High Court quashes reassessment notice for AY 2011-2012, citing original assessment scrutiny and lack of merit.

The High Court set aside the notice seeking to reopen the assessment for the assessment year 2011-2012. It held that the Assessing Officer had thoroughly examined the deduction claim under section 80IA during the original assessment, and any attempt to modify this through reopening would amount to a change of opinion. The court concluded that the notice lacked merit, and thus, it was set aside, allowing the petition and disposing of the matter accordingly.

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Issues:
1. Challenge to notice seeking to reopen assessment for assessment year 2011-2012.
2. Failure to furnish separate Profit and Loss account and balance sheet for the relevant year.
3. Adjustment of expenses attributed to windmill division affecting deduction under section 80IA of the Act.
4. Objections raised by petitioner against the notice of reopening and subsequent rejection.

Issue 1 - Challenge to Notice Seeking to Reopen Assessment:
The petitioner challenged a notice dated 9.3.2016 seeking to reopen the assessment for the assessment year 2011-2012. The Assessing Officer had restricted the deduction claimed under section 80IA of the Act in the original assessment. The reasons given for reopening the assessment included the failure of the assessee to submit separate Profit and Loss account and balance sheet for the relevant year and an adjustment of expenses attributed to the windmill division affecting the deduction allowed under section 80IA of the Act.

Issue 2 - Failure to Furnish Separate Profit and Loss Account and Balance Sheet:
The Assessing Officer contended that the deduction under section 80IA of the Act could not have been allowed due to the failure of the assessee to furnish separate Profit and Loss account and balance sheet of the undertaking for the relevant year. This non-compliance led to the Assessing Officer's belief that income chargeable to tax had escaped assessment, warranting the reopening of the assessment under Section 147 of the IT Act.

Issue 3 - Adjustment of Expenses Affecting Deduction under Section 80IA:
The Assessing Officer also argued that an expense of Rs. 16.36 lacs should have been attributed to the windmill division, affecting the profit calculation and consequently the deduction under section 80IA of the Act. The allocation of common expenses between different business divisions was deemed necessary to arrive at the correct profit of each business for claiming deductions accurately.

Issue 4 - Objections Raised by Petitioner Against Reopening Notice:
The petitioner raised objections to the notice of reopening, arguing that the issue of deduction under section 80IA had already been scrutinized during the original assessment, and any attempt to disallow the claim would amount to a change of opinion. The petitioner also cited principles of consistency and merger of the matter in appeal before the Commissioner as reasons to challenge the reopening notice.

In the final judgment, the High Court held that the Assessing Officer had minutely examined the deduction claim under section 80IA during the original assessment. The court concluded that any attempt to modify this position through reopening the assessment would constitute a change of opinion. Therefore, the notice dated 9.3.2016 seeking to reopen the assessment was set aside, and the petition was allowed and disposed of accordingly.

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