TaxTMI 
TaxTMI 
TaxTMI 
2014 (5) TMI 404
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....n 80IA(4) of the Act. Such return was taken in scrutiny assessment. During the scrutiny assessment, the Assessing Officer raised several queries with respect to the petitioner's claim for deduction under section 80IA(4) of the Act. After examining the representation of the petitioner, the Assessing Officer framed the assessment on 29.9.2010. He accepted the petitioner's claim for deduction under section 80IA(4) of the Act in toto. We would refer to the contents of such order a while later. It is this scrutiny assessment which the respondent desires to reopen for which the impugned notice under section 147 of the Act came to be issued. The petitioner was supplied with reasons recorded by him for issuing the notice. Such reasons read as under: "In this case, the Assessee, M/s.Ranjit Projects (P) Ltd. engaged in infrastructure development projects in sector road, bridges, byepasses, filed its return of income for the A.Y. 200809 for "Nil" income and paid tax of Rs.51,09,690/- u/s.115JB. The income under the normal provisions of the Act was arrived at after claiming hundred percent deduction of the profit and gains of business of Rs.41519662/under section 80IA. The case was complete....
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....r, consisted of an amount of Rs.1980537/- received from GSRDC as contract receipt and assessee also claimed TDS credit of Rs.450719/-.This contract payment of Rs.19890537/- was not entitled for deduction u/s.80IA of the Act as it was derived from the business of the enterprise. It was only attributable to such business. No observing the provisions of the Act resulted in under assessment of Rs.19890537/- involving Income Tax of Rs.6760793/- including surcharge and education cess. In view of the above facts, I have reason to believe that short levy of Income Tax is to the extent of Rs.1,17,03,693/-. Accordingly, assessment is reopened u/s.147 of the Income Tax Act, 1961." The petitioner raised detailed objections to the notice of reopening. In such objections, the petitioner pointed out that the entire issue was examined at length in the original assessment. The petitioner had satisfied the Assessing Officer about the validity of the claim. Such objections were, however, rejected by the Assessing Officer by the order dated 23rd December 2013. Hence the petition. Learned counsel Shri Soparkar for the petitioner raised the following contentions. (1) That the entire issue was examin....
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....or development of infrastructure facility was not with the Central Government, State Government, local authority or any statutory body in terms of section 80IA(4)(i)(a) of the Act and therefore, the assessee was not entitled to the deduction claimed. The second objection was that a sum of Rs.1.98 crores received from the contractee, according the Assessing Officer, was not derived from development of infrastructure project. We have noticed that deduction under section 80IA(4) was virtually the sole claim of the assessee in the return filed. This claim was thoroughly examined. In the scrutiny, the Assessing Officer raised several questions, some of them read as under: "i. toll collection income shown at Rs.5,53,33,491 include receipt from GSRDC at Rs.1,98,90,537 for which GSRDC has issued TDS certificate in Form 16 in which payment is shown to contractors and subcontractors. What is the nature of this payment by GSRDC and for what purpose? Complete set of document with copy of contract is required by which GSRDC is paying the amount. Why the payment by GSRDC should not be treated as "Work Contract". ii. what is the final participation of GSRDC or Government of Gujarat or other Ba....
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.... on build, own/operate and transfer basis. We have accordingly, built this Bridge at our own cost and we have to own it and operate it, maintain it and collect Toll income for the stipulated period mentioned in the Concession Agreement. After that period, we have to transfer this Toll Bridge to Government without any further monetary consideration. This can be seen and verified from the Concession Agreement. 4. Complete bifurcation of reserve and surplus is as under: 1. General Reserve Rs.16,82,16,204/-. The general reserve is built up by the accumulated profit of the earlier years. 5. We have submitted tax Audit Report along with Report in 10CCB during the course of assessment proceedings. If, however, Audit Report in Form CCB is not found on record, we submit herewith another copy of the said Report. The Concession Agreement with G.S.R.D.C. Was produced for verification during the course of hearing. The Agreement runs into hundreds of pages and therefore, we had also submitted Xerox copies of some important pages of the said Agreement. 6. We submit herewith Auditor's report in Form 29B for working of Book profit u/s.115JB. We hope the above information will suffice with the ....
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....conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built....