ATUL PRODUCTS LIMITED Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner herein which is a limited company challenges the notice under s. 148 of the IT Act, 1961, issued by the respondent herein, the ITO, Company Circle II, Ahmedabad, proposing to reopen the assessment of the assessee for the asst. yr. 1975-76. THE notice was issued on February 23, 1978. THE facts leading to this litigation are as follows. THE assessee-company manufactures dyestuffs and chemicals. THE assessment year under consideration is the asst. yr. 1975-76, the corresponding accounting year being calendar year 1974. For the asst. yr. 1975-76, the petitioner- company filed its return under s. 139 on June 29, 1975, declaring the total income of Rs. 4,55,96,020 but thereafter on 28th July, 1975, a revised return showing an income of Rs. 4,45,74,590 was filed. THE income returned in the revised return decreased because in the original return the petitioner had not made the claim for deduction under s. 80J, that is, relief in respect of a new industrial undertaking. In the assessment for this particular year, the petitioner who had claimed relief under s. 80J in respect of a new industrial undertaking, also claimed relief under s. 80M in respect of inter-corporate dividends, gratuity of Rs. 53,041 accrued and paid during the accounting year and extra shift depreciation allowance for plant and machinery including technical know-how. THE ITO passed the order in the original assessment on January 3, 1977, and he allowed all the claims except the claim under s. 80J. An application under s. 154 was made to the ITO and thereafter the ITO by his order dated July 2, 1977, accepted the application and granted relief as claimed in the letter. THEreafter, the notice dated February 23, 1978, exhibit 'D' to the petition, was issued by the respondent stating that he had reason to believe that the petitioner's income chargeable to tax for the asst. yr. 1975-76 had escaped assessment and that he proposed to reassess the same and asked the petitioner to file a fresh return within thirty days. In order to avoid penalty proceedings under s. 271(1)(a), the petitioner submitted its return on March 19, 1978. THE petitioner-company also requested the respondent to intimate reasons for reopening the assessment. During the course of the discussion with the respondent the petitioner's representative was informed that s. 147 proceedings were being taken in respect of four items, namely, relief under s. 80J in respect of expansion of Naphthalene Intermediate Plant (hereinafter referred to as NIP Expansion Plant), s. 80M relief granted on gross dividends instead of net dividends, gratuity of Rs. 53,041 paid during the accounting year and allowed in the original assessment and extra shift depreciation and technical know-how. THEreafter, the petitioner-company addressed a letter on July 19, 1979, setting forth its contentions in respect of each of these four different heads in respect of which the reassessment proceedings were proposed to be started. THE petitioner's contention is that the proceedings have been restarted under s. 147(b) on the basis of the information of audit note or audit objection and the petitioner contends that no information was received by the ITO within the meaning of s. 147(b) regarding any of these four items. In the affidavit-in-reply filed by the respondent, being the affidavit dated January 21, 1980, in para. 5, the respondent states :

(2.) SEC. 147(b) of the IT Act, 1961, is in the following terms :

(3.) AND, at page 1003, Pathak J. has pointed out :