ROLLATAINERS LTD. Vs. DEPUTY COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner is a company incorporated under the Companies Act, 1956 and is engaged, inter alia, in the business of manufacturing of packing materials. It filed the return of income for the assessment year 2003-04 declaring a loss of '2.48 crores. The return was accompanied by the computation sheet, profit and loss account and balance sheet as on 31.3.2003. The assessment was completed on 24.03.2006 under section 143(3) of the Income Tax Act at a loss of Rs. 11.32 crores. An appeal against the assessment is stated to be pending. On 31.8.2007, the respondent issued a notice under Section 148 reopening the assessment on the ground that income chargeable to tax had escaped assessment. Pursuant to the said notice, a reassessment was completed under Section 147/143(3) on 23.12.2008 in which an addition of '2.45 crores was made, which is also to be challenged in appeal before the Income Tax Appellate Tribunal.

(2.) On 26.03.2010 another notice under Section 148 was issued reopening the assessment. The reasons recorded by the assessing officer under Section 148(2) for reopening the assessment are as follows: -

(3.) The short question before us is whether the notice issued under Section 148 on 26.3.2010, beyond the period of four years from the end of the assessment year 2003-04, is without jurisdiction. Under the first proviso to Section 147, an assessment made under Section 143(3) can be reopened beyond the period of four years from the end of the relevant assessment year only if income chargeable to tax had escaped assessment due to the failure of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year. Explanation 1 below the Section says that "production before the assessing officer of account books or other evidence from which material evidence could with due diligence have been discovered by the assessing officer will not necessarily amount to disclosure within the meaning of the foregoing proviso". We have to therefore, examine what the disclosure was by the assessee at the time of the original assessment.