Home › Income-Tax Act › The Great Eastern Shipping Company Ltd. v. K.C Naredi, Add. CIT (2021) 208 DTR 273 / 440 ITR 58 (Bom.)(HC)

The Great Eastern Shipping Company Ltd. v. K.C Naredi, Add. CIT (2021) 208 DTR 273 / 440 ITR 58 (Bom.)(HC)

S. 147 : Reassessment-After the expiry of four years-Shipping business-Reserves-Dividend and long term capital gains-No failure to disclose material facts-Return was not filed in pursuance of notice issued u/s. 148 of the Act-There is no hard and fast rule that the assessee should file the return pursuant to notice, when the reasons do not disclose on the face of it any failure on the part of the assessee to disclose all material facts necessary for assessment-Reassessment notice was quashed. [S. 33AC, 148, Art. 226]

The assessment was completed u/s 143(3) of the Act. The reassessment notice was issued on 30-11-2000, for alleged wrongly allowing the deduction u/s 33AC of the Act. The petitioner requested for copy of the recorded reasons which was not provided. The assessee filed the writ before the High Court. The writ was admitted on 18th December  2001 and ad-interim stay was granted. The reason was given in the affidavit filed in the reply by the respondent. The revenue contended  that as the petitioner has not filed the return pursuant to the notice u/s. 148 of the Act  as per the ratio laid down by Supreme Court in  GKN Driveshafts (India) Ltd v. ITO (2003) 259 ITR 19 (SC), the petition should be rejected. The petitioner relied on the Judgement  in Caprihans India Ltd v.Traun Seem Dy.CIT (2003)) 132 Taxman 123 (Bom)(HC) for the proposition that there is no hard and fast rule that the assessee should file its return pursuant of the notice u/s 148 of the Act, more so when the reasons do not disclose on the face of it any failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. The Court could certainly entertain the petition and set aside the notice. On the facts the Court in its wisdom thought fit to issue rule and also grant relief on 18th December 2021. Court referred the Judgement in CIT v. Trend Electronics (2015) 379 ITR 456 (Bom) (HC)  wherein the court observed  that  “ where the jurisdictional issue is involved the same must be strictly complied with by the authority concerned and no question of knowledge being attributed on the basis of implication can arise. We also do not appreciate the stand of the Revenue, that the respondent-assessee had asked the reasons recorded only once and therefore, seeking to justify non-furnishing of reasons. We expect the State to act more reasonably “    

The court held that the petitioner has been allowed a deduction under section 33AC of the Act in respect of income from dividends, long term capital gains and interest is no ground for initiating proceedings u/s 148 of the Act. Reassessment notice was quashed.  (AY. 1994-95)