TaxTMI 
TaxTMI 
2015 (4) TMI 763
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....nt order made pursuant to an invalid/illegal reopening cannot be sustained and is, therefore, annulled ignoring the fact that AO, after having noticed during the course of assessment proceedings for A.Y. 2008-09 the assessee's failure to disclose fully and truly all the material facts necessary for assessment with regard to obtaining and filing the completion certificate as stipulated in explanation appended to sub-sec (10) of sec. 80IB, re-opened the case. 3. That Ld. CIT (A) is not justified in allowing the appeal of the assessee on relying the decision of Hon'ble Supreme Court in the case of Hindustan Aeronautics Ltd. vs CIT (243ITR 808) ignoring that the facts and circumstances of the instant case which are totally different with that of relied case. 4. That Ld. CIT (A) has erred in law and on facts in relying on the decision of the case of Hindustan Aeronautics Ltd. vs CIT (243ITR 808), which relates to assessment year 1970-71 whereas the I.T. Act has been amended (w.r.t. section 263, 264 of the Act) by Finance Act 1988 w.e.f. 01/06/1988 providing for partial mergers only of such orders. 5. That the order of the Ld. CIT (A) being erroneous in law and on facts which ....
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....ction under section 80-IB(10) of the Act. The main defect pointed out by the Assessing Officer, before reopening the assessment, was with regard to the non-obtaining the approval of the housing project from the competent authority, size of the housing project & size of the plot on which housing project was raised and also completion certificate issued by the competent authority. It was further contended by the ld. D.R. that since this aspect was not examined during the course of original assessment while allowing deduction under section 80-IB(10) of the Act, the reopening is valid. 8. Having given a thoughtful consideration to the submissions of the ld. D.R. and from a careful perusal of the order of the ld. CIT(A), we find that the ld. CIT(A) has observed in his order that the original assessment was framed under section 143(3) read with section 147 of the Act wherein the Assessing Officer did not fully allow the claim of the assessee under section 80-IB(10) of the Act and the assessee took the matter with the ld. CIT(A) and the ld. CIT(A) vide his order dated 30.3.2010 allowed the claim of deduction under section 80-IB(10) of the Act. Against this order, the Department took the ....
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.... wherein the claim of the assessee under section 80IB(10) was allowed. The relevant portion of the appeal order is as under: "6. During the course of appeal proceeding AR appeared and furnished copy of assessment order for A. Y. 2001-02 as well as copy of appeal order for A. Y. 2005-06 passed by the CIT(A)-I, Kanpur vide order dated 11-03-2008 from these order, it is observed that the issue in question as well as the appellant plea for allowance of deduction u/s.80IB in respect of addition of disallowance made in assessment order as already been decided in CIT(A) order No. CIT(A)-I/292/CCIII/ KNP/07-08 vide para 10, which is as under: "10. In the light of the above, the legal position which emerges is that any deduction under Chapter-VIA is to be made with reference to the income included in the gross total income. The provision of section 40AB are very clear, wherein it has been laid down that where any deduction is required to be made or allowed under any section (except section 8M) included in Chapter-VIA under the heading "C-deduction in respect certain incomes" in respect of any income of the nature specified in that section, which is included in the gross total income of th....
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.... has escaped assessment." 4.3.1 Based on this proviso, the appellant has challenged the said reopening by stating that the AO could not have initiated action u/s. 147/148 as the income sought to be reassessed had already been the subject matter of appeal. In this regard, I have gone through the Memorandum to the Finance Act 2008 explaining the introduction of the 2nd Proviso to sec.147 wherein it has been stated "that it has been held in a case where an assessment is made the subject matter of the appeal, only that part of the AO's order merges with the appellate authorities order in respect of which the appellate authority has exercised the appellate jurisdiction-[( CIT vs Sakseria Cotton Mills Ltd. 124 ITR 570 (Bombay)]. Hence, the legislature intent is clear that if an income has escaped assessment and which has not been subject matter of an appeal, reference or revision, notice u/s.148 can be issued for assessment or reassessment of that income." 4.3.2 In this case, income on account of sale of housing units [(which was subjected to deduction u/s 80IB (10)] was already disclosed in the Profit & Loss account of the assesses and it is not the case of AO that there was some ....