TaxTMI 
TaxTMI 
2014 (7) TMI 345
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....the original assessment did not make any additions. The assessment was framed under section 143(3) on 25.4.2006 determining the total income at Rs. 14,29,18,700/-and Rs. 4,54,65,63,744/- 2.3. The impugned notice came to be issued on 27.3.2009 seeking to reopen the assessment for the assessment year 2004-2005. 2.4. The petitioner requested for copy of reasons recorded for the reopening of the assessment and also requested that the original return filed under section 139(1) be treated as return filed under section 148 of the Act. 2.5. The reasons furnished for reopening of the assessment read as follows : "1. The return of income, declaring total income of Rs. Nil was filed by the assessee company on 30.10.2004 claiming deduction of Rs. 469,73,55,657/-u/s. 80IA(iv) of the on generation of electricity. Assessee Company paid tax u/s.115JB of the Act. The assessment was finalised at an income of Rs. 14,29,18,700/- u/s.143(3) of the Act dated 25.04.2006. 2. As per the Notification no.240 of 2002 dated 06/09/2002 whereby it is stated that in exercise of power conferred by section 295 read with sub section 7 of section 80I of the Income Tax Act, amendment is made to income tax rules f....
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....orm No.10CCB along with the return of income and as the audit reports were not attached with the return of income, deduction claimed under section 80IA from the profit and gains derived from an undertaking would not be admissible. It was further held in the said order that deduction under section 80IA is available only in respect of such profit and gain which have a direct or proximate nexus with the activity of manufacture of production and same must have accrued to the assessee in the course of or arising from the manufacture or production of the industrial undertaking. Interest though had its origin in sale, same was not on account of sale of goods of industrial undertaking and, therefore, interest on late payment of sale proceedings would not be eligible for deduction under section 80IA. 3. The petitioner therefore, challenged the said notice. The Court issued notice on 29.12.2009 however, the reassessment order was passed by the Assessing Officer the very next day and therefore, the amendment was sought in the petition challenging such order dated 30.12.2009 passed under section 143(3) read with section 147 of the Act. This Court permitted such amendment and also granted the ....
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....learned counsel has been decided in favour of the assessee and the SLP preferred by the department also has been dismissed by the Apex Court and thus on both the counts, notice is not sustainable and therefore, the Assessing Officer had no jurisdiction either to issue the notice or to frame re-assessment. 6. Learned senior counsel Shri Manish Bhatt appearing for the Revenue has urged that when the reasons were recorded by the Assessing Officer, he had the reason to believe and the law that was prevalent at the relevant point of time permitted him to hold such a reason and therefore, any subsequent change by way of pronouncement of judgement would not invalidate the reasons nor the process of reopening and the Court need not interefere. 6.1. On the contention raised of issuance of the notice of reopening exclusively at the behest of communication received from the audit wing, he urged that the Assessing Officer had applied his own mind as the only objection raised by the audit wing was in respect of interest from the trade debtors as not having been qualified for deduction under section 80IA and directed re-verification of the papers. He further contended that the communication fr....
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....as dismissed by the Apex Court holding that once the audit report is filed before the framing of assessment, the provisions of section 80IA (7) would be complied with as furnishing of such report at the time of filing of return is directory in nature and not mandatory. 12. Reverting back to the facts of the instant case, in light of aforementioned decisions, the assessee had submitted a separate report for all the undertakings claiming deduction under section 80IA, during the course of assessment proceedings. Therefore, the first ground of reopening, wherein it is alleged that interest from the trade debtors would be qualified for deduction under section 80IA only on the furnishing of separate reports, cannot be upheld. 13. With regard to second ground, it is alleged that the assessee company had received an interest of Rs. 21761.41 lakhs from GEB for late payment of its sale price. We notice that in case of Nirma Industries Ltd. v. Deputy Commissioner of Income-tax (supra) the plea of the department has been rejected holding that interest received from trade debtors towards the late payment of sale price, is required to be excluded from the profit of industrial undertaking as sa....