C.I.T. vs. M/S CHOKSI HERAEUS PVT.LTD.

ITA/125/2006HC RajasthanRJHC01008029200608 December 2006Author: RAJESH BALIA,GOPAL KRISHAN VYAS4 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that no substantial question of law arises for consideration in the appeal. It affirmed the finding that all material facts were already before the Assessing Officer. The Tribunal reiterated that reassessment proceedings could not be initiated after four years if there was no failure on the part of the assessee to disclose truly and correctly all material facts necessary for assessment. The duty of the assessee is to disclose primary facts, not to instruct the Assessing Officer on the inferences to be drawn. This principle was well-established in Calcutta Discount Co. Ltd. Vs. ITO. Consequently, the appeal filed by the Revenue was dismissed.

What were the facts?

The appeal by the Commissioner of Income Tax, Udaipur, challenges an order of the Income Tax Appellate Tribunal dated March 3, 2006, concerning assessment year 1996-97. The original assessment under Section 143(3) was completed on March 9, 1999, allowing deductions under Sections 80-HH and 80-I. Reassessment proceedings were initiated on November 5, 2001, via a notice under Section 148, after more than four years from the end of the assessment year. The CIT (Appeals) found that the assessee had disclosed all material facts, and no new information had come to light or any disclosed fact was found incorrect. The Assessing Officer's belief that profits were computed on a higher side, leading to escapement of income, was based on the same material. The CIT (Appeals) held that the reassessment was barred by limitation as it fell under the proviso to Section 147 and annulled the assumption of jurisdiction.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 148 for assessment year 1996-97, after a lapse of four years from the end of the assessment year, were barred by limitation under the proviso to Section 147, given that the assessee had disclosed all material facts necessary for assessment. Assessee's contention (as inferred from the CIT(A)'s findings and the Tribunal's reasoning): The reassessment proceedings are barred by limitation because the conditions for invoking the proviso to Section 147 are not met. The assessee had disclosed all primary facts, and the Assessing Officer's subsequent opinion on the inference to be drawn from those facts does not constitute a failure on the part of the assessee to disclose truly and correctly. Reliance was placed on the principle enunciated in Calcutta Discount Co. Ltd. Vs. ITO. Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 80-HH,Section 80-I,Section 148,Section 147

AI-generated summary — verify with the full judgment below

1 D.B. INCOME TAX APPEAL NO.125/2006 Commissioner of Income Tax, Udaipur Vs. M/s. Choksi Heraeus Pvt. Ltd. Date of judgment : 08th Dec., 2006 PRESENT HON'BLE MR. JUSTICE RAJESH BALIA HON'BLE MR. JUSTICE GOPAL KRISHAN VYAS Mr. K.K. Bissa for the appellant. ________ Heard learned counsel for the appellant. This appeal is directed against the order of the Income Tax Appellate Tribunal dated 3rd March, 2006. Having considered the submissions placed before us we are satisfied that no substantial question of law arises for consideration in this appeal. The appeal relates to assessment year 1996-97. The assessment under Section 143(3) was completed on 9.3.1999 by computing deductions under Section 80-HH and 80-I by considering the assessee as an industrial undertaking and aggregate of profits in respect of which deduction is 2 to be allowed. Thereafter on 5.11.2001 by issuing a notice under Section 148 of the Income Tax Act, 1961 the reassessment proceedings in respect of the assessment year 1996-97 were initiated. Apparently, the notice was issued after expiry of four years from the end of assessment year 1996-97 and if the re- assessment proceedings were covered by proviso to s

The order continues below.

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