Income Tax Appellate Tribunal - Hyderabad
Gulf Oil Corporation Limited,, ... vs Assessee on 20 May, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCH "B", HYDERABAD
BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND
SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER
ITA No. 999/Hyd/2013
Assessment Year: 2004-05
Gulf Oil Corporation, ... Appellant
Hyderabad.
(PAN - AAACG 8433 B)
Vs.
Asst. Commissioner of Income-tax, ...Respondent
Circle - 2(3), Hyderabad.
Assessee by : Shri Y. Ratnakar
Revenue by : Shri D. Sudhakar Rao
Date of Hearing : 20/05/2014
Date of Pronouncement : 20/05/2014
ORDER
PER CHANDRA POOJARI, A.M.:
This appeal of the assessee is directed against the order of the CIT(A)-III, Hyderabad dated 30/04/2014 for the AY 2004-05 wherein the assessee has raised the following grounds of appeal:
"1. The order of the learned Commissioner of Income tax(Appeals)III, Hyd. dt. 30-4-2013 is contrary to law and facts.
2. The appellant contends that the reopening of assessment uls 147 by issue of notice u/s 148 dt. 27-11-2009 is illegal, inasmuch as the assessment was reopened without the conditions precedent being satisfied.
3. The appellant contends that the reasons recorded are a mere pretence and there could not have been any reason to believe that income chargeable to tax has escaped assessment. In any event, there was no failure on the part of the appellant to disclose truly and fully all material facts in the assessment initially made u/s 143(3) of the IT Act. Since the reopening of assessment is illegal, the assessment order dt. 30-12-2010 passed u/s 143(3) read with section 147 of the IT Act is equally 2 ITA No. 999/Hyd/13 Gulf Oil Corporation illegal and should be annulled.
In the facts and circumstances of the case, there was no omission on the part of the appellant to disclose all material facts truly and correctly at the stage of the initial assessment.
5. The appellant contends that the learned Commissioner's observation that the assessment was reopened to give effect to the orders of the Hon'ble Tribunal is again erroneous and perverse. In the assessment already made there was no benefit or deduction granted warranting any withdrawal or warranting any adjustment based on the alleged orders of the Hon'ble Tribunal. In fact, it is not known what are these orders of the Hon'ble Tribunal referred to by the Commissioner of Income tax(Appeals) which warranted reopening of assessment.
6. The appellant contends that the Commissioner of Income tax failed to deal with what was the so called effect that needed to be given based on the orders of the Hon'ble Tribunal warranting reopening of assessment.
7 The appellant contends that the record of reasons recorded for reopening of assessment do not event suggest that there was any failure on the part of the appellant to disclose all material facts truly and fully. Before the learned Commissioner of Income tax various decided authorities were placed which state that where the reasons contain no satisfaction recorded by the Assessing Officer that there was any such omission on the part of the appellant to disclose all material facts truly and fully, the very reopening of assessment is illegal. It appears that the learned Commissioner of Income tax felt shy to deal with the decisions cited before him in support of the above legal aspect. The learned CIT(A) did not act judiciously in referring to the contentions raised by the appellant.
8. The appellant further contends that the order of the learned Commissioner of Income tax does not deal with the various authorities placed before him and also amendment to the Statute with effect from 1-10- 2009 making the provisions of section 50C of the IT Act applicable to unregistered documents prospectively after 1-10-2009 and not with any retrospective effect. The document giving rise to the capital gain was in fact an unregistered document. The learned Commissioner of Income tax being appellate authority should have considered the submission instead of ignoring the same even if he found it to be inconvenient. In any event, the order of the learned Commissioner of Income tax upholding the reopening of assessment u/s 148 of the IT Act is biased and capricious and 3 ITA No. 999/Hyd/13 Gulf Oil Corporation on the face of it perverse in nature.
9. The appellant contends that the provisions of Section 50C of the IT Act are not applicable for the purpose of computing capital gains of the appellant. F or the purpose of computing the capital gains, the sale consideration derived at Rs.30,50,00,000 should alone be considered and not the enhanced value of Rs. 59,84,95,120 by applying provisions of section 50C.
10. The appellant contends that the agreement being an unregistered document, the said provisions of Section 50C of the IT Act to unregistered documents is applicable prospectively with effect from 1-10-2009 as per the Finance Act (No.2), 2009 and not for earlier years.
11. It is contended that even as per the Board's circular reported in 314 ITR (Statute) 214), it is clarified that the amended provisions of section 50C of the IT Act apply only to unregistered documents which are executed only after 1-10- 2009 and not earlier and was cited before the learned CIT(A) through ignored by him. Therefore, the learned Commissioner of Income tax erred in confirming the calculation of capital gains by applying the provisions of section 50C of the IT Act for the assessment year 2004-05 when the said section was not in force at all and inapplicable for the assessment year 2004-05.
12 In any event, it is contended that the sale consideration of Rs.30,50,000 is a bonafide sale consideration actually received on the transfer of land. The said transfer is valid and a genuine transfer made for bonafide sale consideration. Where the transfer is genuine and the consideration received is fully stated and there is no allegation of any unrecorded sale consideration being paid, the provisions of section 50C of the IT Act will not be applicable even if it is presumed that the amendment made by the Finance Act no.2, 2009 is retrospective in nature.
13 The appellant contends that the indexed cost of acquisition should have been taken at Rs. 6,94,30,787 and not Rs. 2,88,40,578. The learned CIT failed to deal with the appellant's submission of revising the cost of acquisition based on the valuation report of the Registered Valuer.
14 It is contended that the learned commissioner should have deleted the disallowance of 3,16,00,000 as the entire amount represents gratuity paid to the Recognized Gratuity Fund in respect of employees who are to retire upon their superannuation as per company rules. The above gratuity paid does not pertain to any payment of gratuity to employees pursuant to any voluntary retirement. The learned commissioner should have therefore deleted the disallowance in entirety 4 ITA No. 999/Hyd/13 Gulf Oil Corporation instead of remitting the matter back to the assessing officer.
15. It is contended that the company has paid Rs.3,95,00,000/- to LIC Group Gratuity Fund towards liability for employees who retire upon superannuation. The above amount is paid based on the calculation by LIC Group Gratuity Fund on actuarial principles. The appellant has furnished during the course of assessment proceedings itself that the payment is made to LIC Group Gratuity Fund. The assessing officer ignored the said letter presumably by over sight. and there was therefore no necessity for the CIT(A) to have remitted back the matter to the assessing officer instead of deleting the disallowance of Rs.3,16,00,000/- straightaway on the facts obtaining in the case."
2. In Ground Nos. 2 to 8, the assessee challenged the reopening of the assessment by the assessing officer through the assumption of jurisdiction under section 147 of the Income Tax Act.
3. Briefly the facts relating to this ground are that for the assessment year 2004 - 05 the appellant company filed its return of income on 30/10/2004. The case was selected for scrutiny and an order under section 143(3) of the Income Tax Act was passed on 28/12/2006. Vide this order long-term capital gains were determined at Rs. 14,53,38,449/-. Thereafter notice under section 148 of the Income Tax Act was issued on 27/11/2009 to which the appellant responded and the new assessment proceedings began. The assessing officer conveyed the following reasons for reopening of the assessment to the appellant during the course of assessment proceedings:
"F.No.G.168/ACIT-2(3)/2004-05 Dt.22.07.2010 To The Principal Officer, M/s. Gulf Oil Corporation Ltd, P. O. No.1, Kukatpally, Hyderabad.
Sir, 5 ITA No. 999/Hyd/13 Gulf Oil Corporation Sub: Communication of reasons for Re-opening of Assessment u/s 147 - A.Y 2004-05 - Reg.
Ref: Your letter dated Please refer to the above As required by you the reasons for Re-opening your case u/s 147 of I.T. for A. Y. 2004-05 are communicated as under:
"During the curse of assessment proceedings of the Asst. Year 2005-06, noticed that the assessee sold lane "situated at Sanky Road in Bangalore to At Developers vide agreement dated 28/06/2003. As per this agreement, the land originally divided into two blocks namely Block A & B. Block A was transferred A. Y. 2004-05 and capital gains as offered to tax in the same year. Similarly, par Block B was transferred in the A. Y.2005-06 and the assessee has offered capital tax in the same year. While completing the assessment for A. Y.2005-06, the consideration of the land sold was reworked invoking the provisions of Sec. 50C and the capital has been reworked. Similar exercise has to be carried out for the A. Y 2004- 05.
2. Secondly, an amount of Rs.7,82,56,320/- which was incurred to" expenditure during e A. Y.2000-01· was allowed in five equal instalments for from 2000-01 to 2004- 05 as per the directions of the CIT(A) vide his order 28/08/2003. On further appeal, the ITAT held that the entire VRS expenditure} allowed in the AY 2000-01. Hence 1/5 t h of Rs.7,82,66,320/- ie. 1,56,53,264/- added back for the A. Y. 2004-05."
3. Further, your company has claimed Rs.3.95 crores towards payment of which was fully allowed and it is stated tint as per the provisions of 35 DDA of where any assessee incurs any expenditure in any previous year by way of pay any sum to an employee (in connection with his voluntary retirement), in accordance any scheme or schemes of voluntary retirement, 1/5 th of the amount so paid deducted in computing the profits and gains or the business for that previous year the balance shall be deducted in equal instalments for each of the four immediate succeeding previous years. But the full amount of 3.95 crores as claimed as deduction instead of actual allowable of Rs. 79 lakhs.
Yours faithfully, 6 ITA No. 999/Hyd/13 Gulf Oil Corporation Sd/-
(M Naveen) Asst. Commissioner of Income tax Circle'2(3) . Hyderabad."
4. On appeal, before the CIT(A), the appellant has argued that the proviso to section 147 of the Income Tax Act comes into force once the period of 4 years from the end of the assessment year elapses. In this case that period elapsed on 31/3/2009 whereas notice under section 148 of the Income Tax Act was issued on 27/11/2009. The proviso to section 147 states as below :-
"Provided that where an assessment under subsection (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of 4 years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to 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."
4.1 In other words, the contention of the appellant is that in the present case it was the duty of the assessing officer to establish that there was a failure on the part of the appellant to disclose fully and truly all material facts necessary for its assessment. It is stated that all such material facts had been disclosed and the assessing officer was not justified in reopening the assessment.
5. The CIT(A) after considering the submissions of the assessee observed that with regard to the application of the proviso referred to supra the important part is that there should be a failure on the part of the appellant. This failure entails that certain material facts are essential for the assessing officer to make a proper assessment. In other words if the appellant does 7 ITA No. 999/Hyd/13 Gulf Oil Corporation not disclose important facts which would have a negative bearing on his assessment then the disclosure is not full. The assessee must make a disclosure of all relevant facts and information and also truthfully so that the assessing officer is in a position to form an opinion on the exact income of the appellant. Once, all that information is available with the assessing officer then he forms an opinion. Later on, based on the same information he cannot change his opinion. This is the import of the aforementioned proviso whose purpose is to ensure that only genuine cases are reopened and merely because a succeeding assessing officer or the same assessing officer later on forms a different opinion, assessments should not be reopened. However, in genuine cases where due to a failure on the part of the appellant the assessing officer could not make a correct judgement, he has every right to reopen the original assessment. It must be understood that the limit of 6 years for reopening of the assessments under this section has not been reduced by the legislature. The proviso only seeks to limit litigation and to ensure that beyond 4 years only those cases are reopened where there is a pressing need.
5.1 The CIT(A) referring few case laws, held as follows:
5.6 Based on the insight obtained from the aforementioned judgements I would now examine the wholeness and truthfulness of information placed by the appellant before the assessing officer during the original assessment. During the course of assessment proceedings for the assessment year 2005-06 it was noticed by the assessing officer that the appellant had sold land in Bangalore to some developers vide agreement dated 28/06/2003. As per this agreement, the land was originally divided into two blocks namely A and B. Block A was transferred during the financial year relevant to the current assessment year and the appellant offered capital gains accordingly. The appellant neither provided any estimate of the market value, nor the valuation and nor any other relevant details regarding the property transactions in question. It was only during the assessment proceedings for the next assessment year that the assessing officer investigated and found that the value at which sale was made by the appellant was far 8 ITA No. 999/Hyd/13 Gulf Oil Corporation less than the sub registrars value. A full and true disclosure would involve placing the relevant information in the file so that the assessing officer could decide on the course of action. The assessing officer is not expected to doubt each and every piece of information placed by an assessee in its return of income. In the present case, the assessing officer had no inkling and there were no material facts before him which would lead him to know that the price disclosed by the appellant was less than the stamp duty price on which the appellant had paid the stamp duty. This fact was discovered only when investigations were made in the next assessment year. In the light of the above legal pronouncements and facts on record, I hold that the information provided by the appellant was not full and true and that there was justification with respect to the assessing officer for reopening the assessment."
6. Aggrieved by the order of the CIT(A), the assessee is in appeal before us.
7. Before us, the learned AR of the contended that the reopening of assessment u/s 148 is illegal for the reason that: (a)the assessment was earlier completed u/s 143(3) of the IT Act; (b )the assessment is sought to be reopened beyond a period of four years from the end of the relevant assessment year and, (c) lastly there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that assessment year.
7.1. The learned AR submitted that in the notice furnishing the reasons for reopening the assessment there is not even a whisper of any remotest allegation that there was any failure to disclose fully and truly all material facts on the part of the assessee. The reasons furnished are a mere pretence and is only a ruse to review the assessment already made.
7.2 The learned AR contended that the reasons furnished could not have led to formation of any belief that income chargeable to tax escaped assessment, as there was no failure on the part of the appellant to disclose fully and truly all material facts necessary for its assessment.9 ITA No. 999/Hyd/13
Gulf Oil Corporation 7.3 As regards the reason No. 1 (supra) given by the Assessing Officer for reopening of assessment, the learned AR submitted that section 50C of the IT Act has no application and the reason given for reopening the assessment is contrary to the statutory provisions of Section 5OC of the IT Act then in vogue for the assessment year 2004-05.
7.4. It is submitted that Block-A land was transferred in the Asst. Year 2004-05 on the basis of agreement dt.28-6-2003. This was filed during the original assessment proceedings before the Assessing Officer. All facts relevant were stated in the assessment made earlier. This agreement executed is an unregistered agreement and is typed on stamp paper of Rs.200. Without going into other merits on valuation of land, it is submitted that Sec.5OC of the IT Act can be invoked only in respect of agreements executed and registered and not in respect of unregistered documents.
7.5. It is submitted that in view of the fact that Sec. 5OC of the IT Act was inapplicable to unregistered documents, the said section 50C of the I. T Act is now amended with prospective effect from 1- 10-2009 to facilitate invoking the said section even in respect of transactions which are not registered with the Stamps & Registration Authorities. Clause-25 of the Finance (No.2) Act has brought about this amendment effective from 1-10-2009.
7.6 The learned AR invited our attention to the memorandum explaining the provisions of the Finance (No.2) Bill, 2009 reported in 314 ITR (Stat.) P.214 (copy enclosed). In this memorandum, the position of the existing law, the reasons for amendment of statute effective from 1-10-2009, have clearly been spelt out. The amendment is applicable in relation to the transactions undertaken on or after 1 October, 2009. He, therefore, submitted that in view of the above, since sec.50C of the IT Act does not apply to the transaction relating to the transfer of land by the appellant, it is 10 ITA No. 999/Hyd/13 Gulf Oil Corporation submitted that Section 50C of the IT Act is inapplicable for the assessment year 2004-05.
7.7. It is submitted that the assessment was correctly completed without taking recourse to Sec. 50C of the IT Act. The assessment is reopened on the reason given which is only a pretence or a ruse to reopen the assessment. There cannot be reopening of assessment by taking recourse to the provisions of law which are inapplicable for the assessment year under consideration. Therefore, the reopening of assessment on the above reason is objected to.
7.8 It is contended that from the reasons furnished, it is very clear that there cannot be any criticism that there was any omission to disclose fully and truly all material facts on the part of the assessee. It was because of this factual position, even the record of reasons does not allege any failure on the part of the appellant that it has failed to disclose fully and truly all material facts necessary for the purpose of assessment.
7.9 As regards reason No. 2 given by the Assessing Officer for reopening of assessment, the learned AR contended that the above reasoning given is wrong, as the Assessing Officer never allowed Rs.l,56,53,264 as expenditure while completing the assessment for the Asst. Year 2004-05. Kind attention is invited to the assessment order dt. 28-12-2006. It will be clear that the Assessing Officer has not allowed the VRS expenditure of Rs.l,56,53,264 as deduction at all. Therefore, the question of adding back this amount does not arise.
7.10 Referring to the both the said reasons, the learned AR submitted that there is no allegation in the record of reasons that the assessee has failed to disclose fully and truly all material facts. In fact, there cannot be any such allegation because there was no omission on the part of the appellant in disclosing full information. Therefore, the conditions precedent for reopening the assessment do 11 ITA No. 999/Hyd/13 Gulf Oil Corporation not exist and the notice issued u/s 148 of the IT Act is illegal.
7.11 The learned AR submitted that in the reasons as communicated there is not even a whisper of any allegation that such escapement of income has occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Also as a fact too there has been no such failure. The reasons for reopening are communicated in the communication dt. 22-7-2010. The said communication contains no such allegation of any omission. It is settled law that the reasons recorded as communicated should refer to the omission on the part of the assessee. If there is no such allegation at all on that very ground itself, the reopening is held to be illegal. For this proposition the learned AR relied on the following case laws:
1. Dulichand Singhania Vs. ACIT, 269 ITR 192 (P&H)
2. Haryana Acrylic Manufacturing Co. Vs. CIT & Anr., 308 ITR 38 (Del.)
3. JSRS Udyog Ltd. & Anr. Vs. IT), 313 ITR 321 (Delhi.)
4. Sitara Diamond (P) Ltd. Vs. DCIT, 345 ITR 91 (Bom.)
5. Dynacraft Air Controls Vs. Smt. Sneha Joshi & Othrs., 355 ITR 102 (Bom.) 7.12. Learned AR invited our attention to the recent judgment of the Hon'ble High Court of Andhra Pradesh in Techumseh Products Pvt. Ltd. Vs. Asst. Commissioner of Income tax & Another reported in 361 ITR 429. The Hon'ble High Court held in the above judgment that the reasons for reopening the assessment should reflect in the notice uls 148 itself. If these reasons are not reflected in the notice, the notice is illegal. Similar view was expressed by Bombay High Court in 355 ITR 102 (Bom.). In the present case the reasons are not reflected in the notice issued u/s 148 of the IT Act. Therefore, on this ground also the reopening of assessment is illegal.12 ITA No. 999/Hyd/13
Gulf Oil Corporation 7.13. The learned AR submitted that the reasons as recorded on the basis of which the assessment is reopened can alone be considered and the other additional reasons that are not forming part of the record of reasons for reopening the assessment cannot be relied upon to justify the reopening of assessment.
7.14 The AR invited our attention to the following cases which clearly state that nothing can be added to the reasons contained in the record of reasons to justify the reopening of the assessment. Additional reasons cannot justify the reopening of assessment which are not part of the record of reasons. The only document to be looked into is the record of reasons:
1. N.D. Bhatt (IAC) & Anr. Vs. IBM World Trade Corpn., 216 ITR 811 (Bom.)
2. Equitable Investment Co.(P) Ltd. Vs. ITO, 174 ITR 714 (Cal.)
3. ASA Johan Devinathan & Anr. Vs. Addl. CIT, 126 ITR 270 (Mad.)
4. Smt. Rajeshwari Birla Vs. WTO, 119 ITR 629 (Cal.)
5. Mohinder Singh Gill & Anr. V. Chief Electoral Officer, AIR 1978 SC 851
6. CIT Vs. Living Media India Ltd., 359 ITR 106 (Del.) 7.15 The learned AR submitted that in the letter dt. 22/07/2010 communicating the reasons for reopening a third reason is also given.
This reason appears to have been an after thought, after reopening the assessment and is not a part of record of reasons for reopening the assessment. The assessment reopened was earlier made u/s 143(3). It was reopened after the expiry of four years from the end of the relevant assessment year. Therefore sanction under proviso to section 151(1) of CIT for reopening is mandatory. The third reason communicated to the assessee is not a reason at all, forming part of record submitted to the commissioner for sanction for issue of the notice. Hence the third reason deserves to be ignored.
7.16. As regards the third reason given by the Assessing Officer for reopening of assessment, the learned AR contended that even this 13 ITA No. 999/Hyd/13 Gulf Oil Corporation reason is not correct, as the amount of 3.95 crores was paid under group gratuity scheme of LIC to the approved LIC group gratuity fund, in respect of employees retiring on superannuation. This is not gratuity paid for employees under the voluntary retirement scheme. Hence section 35DDA is inapplicable. This information was on record and it consequential order dt. 11-9-2013, the said addition in the reassessment was deleted.
7.17 The learned AR submitted that in any event, on the basis of reasons furnished, it is evident that there was no failure on the part of the assessee to disclose fully and truly all material facts. Even if there is any such allegation, such allegation being justifiable and open to judicial scrutiny, cannot survive on the facts of the case. It is all the more pertinent to note that all information was there in the record itself and the reopening of assessment was with reference to the material already available on record. On this very premise itself, it is clear there was no failure on the part of the assessee to disclose fully and truly all material facts.
7.18. The learned AR submitted that the very notice u/s 148 of the IT Act being illegal, the consequential action also becomes illegal and the assessment order passed u/s 143(3) read with section 147 of the IT Act dt. 13-12-2010 is illegal and deserves to be annulled as non- est. 7.19 The learned AR, therefore, submitted that if the basic contention that the reopening of assessment is illegal, is accepted, the consequential reassessment order dt. 13-12-2010 becomes non-est and the remaining submissions on the quantification of income in the reassessment will not arise for consideration.
8. The learned DR, on the other hand, relied upon the orders of the revenue authorities.
14 ITA No. 999/Hyd/13Gulf Oil Corporation
9. We have heard both the parties, perused the record and gone through the orders of the authorities below as well as the decisions cited. We have also considered the submissions of the learned AR against the reasons given by the Assessing Officer for reopening of assessment.
9.1 The Assessing Officer reopened the assessment by giving the reasons cited supra and the action of the Assessing Officer was confirmed by the CIT(A) on the ground that the information provided by the assessee was not full and true and that there was justification with respect to the Assessing Officer for reopening the assessment.
9.2 The contention of the learned AR is that it was the duty of the Assessing Officer to establish that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment. According to the learned AR, it is evident that there was no failure on the part of the assessee to disclose fully and truly all material facts. Even if there is any such allegation, such allegation being justifiable and open to judicial scrutiny, cannot survive on the facts of the case. It is all the more pertinent to note that all information was there in the record itself and the reopening of assessment was with reference to the material already available on record. On this very premise itself, it is clear there was no failure on the part of the assessee to disclose fully and truly all material facts.
9.3 Under the new provisions of section 147, an assessment can be reopened if the AO has reason to believe that income chargeable to tax has escaped assessment; but if he wants to do so after a period of four years from the end of the assessment year, he can do so only if the assessee has fallen short of his duty to disclose fully and truly all material facts necessary for his assessment. It does not follow that he cannot reopen the assessment even within the period of four years as aforesaid if he has reason to believe that the assessee has failed to make the requisite disclosure. All that the section says is that in a case where the assessment is sought to be reopened after the period 15 ITA No. 999/Hyd/13 Gulf Oil Corporation of four years, the only reason available to the AO is the non- disclosure on the part of the assessee.
9.4 So long as the assessee has furnished full and true particulars at the time of original assessment and so long as the assessment order is framed under section 143(3) of the Act, it matters little that the assessing officer did not ask any question or query with respect to one entry or note but had raised queries and questions on other aspects.
9.5 On perusal of record, we find that there was no failure on the part of the assessee to disclose fully and truly all material facts that are necessary for its assessment. As contended by the learned AR the reopening of assessment u/s 148 is illegal for the following reasons:
(a)the assessment for this AY 2004-05 was earlier completed u/s 143(3) of the IT Act on 28/12/2006.
(b )the assessment is sought to be reopened beyond a period of four years from the end of the relevant assessment year as notice u/s 148 was issued on 27/11/2009 which is beyond a period of 4 years from the end of relevant AY.
(c) lastly there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for that assessment year.
9.6 Admittedly, in the present case, the revenue authorities were not able to show that there is a failure on the part of the assessee to disclose fully and truly all material facts in the assessment finally made. Being so, it is to be inferred that there is no failure on the part of the assessee to make return or to disclose fully and truly all the material facts necessary for assessment. In the instant case, notice issued by the Assessing Officer on 27/11/2009 u/s 148 of the IT Act 16 ITA No. 999/Hyd/13 Gulf Oil Corporation being issued after 4 years from the end of the relevant AY i.e. 2004- 05 is barred by limitation. Accordingly, we are inclined to quash reassessment framed thereunder. Our view is fortified by the judgment of the Hon'ble Supreme Court in the case of CIT & Anr. Vs. Foramer France, 264 ITR 566 (SC) wherein the Apex Court affirmed the judgment of the Allahabad High Court reported in 247 ITR 431. Accordingly, the grounds raised by the assessee on this issue are allowed.
9.7 Since we have quashed the reassessment made by the Assessing Officer u/s 147 of the Act, itself, we refrain from going into the other grounds raised by the assessee on merit of the additions made by the AO.
10. In the result, appeal of the assessee is allowed.
Pronounced in the open court on 20/05/2014.
Sd/- Sd/-
(D. MANMOHAN) (CHANDRA POOJARI)
VICE PRESIDENT ACCOUNTANT MEMBER
Hyderabad, Dated: 20/05/2014
kv
Copy to:-
1) Gulf Oil Corporation Ltd., P.B. No. 1, Sanath Nagar (IE), Kukatpalli, Hyderabad -500 018.
2) Asst. CIT, Circle - 2(3), Hyderabad.
3) The CIT(A)-III, Hyderabad
4) The CIT-II, Hyderabad.
5) The Departmental Representative, I.T.A.T., Hyderabad.
17 ITA No. 999/Hyd/13 Gulf Oil Corporation Description Date Intls S.No. 1. Draft dictated on Sr.P.S./P.S 2. Draft placed before author Sr.P.S/PS Draft proposed & placed JM/AM 3 before the second Member 4 Draft discussed/approved by JM/AM second Member 5 Approved Draft comes to the Sr.P.S./P.S Sr.P.S./PS 6. Kept for pronouncement on Sr. P.S./P.S. 7. File sent to the Bench Clerk Sr.P.S./P.S 8 Date on which file goes to the Head Clerk 9 Date of Dispatch of order