CIT Vs. ECO MEDIA (P) LIMITED

JUDGEMENT

(1.) TAX Case (Appeal) is filed at the instance of the Revenue against the order of the Tribunal. The above Tax Case (Appeal) is in respect of assessment year 1993-94 and the same is admitted on the following substantial question of law:-

(2.) THE assessee is a private limited company. The assessee received a sum of Rs.2,29,420/- being an award money for its film "Silent Valley" "An Indian Rain Forest" and claimed exemption under Section 10 (17a) of the Income Tax Act. The original assessment was completed under Section 143(3) of the Income Tax Act on 7.9.1995 and the loss was determined at Rs.38,960/-. Admittedly, the receipt of the award money was disclosed in the balance sheet under the head of "Notes on Account". However, during the course of audit, the audit parties pointed out the error that excess deduction/ relief has been granted to the assessee company on the price money, it being given by Earth Vision, 1992, Tokyo Global Entertainment Film Festival and not from the Government of India. The assessment was sought to be re- opened. Notice under Section 148 of the Act was issued on 26.5.2001. The assessee resisted the said notice by taking objection as to the limitation as provided in proviso to Section 147 of the Act. The assessee pointed out that since there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment, as per Section 147 of the Act, reopening of the assessment beyond the period of four years from the end of relevant assessment year was bad in law. However, the claim of the assessee on the jurisdictional aspect as well as, as regards the exemption for award was rejected by the Revenue on the ground that no approval had been obtained from the Central Government for the award.

(3.) AS regards reopening of the assessment on the basis of the audit objection, the first Appellate Authority pointed out that AG(Audit) had not explained any provisions of law in the said objection but had merely pointed out certain factual mistakes. Thus the reopening of the assessment on the basis of factual error pointed out by Audit could not be faulted with. Thus, the Commissioner of Income Tax (Appeals) rejected the plea of the assessee and dismissed the appeal. Aggrieved by the same, the assessee went on further appeal before the Income Tax Appellate Tribunal.