Law:

Section:

Section 10A, read with section 147, of the Income-tax Act, 1961 - Free Trade Zone - Assessment year 2004-05 - Assessee-company claimed deduction under section 10A which was allowed by Assessing Officer without specifically dealing with eligibility of assessee to said claim - During course of assessment proceedings for subsequent assessment year 2006-07, materials on record revealed that units of assessee were not independent units; no independent accounts were maintained and there was an overlapping of work and use of resources amongst units and several non section 10A activities were being carried on in section 10A units - On basis of such disclosure Assessing Officer sought to reopen assessment - Whether even if reopening of assessment had taken place beyond a period of four years of end of relevant assessment year reopening assessment under section 147 was justified - Held, yes [In favour of revenue] FACTS For the relevant assessment year, the assessee-company claimed deduction under section 10A. The Assessing Officer allowed the same. The Assessing Officer did not specifically deal with the eligibility of the assessee to said claim. Subsequently, during the course of assessment proceedings for assessment year 2006-07, the material which has come on the record in the course of those assessment proceedings has revealed that the units of the assessee are not independent units; no independent accounts were maintained; there was an overlapping of work and use of resources amongst units and several non section 10A activities were being carried on from 10A units. On the basis of disclosure the Assessing Officer sought to reopen the assessment for instant assessment year. The assessee contended that the reopening of the assessment has taken place beyond a period of four years and, hence, the jurisdictional condition for reopening the assessment beyond the period is that there must be a failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment for that assessment year. On writ: HELD In the instant case, during the course of the order of assessment for assessment year 2004-05, the Assessing Officer has not dealt with…

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