COMMISSIONER OF INCOME TAX-II JALANDHAR vs. M/S UPKAR INTERNKATIONAL BASANT NAGAR PHAGWARA

ITA/330/2011HC Punjab & HaryanaPHHC01095665201104 April 2012Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE ALOK SINGH5 pages
AI SummaryDismissed

What were the facts?

The appeals by the revenue were against a common order of the Income Tax Appellate Tribunal (ITAT) for Assessment Years 2001-02 and 2002-03. The ITAT had dismissed the revenue's appeals, upholding the Commissioner (Appeals) view that reassessment proceedings under Section 147/148 were not valid. The assessee, M/s Upkar International, had filed returns, revised them, and an assessment was made. Subsequently, the Assessing Officer (AO) initiated reassessment proceedings after the initial assessment had attained finality. The AO's reasons for reopening included claims for export incentives and interest on FDRs, and alleged lack of manufacturing activity at the Rajkot Branch. The CIT(A) and ITAT found these grounds to be a change of opinion and not indicative of failure to make a full and true disclosure, thus invalidating the reassessment.

What did the High Court hold?

The High Court held that there was no legal infirmity in the view taken by the CIT(A) and upheld by the Tribunal. It was categorically found that there was no concealment on the part of the assessee in disclosing facts to the Assessing Officer, making it impermissible for the AO to invoke Section 148 for reassessment. The authorities below correctly held that the reassessment was based on a change of opinion on the same set of facts, which cannot be a basis for exercising jurisdiction under Section 147/148. The AO's order clearly indicated a change of opinion by relying on judgments, rather than concealment. Therefore, no substantial question of law arose, and the appeals were devoid of merit.

What were the issues?

1. Whether the reopening of assessment under Section 147/148 of the Income Tax Act, 1961, was valid when the conditions of the first proviso to Section 147 were not satisfied, specifically concerning the expiry of four years from the end of the relevant assessment year and whether there was a failure on the part of the assessee to make a full and true disclosure. (Assessee's contention: The reassessment was invalid as it was based on a change of opinion by the AO and not on any failure of disclosure by the assessee. The conditions for reopening after four years were not met. Revenue's contention: The reassessment was valid due to escaped income related to export incentives, interest on FDRs, and lack of manufacturing activity at the Rajkot Branch, as per various High Court and Supreme Court decisions. The Tribunal upheld the CIT(A)'s view that it was a change of opinion.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 143(3),Section 80HHC,Section 80IB,Section 80IA(9),Section 80IB(13),Section 154,Section 250(6),Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

Date of Decision: April 4, 2012

1.

ITA No. 330 of 2011 (O&M)[Assessment Year 2002-03]

Commissioner of Income Tax, Jalandhar-II

…Appellant Versus

M/s Upkar International, Phagwara …Respondent

2.

ITA No. 332 of 2011 (O&M)[Assessment Year 2001-02]

Commissioner of Income Tax, Jalandhar-II

…Appellant Versus

M/s Upkar International, Phagwara …Respondent

CORAM: CORAM: CORAM: CORAM: HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE M.M. KUMAR HON’BLE MR. JUSTICE M.M. KUMAR

HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE HON’BLE MR. JUSTICE ALOK SINGH ALOK SINGH ALOK SINGH ALOK SINGH

Present: Mr. Vivek Sethi, Advocate,

for the appellant-revenue.

Mr. J.S. Bhasin, Advocate,

for the respondent-assessee.

1.

To be referred to the Reporters or not?

2.

Whether the Judgment should be reported in the Digest

1.

This order shall dispose of I.T.A. Nos. 330 and 332 of 2011, which have been filed by the revenue under Section 260A of the Income Tax Act, 19

The order continues below.

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