JOINT COMMISSIONER OF INCOME TAX COMPANY CIRCLE 1 MADURAI Vs. THIAGARAJAR MILLS P LTD KAPPALUR MADURAI

JUDGEMENT

(1.) These Writ Appeals are filed challenging the order dated 28.9.2010 made in W.P. (MD) Nos. 1938 of 2009 and W.P. (MD). No. 10867 of 2010; wherein notices dated 31.3.2006 and 27.3.2008 respectively issued by the appellants herein under Section 148 of the Income Tax Act, 1961, (hereinafter referred to as "the Act"), were quashed. The case of the respondent in W.A. (MD). No. 1630 of 2011 before the learned single Judge was that the respondent mill was assessed to income tax. The respondent mill filed its return of income for the assessment year 2000-2001, relating to the accounting year ended, on 28.11.2000, admitting a total income of Rs. 28,18,050/- under the special provisions of Section 115(JA) of the Act, 1961, as the income computed under the normal provisions of the Act was nil. The Assessing Officer issued a notice under Section 143(2) of the Act for detailed scrutiny and the respondent mill filed all the required details. After scrutiny of all the records, the Assessing Officer satisfied and completed the regular assessment under Section 143(3) of the Act, on 10.3.2003, computing a total income of Rs. 1,21,28,033. As against the said assessment, the respondent mill preferred an appeal. After the expiry of five years, the respondent mill received a notice on 31.3.2006, which was issued under Section 148 of the Act, directing the respondent mill to submit return of income in the prescribed form within a period of thirty days from the date of receipt of the said notice on the ground that the Assessing Officer has reason to believe that the income of the respondent mill chargeable to tax had escaped assessment within the meaning of Section 147 of the Act.

(2.) It was the further case of the respondent mill that the said notice nowhere indicates about the approval of the Commissioner of Income Tax - I, Madurai. The respondent mill sent a reply on 2.5.2006 under protest and requested the Assessing Officer to disclose the reasons recorded for initiating action under Section 147 of the Act. It was replied by the appellant that it was excessive claim under Section 80(HHC) of the Act- Again, a further detailed reply was requested by the respondent mill. On 26.6.2006, a reply was received by the respondent mill stating that subsequent to the amendment to Section 80(HHC) of the Act, assessee, having export turn over of more than Rs. 10 crores, who cannot prove that for profit from sale of DEPB license, they have choice between. DEPB and duty drawback and the rate of DEPB was lower than duty drawback, are not eligible for increasing the business profit by 90% of DEPB profit. It was further stated in the said reply that the said notice was issued after obtaining prior approval of the Commissioner of Income Tax, Madurai.

(3.) According to the learned counsel for the respondent mill, the respondent mill had disclosed all details necessary for computation under normal provisions as well as the special provisions of Section 115(JA) of the Act. There was no failure on the part of the assessee to disclose primary facts and there is no such allegation to that effect in the notice. It was also contended that the re-assessment proceedings can be issued under Section 147 of the Act, if there is failure on the part of the assessee to disclose primary facts necessary for the assessment and if there is no such allegation, the assessment already made cannot be reopened for re-assessment, after expiry of four years from the last date of the relevant assessment years and the said issue has already been concluded in several decisions.