PREETHA S NAIR,KOLLAM vs. ACIT, CIRCLE-1, KOLLAM

- 2 - 2. From the assessment records, it emerges that the assessee was assessed u/s 143(3) on 01.03.2004. However, the case was reopened and notice u/s 148 was issued on 17.03.2008 which is beyond 4 years from end of relevant assessment year. The case was reopened to disallow 90% of processing charges while computing deduction u/s 80HHC. Upon computation, the eligible profits were found to be loss and accordingly, deduction u/s 80HHC was denied to the assessee.

During appellate proceedings, the assessee assailed reopening on the ground that the reopening was on the basis of subsequent decision of Hon’ble Supreme Court which is impermissible. The assessee also assailed the assessment on merits. However, rejecting all the pleas of the assessee, Ld. CIT(A) confirmed the action of Ld. AO against which the assessee is in further appeal before us.

The undisputed position that could be culled out is that the assessee was subjected to regular scrutiny assessment proceedings u/s 143(3). However, the case was reopened beyond 4 years based on subsequent decision by Hon’ble Supreme Court. However, in terms of requirements of proviso to Sec.147, there is no allegation of failure on the part of the assessee to make true and full disclosure of all material facts which were necessary for framing the assessment. The review of order based on subsequent decision is not permissible. Therefore, we quash the reassessment proceedings. The assessee succeeds on legal ground which renders ground on merits as infructuous.

The appeal stand allowed in terms of our above order.