Delhi High Court
Commissioner Of Income Tax vs M/S. Noble Resources & Trading ... on 18 August, 2010
Author: Manmohan
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA 225/2010
COMMISSIONER OF INCOME TAX ..... Appellant
Through: Ms. Prem Lata Bansal, Advocate
versus
M/S. NOBLE RESOURCES & TRADING
PVT. LTD. ..... Respondent
Through: None.
% Reserved on: 12th August, 2010
Date of Decision: 18th August, 2010
CORAM:
HON'BLE THE CHIEF JUSTICE
HON'BLE MR. JUSTICE MANMOHAN
1. Whether the Reporters of local papers may be allowed to see the judgment? No.
2. To be referred to the Reporter or not? No.
3. Whether the judgment should be reported in the Digest? No.
JUDGMENT
MANMOHAN, J
1. The present appeal has been filed under Section 260A of the
Income Tax Act, 1961 (hereinafter referred to as "Act, 1961")
challenging the order dated 31st March, 2009 passed by the Income Tax
Appellate Tribunal (for brevity "ITAT") in ITA No. 273/Del/2008 for
the Assessment Year 1998-1999.
2. The relevant facts of the present case are that on 25th January,
2001, the respondent-assessee filed its return declaring an income of
Rs.13,40,570/-. The said return was processed under Section 141(A)
and notice under Section 141(2) of the Act, 1961 was duly served. The
respondent-assessee's income was assessed and an addition of
Rs.82,46,080/- was made. On 24th January, 2006, the assessee's case
was reopened under Section 147 and notice was issued under Section
148 of the Act, 1961. Consequent to the reassessment an addition of
Rs.39,99,324/- was made. Though the Commissioner of Income Tax
(Appeals) [in short "CIT(A)] dismissed the respondent-assessee's
appeal, ITAT by the impugned order allowed the respondent-assessee's
appeal.
3. Ms. Prem Lata Bansal, learned counsel for the revenue submitted
that ITAT was not justified in concluding that the reassessment
proceeding initiated by the Assessing Officer was illegal. Ms. Bansal
further submitted that the issue of mere change of opinion did not arise
in the present case as the Assessing Officer in the first instance had not
applied his mind and taken a conscious decision on the issue that had
arisen for consideration during the reassessment proceedings. In this
connection Ms. Bansal relied upon certain observations made by the
CIT(A) in its order dated 06th November, 2007.
4. Having heard learned counsel for the revenue and having perused
the impugned order, we are in agreement with the view of the ITAT
that the reassessment was barred by limitation as the period of four
years had already expired from the end of the relevant Assessment Year
and as none of the conditions precedent in the first proviso to Section
147 were fulfilled in the present case. In fact, the first proviso to
Section 147 which provides extended limitation for reassessment i.e.
beyond that period of four years reads as under:-
"Provided that where an assessment under sub-section (3)
of section 143 or this section has been made for the
relevant Assessment Year, no action shall be taken under
this section 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 failure on the part of the
assessee to make a return under section 139 or in response
to a notice issued under sub-section (1) of section 142 or
section 148 or to disclose fully and truly all material facts
necessary for his assessment, for that Assessment Year."
5. From a plain reading of the above proviso, it is apparent that
where an assessment under Section 143(3) has been made, as in the
present case, no action can be taken under Section 147 of the Act, 1961
after expiry of four years from the end of the relevant Assessment Year
unless the assessee had omitted or failed either to make a return under
Section 139 of the Act, 1961 for the year or had failed to respond to a
notice under Section 142(1) or under Section 148 of the Act, 1961 or
had failed to disclose fully and truly all the facts necessary for his
assessment.
6. In fact, the CIT(A) in its order dated 06th November, 2007 has
not dealt with the issue of limitation at all. On the contrary, ITAT in its
impugned order has concluded as under:-
"In the instant case, undisputedly, it is not the allegation of
the department that the return of income was not filed by
the assessee under Section 139 or in response to notice
under Section 142(1) or 148 nor there is any allegation
that there was failure on the part of the assessee to
disclose fully and truly all material facts necessary for the
assessment. Assessment was completed u/s 143(3) and the
notice for reopening u/s 148 was issued long after expiry
of 4 years from the end of the relevant Assessment Year.
In view of these undisputed facts and applying the
proposition of law as discussed hereinabove with respect
to first proviso to Section 147, we are inclined to reverse
the findings of lower authorities on this legal issue. As the
legal issue has already been decided in favour of the
assessee, we are not going to decide the merit of addition
disputed by the assessee."
7. In our opinion, in the present case as none of the conditions
precedent for invoking the first proviso to Section 147 had arisen, the
Assessing Officer could not have assumed jurisdiction under Section
147 of the Act, 1961. Consequently, no substantial question of law
arises in the present case. Accordingly, the appeal is dismissed in
limine.
MANMOHAN, J
CHIEF JUSTICE
AUGUST 18, 2010
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