter of fact and there can be no deemed failure as contended by the department. Consequently, in the absence of any failure on the part of the assessee to make a full & true disclosure of material facts, the initiation of proceedings u/s 147 was vitiated and could not be sustained.
Note: A similar view has been taken in
Denish Industries 271 ITR 340 (Guj). A challenge to the validity of the retrospective amendment to s. 80IA (4) is
pending. See Also
Rallis India vs. ACIT (Bom) where it was held that a retrospective amendment effected
after the issue of the s. 148 notice cannot be relied upon to support the reopening.
Related Posts:
- The All Gujarat Federation Of Tax Consultants vs. Union Of India (Gujarat High Court) (No. 1) We are of the view that the respondent No.1 – Union of India, Ministry of Finance should immediately look into the issue, more particularly, the representation dated 12th October 2020 at Annexure : I of the paper book (page 108) and take an appropriate decision at the earliest in accordance…
- The All Gujarat Federation Of Tax Consultants vs. Union Of India (Gujarat High Court) (No. 2) It is the case of the CBDT that it has declined to exercise its power under Section 119 of the Act as the conditions for exercise of such power do not exist. It is the case of the Revenue that the issue of hardship was dealt with considerably at the…
- Paresh Nathalal Chauhan vs. State Of Gujarat (Gujarat High Court) It is a matter of deep regret that the Chief Commissioner of State Tax has attempted to justify such wrongful action on the part of the officers of the department by placing reliance upon the provisions relating to power of investigation under an earlier enactment to justify the actions of…
- DIT (E) vs. Gujarat Cricket Association (Gujarat High Court) It is not in dispute that the three Associations have not distributed any profits outside the organization. The profits, if any, are ploughed back into the very activities of promotion and development of the sport of cricket and, therefore, the assessees cannot be termed to be carrying out commercial activities…
- PCIT vs. Gulbrandsen Chemicals Pvt. Ltd (Gujarat High Court) The significance of the aforesaid guidelines lies in the fact that they recognise that barring exceptional cases, the tax administration should not disregard the actual transaction or substitute other transactions for them and the examination of a controlled transaction should ordinarily be based on the transaction as it has been…
- Pankajbhai Jaysukhlal Shah vs. ACIT (Gujarat High Court) Since the notice under section 148 of the Act is a jurisdictional notice, any inherent defect therein cannot be cured under section 292B of the Act. A notice under section 148(1) of the Act would be a valid notice if the jurisdictional Assessing Officer records the reasons for reopening the…
Recent Comments