TaxTMI 
TaxTMI 
2012 (9) TMI 963
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....facts of the case and in law the Ld. CIT(A) erred in allowing the assessee's claim of exemption u/s 10(23C)(iiiab) of the Act without appreciating the fact that the assessee is not wholly or substantially financed by the Govt. in view of Explanation to sub section (1) of section 14 of the Comptroller and auditor General's (Duties, Powers and Conditions of Service) Act, 1971 as the total Govt. grant during the year is less than 75% of the total expenditure of the assessee. 4. The Appellant prays that the order of the ld CIT(Appeals)-I, Mumbai be set aside and that of the Assessing Officer be restored. 2. Ground No. 1 is against the reopening of the assessment proceedings. The facts, as reproduced by the CIT(A) in his order are, that for the Assessment Year 2003-04 the return of income was filed on 14.10.2004 in Form No.3A along with computation of income, audited income & expenditure amount and balance sheet along with its enclosures disclosing total income as NIL. The regular assessment u/s 143(3) for the relevant assessment year 2003-04 was completed on 28.02.2006 confirming the returned income as assessed income at Rs. NIL and allowing the claim of exemption u/s 10(23C)(iiia....
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....ier dealt with by the AO in regular assessment, the time limit gets restricted to four years and in the instant case, the notice u/s 148 could only have been issued upto 31.03.2008, i.e. as per 149(1)(a) and as per first proviso to section 147. 5. The CIT(A), on consideration of detailed submissions made before him and reproduced in the impugned order, observes: 4.4 On comprehensive reading of the provisions, I find that the Parliament has in its wisdom used the word 'action' in the first proviso to section 147 but has used the word 'notice' in section 149(1). Under section 147 the assessment can be re-opened subject to satisfaction of circumstances specified in the said section. However once the assessment is reopened it is incumbent upon the A.O. to give notice u/s 148 to the assessee. The issuance of notice under sec 148 is subject to limitation specified in section 149. However where an order of assessment has been already made, there is an express bar to initiation of action after expiry of four years from the end of the relevant assessment year except in the circumstances stated in proviso to section 147. Section 149 pertains to time-limit for issuance of notice. Where ass....
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....ear period indicated above. The escapement of income from assessment must also be occasioned by failure on the part of the assessee. This is a necessary condition for overcoming the bar set up by the proviso to sec 147 of the Act. If this condition is not satisfied, the bar would operate and no action under sec 147 could be taken. The reasons supplied to the appellant do not consist of any such allegation. In the said reasons, nowhere it is mentioned that income has escaped assessment on account of any failure of the assessee. On the contrary, the reasons recorded indicate that the case has been reopened as the assessee has been wrongly allowed benefit u/s 10(23C)(iiiab). This explicitly shows that the assessment has been reopened as a measure to rectify the mistake of exemption granted to the appellant as per provisions of section 10(23C)(iiiab) of the Act. 4.9 Further it is found that the AO has relied on the discussions made in the assessment order for AY 2007-08 for forming a belief that the government grant for the current assessment year is less than 75% and not entitled for exemption u/s 10(23C)(iiiab). On examining the original assessment order for A.Y. 2003-04, I find t....
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....assessee under section 10(23c)(iiiab). This issue was dealt with by the AO in the regular assessment. Therefore, according to the AR, it was merely a change of opinion, which does not allow the AO to initiate the reassessment proceedings. The AR, relied on the following decisions : * CIT vs. Kelvinator of India Ltd :(320 ITR 561) SC * Aventis Pharma Ltd. vs. ACIT & Ors. :(323 ITR 570) Bom * Siesta Steel Construction (P) Ltd. vs. KK Shikare & Or :(154 ITR 547) Bom * Niba India & Anr. Vs. Smt. Arti Handa, ACIT & Ors. :(300 ITR 283) Bom * Sanghvi Swiss Refills (P) Ltd. Arti Handa, ACIT & Ors. :(300 ITR 276) Bom * CIT vs. Tube Investments :(11 DTR 73) Mad * CIT vs. Eicher Ltd. :(294 ITR 310) Del * India Steamship Co. Ltd. vs. JCTI :(275 ITR 155) Cal 9. The AR, therefore, pleaded that since the issue of change of opinion has been decided by a number of courts, including the Hon'ble jurisdictional High Court at Bombay, the reassessment proceedings be quashed. 10. We have heard the arguments and have perused the orders of the Revenue authorities. We find that the AO undertook reassessment proceedings under section 148 on 19.03.2010 on an assessment framed und....
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.... noted earlier and to the explanation furnished by the assessee during the course of assessment proceedings. It has been urged that there was no tangible material before the Assessing Officer on the basis of which he could have formed a reason to believe that income chargeable to tax had escaped assessment. Consequently, it has been urged that the assessment is sought to be reopened on a mere change of opinion, which is not permissible. During the course of submission, counsel appearing on behalf of the assessee assisted the court in perusing the entire record before the court, including in particular the disclosures which were made during the course of assessment. In order to obviate a repetition it would be proper to refer to the relevant aspects of the record while dealing with the submissions which have been urged on behalf of the assessee.." 12. The Hon'ble Bombay High Court, in this case, held (head note), "The power to reopen an assessment is conditional on the formation of a reason to believe that income chargeable to tax has escaped assessment. The power is not akin to a review. The existence of tangible material is necessary to ensure against an arbitrary exercise of ....
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....ause (b) Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. Explanation 2 to section 147 Explanation 2.-For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to incometax ; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return ; (ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E; (c) where an assessment has been made, but- (i) income chargeabl....
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....cer when the original order under section 143(3) was passed. The reasons disclosed to the assessee state that copies of the commencement certificates were made available by the Joint Commissioner of Income-tax subsequent to the order of assessment under section 143(3). Since the documents on the basis of which assessment was sought to be reopened had already been furnished to the Assessing Officer in the course of the proceedings under section 143(3), it cannot possibly be contended that the assessee had failed to disclose documents or the material facts. Moreover, it is also common ground before the court that a deduction has been granted under section 80IB(10) to the assessee for the assessment year 2002- 03. This statement of fact by the counsel appearing on behalf of the assessee has not been controverted by counsel for the Revenue during the course of submissions. We would, while concluding once again clarify that in the present case, we are not concerned with the question as to whether a deduction under section 80IB(10) was validly granted since the only question that falls for consideration is whether a case is made out for reopening of the assessment under the powers con....