The Commissioner of Income Tax vs Habeeb Tanning Co.

F.M. Ibrahim Kalifulla, J.—The Revenue has come forward with the above appeal, raising the following substantial question of law:

Whether in the facts and circumstances of the case, the Tribunal was right in holding that the re-assessment proceedings u/s 147 to re-compute the deduction allowable u/s 80HHC in accordance with Section 80IB(13) and 80IA(9) was only a change on opinion.

Before considering the question of law raised by the appellant, we find that there is a basic impediment in entertaining this appeal on one other substantial question of law, namely that the very action of re-opening the assessment by invoking Section 147 of the Income Tax Act, was barred by limitation. Under the proviso to Section 147 of the Act, it is specifically stated that where an assessment under Sub-section (3) of Section 143 or u/s 147 of the Act, has been made for the relevant assessment year, no action should be taken u/s 147 of the Act, after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax as escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s 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 necessary for his assessment, for that assessment year.

It is not the case of the appellant that the present case falls under any of the exceptions set out in the said provision. The assessment is related to the year 2001�2002. Therefore, if at all the appellant wanted to make a re-assessment, the same should have been initiated on or before 31.03.2006, on which date the period of four years came to an end. Admittedly, the present action for re-assessment came to be initiated on 18.12.2006. Therefore, the very initiation of the proceedings for re-assessment having been hit by proviso to Section 147 of the Act, the whole of the proceedings have no legal support. Consequently, on this ground itself, this appeal fails and the same is dismissed.