Appeals dismissed, assessments quashed due to lack of jurisdictional foundation.

The Tribunal dismissed the Revenue's appeals, quashed the assessments for both years, and deleted all additions made therein. This decision was primarily due to the lack of a valid jurisdictional foundation for reopening the assessments under section 147 of the Income Tax Act. The Tribunal found that the Assessing Officer failed to establish that income had escaped assessment due to the assessee's fault, leading to the assessments being deemed beyond the statutory time limit and a change of opinion.

---

---

Issues:
1. Jurisdictional validity of reopening assessment under section 147/143(3).
2. Treatment of wrong deductions and escapement of income.
3. Disallowance of deduction under section 80 IA and invoking section 40(a)(ia).
4. Entitlement for deduction under section 80IA.
5. Application of circular no. 779 of CBDT.
6. Non-deduction of TDS under section 194H.
7. Validity of the grounds of appeal.

Analysis:

Issue 1: Jurisdictional validity of reopening assessment under section 147/143(3)
The appeals were filed by the Revenue against the order of the CIT(Appeal)-II. The key contention was the validity of reopening the assessment under section 147/143(3). The Assessing Officer reopened the assessment after four years from the end of the relevant assessment year without recording satisfaction that income chargeable to tax had escaped assessment due to the assessee's failure. The reassessment was challenged on the grounds of being beyond the statutory time limit and a change of opinion. The Tribunal examined the reasons for reopening and found that the AO did not establish that income had escaped assessment due to the assessee's fault. The Tribunal referred to relevant case laws and concluded that the reassessment lacked jurisdictional foundation under section 147, leading to the quashing of the assessment for both years.

Issue 2: Treatment of wrong deductions and escapement of income
The Revenue contested the deletion of additions amounting to Rs. 3,29,228/- and Rs. 8,96,343/- in separate appeals. The Assessing Officer disallowed deductions under section 80 IA and invoked section 40(a)(ia) on commission amounts. The Tribunal observed that the AO reopened the assessment based on issues already examined during the original assessment, indicating a change of opinion. The Tribunal noted that the reassessment lacked a valid jurisdictional foundation and subsequently dismissed the appeals, leading to the deletion of all additions made in the assessments.

Issue 3: Entitlement for deduction under section 80IA
The Revenue argued that the assessee was not entitled to deductions under section 80IA due to non-compliance with specified criteria. However, the Tribunal's decision to quash the assessments rendered further discussion on this issue unnecessary.

Issue 4: Application of circular no. 779 of CBDT
The CIT(A)-II justified the benefit to the assessee based on circular no. 779 of CBDT issued on a specific date. The Tribunal did not delve into this issue further due to the quashing of assessments.

Issue 5: Non-deduction of TDS under section 194H
The AO added back amounts due to non-deduction of TDS under section 194H on commission payments. However, the Tribunal's decision to quash the assessments rendered this issue moot.

Issue 6: Validity of the grounds of appeal
The appellant requested leave to modify or add fresh grounds of appeal as necessary. However, the Tribunal's decision to dismiss the appeals and quash the assessments made further discussion on the grounds of appeal irrelevant.

In conclusion, the Tribunal dismissed the Revenue's appeals, quashed the assessments for both years, and deleted all additions made therein, primarily due to the lack of a valid jurisdictional foundation for reopening the assessments under section 147 of the Income Tax Act.

---