SILVER OAK LABORATORIES (P) LTD Vs. DCIT

JUDGEMENT

(1.) The petitioner is aggrieved by the initiation of re-assessment proceedings under Section 147 of the Income-tax Act, 1961. The petitioner had filed the return of income on 30.12.1999 declaring a total loss of Rs 5,55,80,254/- which was processed under Section 143 (1) on 29.09.2000. Subsequently, by a notice dated 01.03.2006 issued under Section 148 of the said Act, the assessment in respect of the assessment year 1999-2000 was proposed to be re-opened. The reasons recorded for the re-opening of the assessment were recorded on 21.02.2006 and were supplied to the petitioner on 08.11.2006. The said reasons are as under:-

(2.) The petitioner filed its objections on 10.11.2006. From the reasons recorded, it is apparent that nothing specific was alleged with regard to any escapement of assessment pertaining to the assessment year 1999-2000. Apparently, the reasons for re-opening the assessment were that in respect of the assessment years 1998-99 and 2001-02, additions had been made by the Assessing Officer in the course of the assessments on account of the allegations of suppression of sales. The allegation was that the sale price of the petitioner's products were not driven by market forces. Consequently, in respect of those years, i.e., assessment years 1998-99 and 2001-02, the sales figures were recomputed by taking net profit of 8% and additions were made on that account at the time of issuance of the notice under Section 148 as well as the recording of the reasons. The additions made by the Assessing Officer had been confirmed by the Commissioner of Income-tax (Appeals) in respect of the said assessment years, i.e., 1998-99 and 2001-02. However, by the time the petitioner filed its objections, the tribunal had deleted the said additions in appeals before it. This fact was brought to the notice of the Assessing Officer by the petitioner in the objections itself. It is also relevant to note that the revenue has not preferred any appeal against the order passed by the Income-tax Appellate Tribunal deleting the additions on merits in respect of the assessment years 1998-99 and 2001-02. But, the Assessing Officer passed the order dated 17.11.2006 rejecting the objections preferred by the petitioner. The order dated 17.11.2006 is impugned before us and it reads as under:-

(3.) We have heard the counsel for the parties. It is apparent that the reasons recorded do not contain any specific allegation with regard to the year in question, i.e., the assessment year 1999-2000. The sole and entire basis of re-opening the assessment is the additions made in respect of the assessment years 1998-99 and 2001-02. There is no other reason given by the Assessing Officer for re-opening the assessment. Since the tribunal has already deleted the additions in respect of the assessment years 1998-99 and 2001-02, the very basis for continuing any further with the re-assessment proceedings does not survive any more. We have also indicated above that there is no specific allegation with regard to the assessment year 1999-2000 regarding suppression of sale figures.