Law:

Section:

Section 80HHC, read with sections 80-IB and 147, of the Income-tax Act, 1961 - Deductions - Exporters - Assessment year 2000-01 - For relevant assessment year, assessment was completed under section 143(3) - Subsequently, reassessment proceedings were initiated after expiry of four years from end of relevant assessment year on ground that deduction under section 80HHC was allowed without reducing deduction claimed and allowed under section 80-IB - Tribunal finding that there was no failure on part of assessee to disclose fully and truly all material facts, opined that reassessment proceedings were hit by proviso to section 147 - Whether since it was not revenue's case that assessee had suppressed, misrepresented or falsified record/facts, impugned order passed by Tribunal was to be upheld - Held, yes [In favour of assessee] FACTS For the relevant assessment year, the assessment was completed under section 143(3). After expiry of four years from the relevant assessment year, the Assessing Officer initiated reassessment proceedings taking a view that computation of deduction under section 80HHC was made without reducing the deduction claimed and allowed under section 80-IB as required by section 80-IA(9) which was also applicable to section 80-IB. On appeal, the Tribunal noted that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The fact that the assessee claimed deduction under section 80HHC as well as 80-IB were duly available in the return of income as well as annexure thereto, which were duly considered by the Assessing Officer at the time of the passing the original assessment order under section 143(3). Therefore, the Tribunal held that initiation of reassessment proceedings under section 147 was clearly hit by proviso to section 147 which made the proceedings initiated by the Assessing Officer as without jurisdiction. On appeal: HELD In the instant case Explanation 1 to section 147 does not help the revenue. The expression 'material facts' inExplanation 1 refers to primary facts. The term 'primary facts' or 'material facts' are those facts which are material and relevant for the…

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