Reopening of assessment under Section 147 of the Income Tax Act is justified when there is failure to disclose material facts, even beyond the four-year limit.

JUDGMENT :

This Writ Appeal is filed challenging the order of this Court dated 26.09.2023 passed by the learned Single Judge in W.P.No.8014 of 2022, dismissing the Writ Petition filed by the Appellant herein viz., assessee.

2. The appellant has filed the above said writ petition challenging the impugned notice issued by the first respondent under Section 148 of the Income Tax Act, 1961 (herein after referred to as 'the Act') dated 30.03.2021 for the Assessment Year 2014-15 along with the impugned order disposing off the objections of the Appellant/petitioner dated 15.02.2022 for the Assessment Year 2014-15 passed by the third respondent.

3. The appellant company is engaged in manufacturing and selling of Active Pharmaceutical Ingredients (APIs), amino acids and their intermediates, primarily to the customers in the International markets. The appellant company is assessed to income tax under the jurisdiction of the First Respondent. During the previous year, relevant to the assessment year 2013-2014, the appellant had issued credit notes aggregating to Rs.11,96,04,791/- and claimed the same amount as deduction in the original return of income filed by it. Subsequently, the Authorized Dealer(AD) namely Indian Bank accepted the reduction in the invoice value of exports vide letter dated 26.12.2013 allowing the setoff of Rs.5,41,29,351/- for the AY 2013-14 and the remaining amount of Rs.6,57,63,274/- was allowed as setoff for the AY 2014-15 as against Rs.11,98,92,625/-.

4. The appellant revised its return of income for the AY 2013-2014 on 15.12.2014 offering an additional income of Rs.6,54,75,440/- to the income under the heading "Computation of Income" from "Business or profession" and thus restricted the deduction to Rs.5,41,29,351/- for the Ay 2013-14.

5. The appellant filed its original return of income during the previous year, relevant to the impugned AY 2014-15 dated 29.11.2014 returning a total income of Rs.21,06,88,820/-. In the said impugned AY 2014-15, the appellant claimed the differential amount of Rs.6,54,75,440/- as deduction.

6. Further the appellant had also communicated the reason for revising the return of income for AY 2013-14 to the first Respondent vide letter dated 07.07.2015. The case of the appellant was selected for a scrutiny assessment and first respondent after considering the submissions made by the appellant, completed the assessment vide order dated 17.10.2018 without making any adjustments in respect of credit note deduction. Thereafter, the first respondent issued the impugned Notice dated 30.03.2021 under Section 148 of the Act alleging that the income of the Appellant had escaped.

7. While so, for the above said Impugned notice, the appellant sought reasons recorded for reopening the assessment. The first Respondent vide letter dated 19.08.2021 furnished the reasons recorded. For which the appellant filed its detailed objections vide its letter dated 20.09.2021. In turn the third respondent disposed off the objections filed by the appellant vide impugned order dated 15.02.2022. .

8. Aggrieved over the impugned order dated 15.02.2022 and Impugned notice u/s 148 dated 30.03.2021, the appellant filed W.P.No.8014 of 2022 before this court.

9. The Writ Court on appreciation of rival submissions, held that the Assessing Officer cannot be faulted while reopening the Assessment and overruled the objection of the appellant. Accordingly, the writ court, by order dated 26.09.2023, dismissed the writ petition holding explantion to Section 147 of the Income Tax Act, 1961 makes it clear that filing of information is not sufficient. As against the said order, the appellant filed the present writ appeal.

10. Mr.N.V.Balaji, learned counsel for the appellant submitted that the first respondent has no jurisdiction to initiate the reopening proceedings beyond four years from the end of the relevant Assessment Year [hereinafter called as “AY”] and hence the entire re-assessment proceedings are barred by limitation.

11. The lea