Shri N.Baskaran, CHENNAI V. DCIT, Vellore

ITA 131/CHNY/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61251 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 25-06-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 23-01-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VI KRAMADITYA
• Keywords: Reopening of assessment; Depreciation; Question of law; Reason to believe; Reassessment proceedings
• Section: 143(3); 142(1); 80HHC; 147; 148; 154; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, CHENNAI BEFORE SHRI ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NO. 130 & 131/MDS/2012 (ASSESSMENT YEARS : 2003-04 & 2004-05) SHRI N. BASKARAN, PROP: M/S RAM LEATHERS, #41, SIPCOT INDUSTRIAL COMPLEX, SIPCOT, RANIPET 632 408. PAN : AACPB (APPELLANT) V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE I, VELLORE. (RESPONDENT) APPELLANT BY : SHRI PHILIP GEORGE, ADVOCATE RESPONDENT BY : SHRI VIKRAMADITYA , JCIT DATE OF HEARING : 25.06.2012 DATE OF PRONOUNCEMENT : 25.06.2012 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : IN THESE APPEALS FILED BY THE ASSESSEE, COMMON GR IEVANCE IS THAT CIT(APPEALS) UPHELD THE REOPENING OF ASSESSMENT UND ER SECTION 148 OF INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'), AFTER FO UR YEARS FROM THE END OF THE IMPUGNED ASSESSMENT YEAR, WITHOUT SHOWING THAT ASSESSEE HAD ANY WAY VIOLATED FIRST PROVISO TO SECTION 147 OF THE AC T. 2 I.T.A. NOS.130 & 131/MDS/12 2. SHORT FACTS APROPOS ARE THAT ASSESSEE, ENGAGED I N THE MANUFACTURE AND EXPORT OF LEATHER AND SHOE UPPERS, FILED HIS RETURNS OF INCOME FOR ASSESSMENT YEARS 2003-04 AND 2004-05 ON 27.11.2003 AND 29.10.2004 RESPECTIVELY. INITIALLY THESE WERE PROC ESSED UNDER SECTION 143(1) OF THE ACT. LATER THERE WAS SCRUTINY PROCEE DING AND ASSESSMENTS WERE COMPLETED UNDER SECTION 143(3) OF THE ACT ON 2 2.2.2005 AND 24.3.2005 RESPECTIVELY. IN SUCH ASSESSMENTS, ASSES SEE WAS GIVEN DEDUCTION UNDER SECTIONS 80HHC AND 80-IB OF THE ACT . THEREAFTER, ASSESSMENTS WERE REOPENED UNDER SECTION 147 OF THE ACT FOR A REASON THAT DEDUCTION UNDER SECTION 80HHC OF THE ACT WAS G IVEN WITHOUT INVOKING SECTION 80-IB(13) READ WITH SECTION 80-IA( 9) OF THE ACT. THE REOPENED ASSESSMENTS WERE COMPLETED ON 22.6.2007 WH EREIN THE DEDUCTION UNDER SECTION 80HHC WAS RESTRICTED AND TO TAL INCOME RECOMPUTED AT ` 25,80,750/- AND ` 68,38,662/- FOR ASSESSMENT YEARS 2003-04 AND 2004-05 RESPECTIVELY, I.E. ONLY ON THE BALANCE PROFITS MEANT AFTER THE CLAIM OF DEDUCTION UNDER SECTION 80-IB OF THE ACT. IN FURTHER APPEALS, THIS TRIBUNAL DIRECTED RE-DETERMINATION OF INCOME, AFTER CONSIDERING CERTAIN CLAIMS OF THE ASSESSEE VIDE ITS ORDER DATED 16.1.2009 IN I.T.A. NOS. 125 & 126/MDS/2008. 3. MEANWHILE, THERE WAS ANOTHER REOPENING ATTEMPTED BY ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT ON 2.3.2010 FOR BOTH THE ASSESSMENT 3 I.T.A. NOS.130 & 131/MDS/12 YEARS. REASON FOR ISSUE OF SUCH NOTICE WAS THAT AS SESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80HHC OF THE ACT AND WAS AL SO ALLOWED SUCH DEDUCTION IN RESPECT OF DUTY DRAWBACK / DEPB LICENC E SALE OF ` 86,79,253 FOR ASSESSMENT YEAR 2003-04 AND ` 1,31,24,460/- FOR ASSESSMENT YEAR 2004-05. AS PER THE A.O., SUCH INC OME WAS NOT ATTRIBUTABLE TO THE BUSINESS OF THE ASSESSEE AND TH US WOULD NOT BE ELIGIBLE FOR DEDUCTION UNDER SECTION 80-IB OF THE A CT. RELIANCE WAS PLACED ON THE DECISION OF HONBLE APEX COURT IN THE CASE OF LIBERTY INDIA V. CIT (317 ITR 218) FOR SUCH A REOPENING. PURSUAN T TO SUCH REOPENINGS, THE RE-ASSESSMENTS WERE ONCE AGAIN COMP LETED WHEREBY DEDUCTION CLAIMED BY THE ASSESSEE ON DUTY DRAWBACK AND DEPB LICENCE SALE UNDER SECTION 80-IB OF THE ACT WAS NOT ALLOWED. 4. ASSESSEE MOVED IN APPEALS BEFORE CIT(APPEALS) AS SAILING THE SECOND REOPENING. ACCORDING TO IT, THE REOPENINGS WERE DONE AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE IMPUGNED A SSESSMENT YEARS. THERE WAS NO FAILURE OF THE NATURE MENTIONED IN PRO VISO TO SECTION 147 OF THE ACT WHICH WOULD JUSTIFY THE REOPENING. AS P ER THE ASSESSEE, SUBSEQUENT DECISION OF THE HONBLE APEX COURT COULD NOT BE A REASON FOR REOPENING. HOWEVER, CIT(APPEALS) WAS NOT APPRECIAT IVE OF THE CONTENTION OF THE ASSESSEE. ACCORDING TO HIM, THE A.O. HAD CLEARLY MENTIONED THAT EXPOSITION OF LAW BY THE HONBLE APE X COURT WAS ONLY AN 4 I.T.A. NOS.130 & 131/MDS/12 EXPOSITION OF CORRECT POSITION AND THE LEGAL POSITI ON SO EXPLAINED BY THE SUPREME COURT WAS ALWAYS IN EXISTENCE. RELYING ON THE DECISION OF HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CHANDIR AM V. ITO (225 ITR 611), CIT(APPEALS) WAS OF THE OPINION THAT THE REOP ENINGS WERE JUSTIFIED. FURTHER ACCORDING TO CIT(APPEALS), WHEN EVEN FOR A RECTIFICATION UNDER SECTION 154 OF THE ACT, A DECLARATION OF LAW BY HON BLE APEX COURT WAS GOOD REASON, THEN FOR A REOPENING IT WAS ALL THE MO RE A BETTER REASON. RELIANCE WAS PLACED ON THE DECISION OF HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF SOUTH INDIA ELECTRIC SUPPLY CORPORAT ION LTD. V. ITO (74 ITR 383) AND ON THE DECISION OF HONBLE SUPREME COU RT IN THE CASE OF S.A.L. NARAYANA ROW, CIT V. MODEL MILLS NAGPUR LTD. (1967) 64 ITR 67. CIT(APPEALS) FURTHER NOTED THAT HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF JAWAND SONS V. CIT (326 ITR 39), HAD ON SIMILAR FACTS HELD THAT REOPENING WAS JUSTIFIED. HE THUS UPHELD THE REOPENINGS DONE BY THE A.O. 5. NOW BEFORE US, LEARNED A.R. SUBMITTED THAT ADMIT TEDLY, THE REOPENINGS WERE RESORTED TO AFTER THE EXPIRY OF FOU R YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS. THERE IS NO CASE FO R THE REVENUE THAT THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE T O DISCLOSE FULLY AND TRULY MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT, OR THERE WAS A FAILURE TO FILE RETURN OF INCOME. UNLESS THE CONDITIONS SP ECIFIED IN PROVISO TO 5 I.T.A. NOS.130 & 131/MDS/12 SECTION 147 WAS SATISFIED, REOPENING COULD NOT HAVE BEEN DONE MERELY RELYING ON SUBSEQUENT DECISION OF HONBLE APEX COUR T. RELIANCE WAS PLACED ON THE DECISION OF HONBLE RAJASTHAN HIGH CO URT IN THE CASE OF RAJ KUMAR BAPNA V. UNION OF INDIA (251 ITR 802) AND THAT OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF TANTIA CONSTRUCT ION COMPANY LTD. V. DCIT (257 ITR 84). 6. PER CONTRA, LEARNED D.R. SUPPORTED THE ORDERS OF AUTHORITIES BELOW. ACCORDING TO HIM, HONBLE RAJASTHAN HIGH COURT IN T HE CASE OF CHANDIRAM (SUPRA) HAD HELD THAT REOPENING COULD BE DONE BASED ON JUDICIAL DECISION EVEN IF PRONOUNCED LATER TO THE O RIGINAL ASSESSMENT. AS PER LEARNED D.R., EXPOSITION OF LAW BY HONBLE APEX COURT WOULD AMOUNT TO INFORMATION AND REOPENING WAS JUSTIFIED FOR THAT REASON. 7. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL SUBMISSIONS. THERE IS NO DISPUTE THAT THESE WERE SECOND REOPENIN GS ATTEMPTED BY THE REVENUE. THE FIRST REOPENING WAS FOR RESTRICTING T HE CLAIM FOR DEDUCTION UNDER SECTION 80HHC OF THE ACT, AFTER CONSIDERING T HE DEDUCTION ALREADY GRANTED UNDER SECTION 80-IA OF THE ACT. SECOND REO PENING WAS ATTEMPTED FOR THE PURPOSE OF EXCLUDING THE DUTY DRA WBACK AND DEPB LICENCE VALUES WHILE COMPUTING DEDUCTION UNDER SECT ION 80-IB OF THE ACT. ADMITTEDLY, THIS ATTEMPT WAS PURSUANT TO DECI SION OF HONBLE APEX COURT IN THE CASE OF LIBERTY INDIA (SUPRA). THERE IS NO DISPUTE THAT AS PER 6 I.T.A. NOS.130 & 131/MDS/12 THE DECISION OF HONBLE APEX COURT IN THE CASE OF L IBERTY INDIA (SUPRA), A CLAIM OF DEDUCTION UNDER SECTION 80-IB CANNOT BE GI VEN TO DUTY DRAWBACK AND DEPB LICENCE SALE. THESE WERE CONSIDE RED AS NOT DERIVED FROM ELIGIBLE BUSINESS. THE QUESTION BEFOR E US IS WHETHER THE DECISION OF HONBLE APEX COURT CAN BE A REASON FOR REOPENING. WHAT WE NOTE HERE IS THAT THE REOPENING HAS BEEN ATTEMPTED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE IMPUGNED ASSESSMENT YEARS. SECTION 147 AND FIRST PROVISO THEREOF ARE REPRODUCED HEREUN DER:- INCOME ESCAPING ASSESSMENT . 147. IF THE ASSESSING OFFICER HAS REASON TO BELIEVE T HAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY O THER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND W HICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEE DINGS UNDER THIS SECTION, OR RECOMPUTED THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESS MENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTION S 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR): PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF S ECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT AS SESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER T HE 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 THE FAILURE ON THE PAR T 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 HI S ASSESSMENT, FOR THAT ASSESSMENT YEAR: 7 I.T.A. NOS.130 & 131/MDS/12 THERE CAN BE NO OPENING OF RE-ASSESSMENT AFTER EXPI RY OF FOUR YEARS FROM THE END OF AN ASSESSMENT YEAR UNLESS THERE WAS CERTAIN TYPES OF FAILURES ON THE PART OF THE ASSESSEE. THE FAILURES LISTED ARE FAILURE TO FILE RETURN OF INCOME UNDER SECTION 139 OF THE ACT, FAIL URE TO RESPOND TO A NOTICE ISSUED UNDER SECTION 142(1), FAILURE TO RESP OND TO A NOTICE ISSUED UNDER SECTION 148 AND FAILURE TO DISCLOSE FULLY AND TRULY MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. THE QUESTION IS WHET HER THE ASSESSEE HERE HAD FAILED ON ANY OF THE ABOVE. ASSESSEE HAD FILED RETURN ORIGINALLY UNDER SECTION 139 OF THE ACT. THERE IS NO CASE FOR THE REVENUE THAT IT HAD NOT RESPONDED TO NOTICE UNDER SECTION 142(1) OF THE ACT. THERE IS NO CASE FOR THE REVENUE THAT ASSESSEE HAD NOT RESPONDE D TO NOTICE ISSUED UNDER SECTION 148 OF THE ACT, SINCE ALREADY ONE RE- ASSESSMENT HAS BEEN DONE. THERE IS NO CASE THAT ASSESSEE DID NOT DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY TO ITS ASSESSMEN T. THE CLAIM OF THE ASSESSEE UNDER SECTION 80HHC WAS ORIGINALLY ALLOWED AFTER CONSIDERING ALL THE ASPECTS OF THE CASE. WITHOUT ANY FAILURE O N THE PART OF THE ASSESSEE, BY CITING A DECISION OF HONBLE APEX COUR T, IN OUR OPINION, RE- OPENING COULD NOT HAVE BEEN RESORTED TO. IT WAS HE LD BY HONBLE CALCUTTA HIGH COURT IN THE CASE OF TANTIA CONSTRUCT ION COMPANY LTD. (SUPRA), THAT NOT ONLY ESCAPEMENT OF INCOME WAS NEC ESSARY, BUT SUCH ESCAPEMENT OUGHT HAVE RESULTED ON ACCOUNT OF FAILUR E OF THE ASSESSEE OF THE TYPE MENTIONED IN PROVISO TO SECTION 147, EVEN WHEN THE 8 I.T.A. NOS.130 & 131/MDS/12 ESCAPEMENT IS IMPUTED BASED ON AN EXPLANATION OF LA W BY HONBLE APEX COURT. NO DOUBT, THE REVENUE HAS CITED THE DECISIO N OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF JAWAND SONS ( SUPRA), WHERE IT WAS HELD AS UNDER:- DURING THE COURSE OF ARGUMENTS, LEARNED COUNSEL FOR THE APPELLANT- ASSESSEE COULD NOT CONTROVERT THE LEGAL POSITION TH AT IN VIEW OF THE DECISION OF THE SUPREME COURT IN STERLING FOODS CA SE [1999] 237 ITR 579 AND THE DECISION OF THIS COURT IN LIBERTY INDI AS CASE [2007] 293 ITR 520, NO DEDUCTION ON ACCOUNT OF THE DUTY DRAWBACK AND THE DUTY ENTITLEMENT PASS BOOKS SCHEME (HEREINAFTER REF ERRED TO AS DEPB) UNDER SECTION 80-IB OF THE ACT CAN BE ALLOWED. IT IS ALSO CONCEDED POSITION THAT THE JUDGMENT OF THIS COURT I N LIBERTY INDIAS CASE [2007] 293 ITR 520 HAS BEEN AFFIRMED BY THE APEX COURT I N LIBERTY INDIA V. CIT [2009] 317 ITR 218. FROM THIS, IT IS CLEAR THAT IN THE INITIAL ASSESSMENT, THE BENEFIT OF DEDUCTION OF THE DUTY DRAWBACK AND DEPB UNDER SECTION 80-IB OF THE ACT WAS WRONGLY GRANTED TO THE APPELLANT-ASSESSEE, FOR WHICH HE WAS NOT ENTITLED. HOWEVER, LEARNED COUNSEL FOR THE APPELLANT-ASSESSEE ARGUED THAT INITIATION OF THE REASSESSMENT PROCEEDINGS WAS NOT IN CONSONANCE WITH THE REQUIREMENT OF SECTIONS 147 AND 148 OF THE ACT . LEARNED COUNSEL ARGUED THAT THE ASSESSING OFFICER WAS NOT J USTIFIED IN REOPENING THE ASSESSMENT, MERELY ON THE BASIS OF CH ANGE OF OPINION, AND WHILE FRAMING THE OPINION THAT SOME INCOME CHAR GEABLE TO TAX HAS ESCAPED ASSESSMENT ON ACCOUNT OF NON-DISCLOSURE OF FULLY AND TRULY OF ALL MATERIAL FACTS NECESSARY FOR ASSESSMEN T FOR THE RELEVANT ASSESSMENT YEAR. THEREFORE, HE SUBMITTED THAT AS F AR AS THE ASSESSEE IS CONCERNED, HE HAS FULLY DISCLOSED ALL T HE MATERIAL FACTS NECESSARY FOR ASSESSMENT. THE AUDIT REPORT AS WELL AS THE ACCOUNTS WERE SHOWN AND IN NO WAY, IT CAN BE SAID THAT THE A SSESSEE HAD NOT DISCLOSED THE RELEVANT FACTS. THUS, THE INITIATION OF PROCEEDINGS OF REASSESSMENT ITSELF WAS BAD AND THE ORDERS PASSED I N THE SAID PROCEEDINGS ARE LIABLE TO BE SET ASIDE. LEARNED CO UNSEL ARGUED THAT WHILE TAKING THE WRONG INTERPRETATION OF THE PROVIS O TO SECTION 147 OF THE ACT, THE INCOME-TAX APPELLATE TRIBUNAL HAS WR ONGLY COME TO THE CONCLUSION THAT THE REASSESSMENT PROCEEDINGS WE RE RIGHTLY INITIATED, WHEREAS, THE REVENUE HAS NOT DISCHARGED THE ONUS FOR 9 I.T.A. NOS.130 & 131/MDS/12 BRINGING ON RECORD THE MATERIAL TO SHOW THAT DISCLO SURE WAS NOT MADE FULLY AND TRULY. AFTER HEARING LEARNED COUNSEL FOR THE APPELLANT-ASS ESSEE AND GOING THROUGH THE ORDER PASSED BY THE INCOME-TAX APPELLATE TRIBUNAL, WE DO NOT FIND ANY GROUND TO INTERFERE IN THIS APPEAL, AS IN OUR OPINION NO SUBSTANTIAL QUESTION OF LAW IS ARISING IN THIS APPE AL, BECAUSE A PURE FINDING OF ACT HAS BEEN RECORDED TO THE EFFECT THAT THE REASSESSMENT PROCEEDINGS HAVE RIGHTLY BEEN INITIATE D AFTER FRAMING THE OPINION THAT SOME INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. UNDER SECTION 147 OF THE ACT, AFTER ITS AMENDMENT WITH EFFECT FROM APRIL 1, 1989 WIDE POWER HAS BEEN GIV EN TO THE ASSESSING OFFICER EVEN TO COVER CASES WHERE THE ASS ESSEE HAD FULLY DISCLOSED THE MATERIAL FACTS. THE ONLY CONDITION F OR ACTION IS THAT THE ASSESSING OFFICER SHOULD HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. SUCH BELI EF CAN BE REACHED IN ANY MANNER, AND IS NOT QUALIFIED BY A PR E-CONDITION OF FULL AND TRUE DISCLOSURE OF MATERIAL FACTS BY THE ASSESS EE AS CONTEMPLATED IN THE PRE-AMENDED SECTION 147(A) OF THE ACT. IN THE INSTANT CASE, AS FAR AS THE MERITS OF THE CASE IS C ONCERNED, WITH REGARD TO THE PERMISSIBLE DEDUCTION UNDER SECTION 80 -IB OF THE ACT, IT IS CLEAR POSITION THAT THE ASSESSEE WAS NOT ENTI TLED TO CLAIM DEDUCTION ON ACCOUNT OF DUTY DRAWBACK AND DEPB INCEN TIVES, AS THESE INCENTIVE PROFITS DO NOT FALL WITHIN EXPRESSION PRO FITS DERIVED FROM INDUSTRIAL UNDERTAKING IN SECTION 80-IB OF THE ACT. THEREFORE, DUTY DRAWBACK AND DEPB DO NOT FORM PART OF NET PROFITS OF THE INDUSTRIAL UNDERTAKING FOR THE PURPOSES OF SECTION 80-IB OF THE ACT. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY ILLEGALITY IN THE IMPUGNED ORDER AND IN OUR OPINION, NO SUBSTANTIAL QUESTION O F LAW IS ARISING FROM THE IMPUGNED ORDER OF THE INCOME-TAX APPELLATE TRIBU NAL. 8. THE HONBLE PUNJAB AND HARYANA HIGH COURT REFUSE D TO INTERFERE WITH THE ORDER OF THE TRIBUNAL FOR A REASON THAT NO SUBSTANTIAL QUESTION OF LAW AROSE IN THE SAID APPEAL. THEIR LORDSHIP HELD THAT AFTER THE AMENDMENT MADE IN THE SAID SECTION WITH EFFECT FROM 1 ST APRIL, 1989, WIDER POWER WAS THERE WITH THE ASSESSING OFFICER, W HEN COMPARED TO 10 I.T.A. NOS.130 & 131/MDS/12 THE EARLIER PRE-AMENDED POSITION. THE REASON FOR T AKING THIS VIEW, IN OUR OPINION, IS THAT XPLANATION 1 CLEARLY MENTIONED TH AT PRODUCTION OF BOOKS OF ACCOUNTS OR OTHER EVIDENCE FROM WHICH MATERIAL E VIDENCE COULD WITH DUE DILIGENCE BE GATHERED, WOULD NOT AMOUNT TO DISC LOSURE WITHIN THE MEANING OF PROVISO. AS AGAINST THIS, IN THE GIVEN CASE, WE DO NOT FIND ANY FAILURE OF THE ASSESSEE OF THE TYPE MENTIONED I NTEREST THE PROVISO. IN THE CASE OF CHANDIRAM (SUPRA), HONBLE RAJASTHAN HI GH COURT WAS EXAMINING WHETHER PRONOUNCEMENT OF LAW BY THE HONB LE APEX COURT WOULD AMOUNT TO INFORMATION UNDER SECTION 147(B) OF THE ACT, AS IT STOOD THEN. HERE, ON THE OTHER HAND, RE-ASSESSMENTS WERE NOT INITIATED UNDER SECTION 147(B) OF THE ACT FOR A REASON THAT THE SAI D SECTION STOOD SUBSTITUTED BY DIRECT TAX LAWS (AMENDMENT) ACT, 198 7 WITH EFFECT FROM 1.4.89. NO DOUBT, AN EXPOSITION OF LAW BY HONBLE APEX COURT WOULD DECLARE THE LAW AS IT STOOD ALL THE TIME AND COULD BE A BASIS FOR RECTIFICATION PROCEEDINGS UNDER SECTION 154 OF THE ACT. BUT, IN OUR OPINION, IT CANNOT BE A BASIS FOR RESORTING TO A RE OPENING WHERE SUCH REOPENING IS DONE AFTER THE EXPIRY OF FOUR YEARS FR OM THE END OF RELEVANT PREVIOUS YEAR UNLESS AND UNTIL THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE. WE ARE THUS OF THE OPINION THAT THE ASSE SSEE HAS TO SUCCEED IN THESE APPEALS. 11 I.T.A. NOS.130 & 131/MDS/12 9. SINCE WE HAVE ALLOWED THE GROUND RELATING TO JUR ISDICTION, WE ARE NOT DEALING WITH THE ISSUE REGARDING EXCLUSION OF D UTY DRAWBACK AND DEPB LICENCE SALE FOR THE PURPOSE OF COMPUTING DEDU CTION UNDER SECTION 80-IB OF THE ACT. 10. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE PARTLY ALLOWED. ORDER WAS PRONOUNCED IN THE COURT ON MONDAY, THE 25 TH OF JUNE, 2012, AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (ABRAHAM P. GEORGE) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 25 TH JUNE, 2012. KRI. COPY TO: (1) APPELLANT (2) RESPONDENT (3) CIT(A)- IX, CHENNAI-34 (4) CIT-VIII, CHENNAI-34 (5) D.R. (6) GUARD FILE