2022 (5) TMI 1144 - AT - Income Tax

Tribunal upholds CIT(Appeals)'s orders for assessment years 2008-09 and 2009-10

The Assistant Commissioner of Income Tax, Central Circle-1, Raipur (C.G.) Versus Shri Rakesh Pandey

The Tribunal dismissed the revenue's appeals for assessment years 2008-09 and 2009-10, upholding the CIT(Appeals)'s orders. The reopening of the ... Reopening of assessment u/s 147 - change of opinion - disallowance of the assessee’s claim for deduction u/s. 80IB(10) - HELD THAT:- As per the mandate of law, even where a concluded assessment is sought to be reopened by the A.O within a period of 4 years from the end of the relevant assessment year, it is must that the A.O has fresh material or information with him, that had led to the formation of belief on his part that the income of the assessee chargeable to tax has escaped assessment. As case of the assessee had been reopened by the AO on the basis of a mere change of opinion and not on the basis of any fresh tangible material coming to his notice after culmination of the original assessment, therefore, finding no infirmity in the view taken by the CIT(Appeals) who had rightly observed that the reopening of a concluded assessment of the assessee on the basis of mere ‘change of opinion” is not sustainable in the eyes of law, uphold his order to said extent. Disallowance of deduction u/s. 80IB(10) - declining of such claim of deduction qua the charges received by the assessee for provision of various facilities, i.e., pipelines, electricity and stilt parking facilities - We are of the considered view, that as observed by the CIT(Appeals), and rightly so, now when the provision of the aforesaid facilities forms part and parcel of the approval of “Nagar Niyojan Avam Vikas” Raipur vide “Anugya”, dated 23.01.2004, of the housing project in question and, the assessee in terms of the approval of his project was obligated to provide such services, therefore, the same would be eligible for deduction u/s. 80IB(10) - Decided in favour of assessee. Issues Involved:1. Validity of the reopening of the assessment under Section 147 of the Income-tax Act, 1961.2. Eligibility of deduction under Section 80IB(10) of the Income-tax Act, 1961 for various receipts.Detailed Analysis:1. Validity of the Reopening of the Assessment under Section 147 of the Income-tax Act, 1961:The primary issue was whether the Assessing Officer (A.O) was justified in reopening the assessment under Section 147 based on an audit objection without any fresh material. The original assessment was completed under Section 143(3)/147 on 21.12.2010. However, the A.O reopened the case based on an audit objection regarding the assessee's claim for deduction under Section 80IB(10) without any new material. The CIT(Appeals) and the Tribunal both held that the reopening was unjustified as it was based on a 'mere change of opinion,' which is not permissible under the law.The Tribunal referred to several judicial pronouncements, including the landmark judgment of the Hon'ble Supreme Court in CIT Vs. Kelvinator of India (2010) 320 ITR 561 (SC), which established that reopening an assessment on a 'mere change of opinion' is not valid. The Tribunal emphasized that the A.O must have 'tangible material' to justify the reopening, which was absent in this case. Consequently, the Tribunal upheld the CIT(Appeals)'s decision that the reopening of the assessment was invalid.2. Eligibility of Deduction under Section 80IB(10) of the Income-tax Act, 1961 for Various Receipts:The second issue was whether the receipts from car parking, flat maintenance charges, and other facilities were eligible for deduction under Section 80IB(10). The A.O had disallowed the deduction for these receipts, arguing that they were not part of the sale consideration of the building. However, the CIT(Appeals) found that these facilities were part and parcel of the housing project approved by 'Nagar Niyojan Avam Vikas' Raipur and were obligatory for the builder to provide.The Tribunal concurred with the CIT(Appeals)'s view, noting that the provision of such facilities is integral to the housing project and thus eligible for deduction under Section 80IB(10). The Tribunal highlighted that the housing project includes not just the construction of buildings but also the provision of essential facilities like pipelines, electricity, and parking, which are necessary for the project's completion and sale.Conclusion:The Tribunal dismissed the revenue's appeals for both assessment years 2008-09 and 2009-10, upholding the CIT(Appeals)'s orders. The reopening of the assessment was deemed invalid as it was based on a 'mere change of opinion' without any new material. Additionally, the receipts from various facilities provided as part of the housing project were held to be eligible for deduction under Section 80IB(10).Order Pronouncement:The order was pronounced in open court on 09th May 2022, dismissing both appeals of the Revenue.