S.H.KAPADIA,J. - (1.) BOTH the above writ petitions involve the same question of law. Both the petitions involve the same partieS.Hence, they are heard together.
(2.) BY the above two writ petitions, the petitioner which is an Export House seeks to challenge a notice under S.148 of the IT Act, 1961. For the sake of brevity, the facts in Writ Petition No. 436 of 2001 are reproduced hereinbelow : Facts (a) The petitioner is a company registered under the Companies Act, 1956. It is engaged in the manufacture of bulk drugs and formulationS.The petitioner is an Export House. The petitioner exports self manufactured goodS.The petitioner also buys goods manufactured by supporting manufacturers and it exports the same as trading goodS.The petitioner has also issued a disclaimer certificate in favour of the supporting manufacturerS. The petitioner filed its return of income for the asst. year. 1992 93 on 30th Dec., 1992. In its return of income, the petitioner claimed deduction of RS.1.46 crores (approx,) under S.80HHC by filing its return of income along with the form prescribed for disclaimer of tax concession in respect of export of trading goodS.The said certificates were in favour of the supporting manufacturerS.A questionnaire was submitted by the Department on 2nd Sept., 1994, to the assessee. On 31st March, 1995, respondent No. 1 completed the assessment of the petitioner for the asst. year. 1992 93 under S.143(3) of the Act. The first respondent partly disallowed the petitioner's claim under S. 80HHC and as against the petitioner's claim for deduction under that section from RS.1.46 crores (approx), the deduction was reduced to RS.1.19 crores (approx.) (b) Being aggrieved by the order of the AO, the assessee preferred an appeal to the CIT(A). The appeal was partly allowed. (c) By the impugned notice dt. 30th March, 1999, respondent No. 1 has alleged that he had reason to believe that the petitioner's income had escaped assessment and, accordingly, he has called upon the petitioner to file a return of income within 35 dayS. (d) By letter dt. 6th April, 1999, the chartered accountants of the petitioner requested the AO to furnish reasons recorded by respondent No. 1 prior to issuance of the notice under S.148. (e) On 20th April, 1999, the petitioner filed a return of income for the asst. year. 1992 93 showing the same income declared by it in its original return of income filed on 30th Dec., 1992. The returns were filed without prejudice to the rights of the petitioner to challenge the impugned notice. In the computation, the petitioner once again claimed the deduction at RS.1.46 crores (approx) under S.80HHC. (f) Being aggrieved by the notice, the present petition has been filed. Arguments Mr. Trivedi, learned senior counsel appearing on behalf of the assessee, submitted that the original assessment was made on 31st March, 1995. It was for the asst. year. 1992 93. It was made under S.143(3). He contended that under the proviso to S.147 of the Act, no action can be taken for reopening such assessment after the expiry of four years from the end of the asst. year. 1992 93 on 31st March, 1997, unless respondent No. 1 has reason to believe that the assessee's income has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. It was urged that, in the present case, an affidavit in reply has been filed on behalf of the Department which clearly indicates that the reopening of the assessment by the Department was based on change of opinion. It was, therefore, contended that the reopening of the assessment was bad in law as the precondition for issue of a valid notice and for valid initiation of reassessment proceedings had not been fulfilled.
(3.) IN reply, it was urged on behalf of the Department that under Expln. 2 to S.147, it is clearly laid down that for the purposes of S.147, certain cases of escapement of income as mentioned in the Explanation shall be deemed to be cases where income chargeable to tax has escaped assessment. In this connection, reliance was placed by the Department on cl. (c) of Expln. 2 to S.147. It was argued that, in the present case, although an assessment was made under S.143(3) earlier, the income has been made the subject of excessive relief and, therefore, the deeming provision of Expln. 2 would apply. It was also urged that under S.149 assessment can be reopened even after four years if the income escaping assessment is of a specified amount. In this connection, reliance was placed on S.149(1)(a)(ii). Findings;