Mr. Subhash B. Mutha, Pune V. ITO, Pune

ITA 415/PUN/2009

• Counselvise Citation: 41524514 RSA 2009
• Duration Of Justice: 2 year(s) 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 08-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Keywords: Reopening of assessment; Business income; Depreciation; Salary income; Wrong claim; Reason to believe
• Section: 143(3); 142(1); 80HHC; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI I C SUDHIR, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO 415/PN/09 (ASSTT. YEAR 2001-02) SUBHASH B MUTHA, .. APPELLAN T 123 NANA PETH, PUNE PAN AECPM 7019K VS. INCOME-TAX OFFICER, .. RESPONDENT WD 2(3), PUNE APPELLANT BY: SMT DEEPA KHAR E RESPONDENT BY: SHRI S K AMBASTHA DATE OF HEARING : 25.08.2011 DATE OF PRONOUNCEMENT : .09.2011 ORDER PER G.S. PANNU, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE D ATED 24.02.2009, WHICH IN TURN HAS ARISEN FROM AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 143(3) R W S 147 OF THE INCOME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE A SSESSMENT YEAR 2001-02. 2. IN THIS APPEAL, THE FIRST AND THE FOREMOST PLEA RA ISED BY THE ASSESSEE IS IN REGARD TO THE VALIDITY OF THE PROCEEDINGS INITIATED B Y THE ASSESSING OFFICER BY INVOKING SECTION 147 OF THE ACT FOR REOPENING THE ASSESSME NT BEYOND THE PERIOD OF FOUR YEARS. 3. BRIEFLY PUT THE FACTS ARE THAT THE ASSESSEE IS AN IND IVIDUAL DEALING IN EXPORT OF CHEMICALS AS ALSO DERIVING INCOME UNDER THE HEAD SA LARIES AND OTHER SOURCES. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, HE FILED A RETURN OF INCOME 2 DISCLOSING TOTAL INCOME OF RS 12,79,428/- WHICH, INTER ALIA , INCLUDED A CLAIM OF DEDUCTION UNDER SECTION 80HHC OF THE ACT AMOUNTING TO RS 1,91,97,447/-. THE RETURN OF INCOME WAS SUBJECTED TO SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 31.12.2003 WHEREIN TOTAL IN COME WAS ASSESSED AT RS 12,75,428/- AND THE CLAIM OF DEDUCTION UNDER SECTION 80 HHC WAS ACCEPTED AS SUCH AT RS 1,91,97,447/-. SUBSEQUENTLY, A NOTICE UNDER SE CTION 148 OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER ON 6.10.2006 TO REOPEN THE ASSESSMENT AFTER RECORDING REASONS PURPORTEDLY ON THE GROUND THAT EXCESSIVE DEDUCTION UNDER SECTION 80HHC WAS ALLOWED IN THE ASSESSMENT AND, THE REFORE, TO THAT EXTENT INCOME HAD ESCAPED ASSESSMENT. THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING OF ASSESSMENT READ AS UNDER: REASONS FOR REOPENING OF ASSESSMENT IN HIS CASE, THE I.T RETURN FOR A.Y 2001-02 WAS FI LED ON 5.10.2001, DECLARING TOTAL INCOME RS 12,79,428/- + AGRICULTURE INCOME RS 1,50, 000/-. THE RETURN WAS PROCESSED UNDER SECTION 143(1) ON 31.3.2003. THE CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT U/S 143(3) WAS COMPLETED ON 31.12.2003 TOTAL INCOME OF RS 12,79,428 + AGRICU LTURE INCOME OF RS 1,50,000/-. IN COMPUTATION OF INCOME, THE ASSESSEES CLAIM OF D EDUCTION U/S 80HHC AMOUNTING TO RS 1,91,97,447/- WAS ALLOWED. IT IS NOW OBSERVED THAT THE ASSESSEE HAS CLAIMED D EDUCTION U/S 80HHC ON TOTAL INCOME WHICH INCLUDES INCOME FROM SALARY AND INCOME FROM OTHER SOURCES. THE DEDUCTION U/S 80HHC IS TO BE ALLOWED ON INCOME FROM EXPORT BUSINESS ONLY. INCOME FROM SALARY RS 6,15,265/- INCOME FROM OTHER SOURCES RS 52,35,809/- TOTAL RS 58,51,074/- INCOME FROM BUSINESS RS 1,46,77,450/- 80HHC ALLOWABLE (RESTRICTED TO BUSINESS INCOME) RS 1,46,77,450/- ALLOWED IN ASSESSMENT RS 1,91,97,447/- EXCESS DEDUCTION ALLOWED RS 45,19,997/- I HAVE THEREFORE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AS MUCH AS EXCESS DEDUCTION U/S 80HHC HA S BEEN ALLOWED TO THE ASSESSEE TO THE EXTENT OF RS 45,19,997/-. IN VIEW OF THE ABOVE, THE ASSESSMENT FOR AY 2001-0 2 IS REQUIRED TO BE REOPENED BY ISSUING NOTICE U/S 148 OF THE ACT. 4. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMI TTED THAT IN THIS CASE THE ASSESSMENT IS SOUGHT TO BE REOPENED AFTER AN EXPI RY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND THE ORIGIN AL ASSESSMENT HAVING 3 BEEN FINALISED UNDER SECTION 143(3) OF THE ACT, THE R EOPENING IS JUSTIFIED ONLY AFTER FULFILMENT OF THE CONDITIONS PRESCRIBED IN THE FIRST PRO VISO TO SECTION 147 OF THE ACT. THE PLEA SET-UP BY THE APPELLANT IS THAT THERE IS NO F AILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR HIS ASSESSMENT AND, THEREFORE, INVOKING OF SECTION 147 OF THE ACT IN THE PRESENT CASE IS UNTENABLE. IN ORDER TO APPRECIATE THE AFORESAID, IT WOULD BE APPROPRIATE AT THIS STAGE TO REPRODUCE THE RELEVANT PORTION OF SECTION 147 OF THE ACT, WHICH IS AS UNDER: 147. IF THE ASSESSING OFFICER HAS REASON TO BELIEV E THAT 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 OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDE R THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANC E, AS THE CASE MAY BE, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTIO N AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR): 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 ASS ESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSE E 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 NECESSA RY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR: PROVIDED FURTHER THAT THE ASSESSING OFFICER MAY ASS ESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVING MATTERS WHICH ARE THE SUB JECT-MATTER OF ANY APPEAL, REFERENCE OR REVISION, WHICH IS CHARGEABLE TO TAX AND HAS ESC APED ASSESSMENT. EXPLANATION I: PRODUCTION BEFORE THE ASSESSING OFFI CER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DU E DILIGENCE HAVE BEEN DISCOVERED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT T O DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2 FOR THE PURPOSES OF THIS SECTION, T HE FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARGEABLE TO TAX AS ESCAPED ASS ESSMENT, NAMELY:- (A) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INCOME OF AY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX; (B) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED BY THE A SSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAI MED EXCESSIVE LOSS, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN; (C) WHERE AN ASSESSMENT HAS BEEN MADE, BUT- (I) INCOME CHARGEABLE TO TAX HAS BEEN UNDER-ASSESSE D; OR (II) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RAT E; OR (III) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCE SSIVE RELIEF UNDER THIS ACT; OR (IV) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE ON AN Y OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED. ACCORDING TO THE LEARNED COUNSEL FOR THE APPELLANT, TH E ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80HHC OF THE ACT DISCLOSING COMPLE TE FACTS AS PER ITS 4 COMPUTATION OF INCOME ATTACHED, COPIES OF WHICH HAVE BE EN PLACED AT PAGES 3-4 OF THE PAPER BOOK. IT IS ALSO POINTED OUT THAT EVEN DU RING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, IN REPLY TO AN INFORMATION SOUGHT BY THE ASSESSING OFFICER UNDER SECTION 142(1) OF THE ACT, THE ASSESSEE HAD FURNISHED A DETAILED REPLY VIDE COMMUNICATION DATED 8.9.2003 , COPY OF WHI CH HAS ALSO BEEN PLACED IN THE PAPER BOOK AT PAGES 13-24. SUCH INFORMATION RELATE D TO THE DETAIL OF EXPORTS MADE. MOREOVER, IT IS SUBMITTED THAT EVEN THE REASONS RECORDED DO NOT SHOW ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE APPEARING FOR THE REVENUE HAS SUBMITTED THAT IN THE REASONS RECOR DED, THE ASSESSING OFFICER HAS PRIMA FACIE POINTED OUT THAT EXCESSIVE DEDU CTION UNDER SECTION 80HHC OF THE ACT HAS BEEN ALLOWED IN THE ASSESSMENT FINA LIZED UNDER SECTION 143(3) OF THE ACT ON 31.12.2003 AND, THEREFORE, THE ASSESSING OFFICER WAS QUITE JUSTIFIED IN INITIATING PROCEEDINGS UNDER SECTION 147/14 8 OF THE ACT. IT IS FURTHER POINTED OUT THAT A WRONG CLAIM MADE BY THE ASSESSEE WHICH LEADS TO AN ESCAPEMENT OF INCOME IS A GOOD GROUND FOR INITIATION O F PROCEEDINGS UNDER SECTION 147/148 OF THE ACT. 6. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIONS. I N THIS CASE, THE ASSESSEE HAD FURNISHED A RETURN OF INCOME FOR THE ASSESSMENT YEAR 2001-02 ON 5.10.2001 WHICH WAS SUBJECTED TO A SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT ON 31.12.2003. IN THE ASSESSMENT SO FINALIZED, T HE ASSESSEE WAS ALLOWED DEDUCTION UNDER SECTION 80HHC OF THE ACT OF RS 1,91,97,4 47/-, AS CLAIMED BY THE ASSESSEE IN THE RETURN OF INCOME. THE SAID ASSESSMENT IS SOUG HT TO BE REOPENED BY THE ASSESSING OFFICER VIDE ISSUE OF NOTICE UNDER SECTION 148 ON 6.10.2006 ON THE GROUND THAT AN INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT BY REASON OF EXCESS ALLOWANCE OF DEDUCTION UNDER SECTION 80HHC OF T HE ACT. IN TERMS OF FIRST PROVISO TO SECTION 143(3) OF THE ACT, THE ASSESSING O FFICER IS ENTITLED TO REOPEN AN ASSESSMENT IF INCOME CHARGEABLE TO TAX HAS ESCAPE D ASSESSMENT BY 5 REASONS OF FAILURE ON THE PART OF THE ASSESSEE TO (I) M AKE A RETURN UNDER SECTION 139 OR (II) IN RESPONSE TO A NOTICE ISSUED UNDER SECTION 1 42(1) OR 148 OR (III) TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR H IS ASSESSMENT FOR THAT ASSESSMENT YEAR. IN THE PRESENT CASE, THERE IS NO DISPUTE THAT IN SO FAR AS SITUATIONS ENUMERATED IN (I) AND (II) ARE CONCERNED, TH E SAME ARE NOT ATTRACTED. THE CASE MADE OUT IS THAT IN THE REASONS RECORDED, THE A SSESSING OFFICER HAS NOT CHARGED THE ASSESSEE WITH FAILURE TO DISCLOSE FULLY AND TR ULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT FINALIZED UNDER SECTION 143(3) O F THE ACT ON 31.12.2003. IN THIS CONTEXT, WE HAVE CAREFULLY EXAMINE D THE REASONS RECORDED BY THE ASSESSING OFFICER FOR THE FORMATION OF BELIEF THAT CERTAIN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE REASONS INTER ALIA CONTAIN AN ASSERTION THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER SECTION 80HHC OF THE AC T ON TOTAL INCOME WHILE SUCH DEDUCTION WAS TO BE ALLOWED ONLY WITH RESPECT TO INCOME FROM EXPORT BUSINESS. ON THIS BASIS, THE ASSESSING OFFICER HAS OBSERVED IN THE REASONS RECORDED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSM ENT AS EXCESSIVE DEDUCTION UNDER SECTION 80HHC HAS BEEN ALLOWED TO THE A SSESSEE. IT IS QUITE PERTINENT THAT IN THE REASONS RECORDED, WHICH HAVE BEEN REPRODUCED BY US IN EARLIER PART OF THIS ORDER, THERE IS NO CHARGE MADE OU T THAT THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT, WHILE OSTENSIBLY SUCH A PRESCRIPTION IS NECESSARY IN VIEW OF THE FIRST PROVISO TO SECTION 147 OF THE ACT AS THE NOTICE UNDER SECT ION 148 IS SOUGHT TO BE ISSUED ON 6.10.2006,WHICH IS CLEARLY AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IN THIS VIEW OF THE MATTE R, THE INITIATION OF PROCEEDINGS UNDER SECTION 147 OF THE ACT IS NOT SUSTAINAB LE IN LAW AND IS LIABLE TO BE SET ASIDE. 7. ON THIS POINT, WE MAY REFER TO THE ARGUMENT PUT-F ORTH BY THE LEARNED DEPARTMENTAL REPRESENTATIVE THAT THE CLAIM OF DEDUCTIO N UNDER SECTION 80HHC WHICH STOOD ALLOWED WAS WRONG AND THUS THE ESCAPEMENT OF INCOME WITHIN THE MEANING OF SECTION 147 OF THE ACT STOOD ESTABLISHED. IN OTHER WORDS, AS PER THE 6 LEARNED DEPARTMENTAL REPRESENTATIVE THE ASSESSEE MADE A WRONG CLAIM WHICH HE WAS NOT ENTITLED TO AND, THEREFORE, THE ESCAPEMENT OF INCOME WITHIN THE MEANING OF SECTION 147 STOOD ESTABLISHED. IN OUR CONSIDE RED OPINION, A SIMILAR SITUATION HAD ARISEN BEFORE THE HONBLE BOMBAY HIGH C OURT IN THE CASE OF TITANOR COMPONENTS LTD. V. ACIT ETC. VIDE WRIT PETITION NO. 71 OF 2005 DATED 09.06.2011 AND IT HAS BEEN RELIED UPON BY THE ASSESSEE BEFORE US AN D FOLLOWING OBSERVATIONS OF THE HONBLE COURT ARE WORTHY OF NOTICE : HAVING REGARD TO THE PURPOSE OF THE SECTION, WE A RE OF THE VIEW THAT THE POWER CONFERRED BY SECTION 147 DOES NOT PROVIDE A FRESH O PPORTUNITY TO THE ASSESSING OFFICER TO CORRECT AN INCORRECT ASSESSMENT MADE EAR LIER UNLESS THE MISTAKE IN THE ASSESSEE IS THE RESULT OF FAILURE OF THE ASSESSEE T O FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. INDEED, WH ERE THE ASSESSEE HAS FULLY DISCLOSED ALL THE MATERIAL FACTS, IT IS NOT OPEN FO R THE ASSESSING OFFICER TO RE-OPEN THE ASSESSMENT ON THE GROUND THAT THERE IS A MISTAK E IN ASSESSMENT. MOREOVER, IT IS NECESSARY FOR THE ASSESSING OFFICER TO FIRST OBSERVE WHETHER THERE IS A FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR ASSESSMENT AND HAVING OBSERVED THAT THERE IS SUCH A FAILURE TO PROCEED UN DER SECTION 147. IT MUST FOLLOW THAT WHERE THE ASSESSING OFFICER DOES NOT RECORD SU CH A FAILURE HE WOULD NOT BE ENTITLED TO PROCEED UNDER SECTION 147. AS OBSERVED EARLIER, THE ASSESSING OFFICER HAS NOT RECORDED THE FAILURE ON THE PART OF THE PET ITIONER TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT YEA R 1997-98. WHAT IS RECORDED IS THAT THE PETITIONER HAS WRONGLY CLAIMED CERTAIN DEDUCTIONS WHICH HE WAS NOT ENTITLED TO. THERE IS A WELL KNOWN DIFFERENCE BETWE EN A WRONG CLAIM MADE BY AN ASSESSEE AFTER DISCLOSING ALL THE TRUE AND MATERIAL FACTS AND A WRONG CLAIM MADE BY THE ASSESSEE BY WITHHOLDING THE MATERIAL FACTS F ULLY AND TRULY. IT IS ONLY IN THE LATTER CASE THAT THE ASSESSING OFFICER WOULD BE ENT ITLED TO PROCEED UNDER SECTION 147. WE ARE SUPPORTED IN THIS VIEW BY A DECISION OF A DIVISION BENCH OF THIS COURT IN HINDUSTAN LEVEL LTD. V. R. B. WADKAR, ASSISTANT COMMISSIONER OF INCOME TAX([2004] 268 ITR 0332) WHERE IN A SIMILAR CASE TH E DIVISION BENCH HELD THAT REASON THAT THERE WAS A FAILURE TO DISCLOSE FULLY A ND TRULY THAT ALL MATERIAL FACTS MUST BE READ AS RECORDED BY THE ASSESSING OFFICER A ND IT WOULD NOT BE PERMISSIBLE TO DELETE OR ADD TO THOSE REASONS AND T HAT THE ASSESSING OFFICER MUST BE ABLE TO JUSTIFY THE SAME BASED ON MATERIAL RECORD. THE DIVISION BENCH OBSERVED AS FOLLOWS:- HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT O R MATERIAL WAS NOT DISCLOSED BY THE ASSESSEE FULLY AND TRULY NECESSARY FOR ASSESSMENT OF THAT ASSESSMENT YEAR, SO AS TO ESTABLISH THE VITAL LINK BETWEEN THE REASONS AND EVIDENCE. 8. ON THE BASIS OF THE AFORESAID DECISION, IT IS EVIDENT THAT THE HONBLE HIGH COURT HAS MADE OUT A DISTINCTION BETWEEN WRONG CLAIM MA DE BY THE ASSESSEE AFTER DISCLOSING ALL THE TRUE AND MATERIAL FACTS AND A WRONG CLAIM MADE BY THE ASSESSEE BY WITHHOLDING MATERIAL FACTS FULLY AND TRULY. IT IS ONLY IN THE LATTER SITUATION THAT THE ASSESSING OFFICER HAS BEEN HELD ENTIT LED TO PROCEED UNDER SECTION 147 OF THE ACT IN A CASE COVERED BY THE PROVISO B ELOW SECTION 147 OF THE ACT. EVEN IN THE CASE BEFORE US, AS IS DISCERNIBLE FROM TH E REASONS RECORDED BY 7 THE ASSESSING OFFICER, THERE IS NO CHARGE MADE OUT THAT T HERE IS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL THE TRUE AND MATERI AL FACTS NECESSARY FOR ASSESSMENT OF THE INSTANT ASSESSMENT YEAR. IN THE ABSENCE OF SUCH A RECORDING BY THE ASSESSING OFFICER, FOLLOWING THE PARITY OF REASONI NG PROPOUNDED BY THE HONBLE HIGH COURT IN THE CASE OF TITANOR COMPONENTS LTD. (SUPRA), THE PLEA RAISED BY THE LEARNED DEPARTMENTAL REPRESENTATIVE IS U NTENABLE. IN VIEW OF THE AFORESAID DISCUSSION, WE HOLD THAT THE NOTICE ISSUED BY TH E ASSESSING OFFICER UNDER SECTION 148 OF THE ACT ON 6.10.2006 IS UNSUSTAINAB LE AND IS LIABLE TO BE QUASHED AND SET ASIDE. WE HOLD SO. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED QUA THE PRELIMINARY ISSUE ITSELF AND THE OTHER GROUNDS RAISED IN THE APPEAL RELATING TO THE MERITS OF THE ADDITION ARE RENDERED ACADEMIC AND ARE NOT BEING ADJUDICATED. 10. RESULTANTLY, THE APPEAL OF THE ASSESSEE IS ALLOWED AS ABOVE. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 30 TH DAY OF SEPTEMBER, 2011. SD/- SD/- (I C SUDHIR) JUDICIAL MEMBER (G.S. PANNU) ACCOUNTANT MEMBER PUNE: DATED: 30 TH SEPTEMBER, 2011 B COPY OF THE ORDER IS FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT(A), 4. THE CIT, 5. THE D.R, A BENCH, PUNE 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT, PUNE BENCHES, PUNE 8