TaxTMI 
TaxTMI 
2016 (6) TMI 740
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....88 of 2016 pertains to the assessment year 2010-11 and the notice for reopening has been issued within a period of 4 years from the end of relevant assessment year. 3. Material facts being identical, they may be noticed from Special Civil Application No.86 of 2016 which are as under. 4. Petitioner is a company registered under the Companies Act. For the assessment year 200809, the petitioner had filed its return of income, declaring total income of Rs. 2.66 crores (rounded off) and had claimed deduction of Rs. 2.93 crores (rounded off) under Section 80IA of the Income Tax Act 1961 ('the Act' for short). The return of the petitioner company was taken in scrutiny. During scrutiny assessment, the Assessing Officer examined various issues including the claim of the petitioner of deduction under section 80IA of the Act. Under a communication dated 22.11.2010, the Assessing Officer called upon the petitioner to supply various details, which included the following: "3.8 Please submit the complete note on deduction claimed U/s. 80IA and how your company is satisfying the provisions of section 80IA." 5. In response to such communication, the petitioner replied unde....
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....ome at Rs. 3.02 crores and granted the claim of deduction under section 80IA of the Act by providing that the same shall be recalculated after giving cumulative effect from the assessment year 200405 and 200506. Significantly, he made no disallowances on the petitioner's claim of deduction under section 80IA on any count, though he did not record any findings in this respect. 8. To reopen such assessment, the respondent Assessing Officer issued notice dated 20.06.2014. He supplied the reasons recorded by him to issue the notice which read as under: " The assessee has claimed deduction u/s. 80IA of Rs. 2,93,61,164/in respect of Captive Power Plant of the assessee. During the course of assessment proceedings for A.Y. 201112 it was noticed that the assessee was claiming deduction u/s. 80IA of the Act in respect of Captive Power Plant of the assessee. It was seen during the assessment proceedings that 78.9% of the total profit derived from Captive Power Plant is in respect of sale of steam rather than generation of electricity. Further, it was seen that the profit from sale of steam was on account of the fact that the sale price of steam was taken arbitrarily. ....
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....aised objections before the Assessing Officer contending inter alia that the entire claim was accepted by the Assessing Officer after due scrutiny and verification of the claim. He also pointed out that the notice for reopening was issued beyond the period of four years from the end of relevant assessment year. The Assessing Officer however, rejected the objections of the petitioner by the order dated 20.10.2015. Hence, the petition. 10. Shri Divatia, counsel for the petitioner submitted that in all three assessment years, the Assessing Officer has recorded identical reasons for reopening the assessments previously framed after scrutiny. In all cases, the claim of the petitioner for deduction under Section 80IA of the Act was examined during the original assessment. Additionally, in two cases, the notices have been issued beyond four years from the end of relevant assessment year without there being any element of failure on the part of the assessee to disclose truly and fully all material facts. Counsel relied on the decision of full bench of Delhi High Court in case of Commissioner of Incometax v. Usha International Ltd., reported in 2012 348 ITR 485, to contend that once the ....
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....80IA of the Act, pointed out the price for transferring generated electricity by one division to another. Such working out included the cost of production of steam and the cost at which it was charged to the consuming unit. 13. It was only after verifying such details that the Assessing Officer in the order of assessment dated 31.10.2012, made no alteration in the petitioner's claim of deduction under section 80IA of the Act. He disallowed certain part of the petitioner's claim for depreciation, but no disallowance was made on the claim for deduction under section 80IA of the Act. In fact, in the assessment order he noted that the petitionerassessee had claimed the deduction on such power generation though, the power is captively used by separate industrial undertaking of the assessee company. 14. It can thus, be clearly seen that the entire claim of deduction of the petitioner under section 80IA was minutely scrutinized by the Assessing Officer in the original assessment proceedings. The Assessing Officer had raised queries and elicited the petitioner's response. Being satisfied about the claim of deduction, final order of assessment was passed. It may be that th....
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.... assessee after thorough scrutiny, it can hardly be stated by the revenue that the Assessing Officer can not be seen to have formed any opinion on such a claim. Such a contention, in our opinion, would be devoid of merits. If a claim made by the assessee in the return is not rejected, it stands allowed. If such a claim is scrutinized by the Assessing Officer during assessment, it means he was convinced about the validity of the claim. His formation of opinion is thus complete. Merely because he chooses not to assign his reasons in the assessment order would not alter this position. It may be a nonreasoned order but not of acceptance of a claim without formation of opinion. Any other view would give arbitrary powers to the Assessing Officer. 43. We are, therefore, of the opinion that in a situation where the Assessing Officer during scrutiny assessment, notices a claim of exemption, deduction or such like made by the assessee, having some prima facie doubt raises queries, asking the assessee to satisfy him with respect to such a claim and thereafter, does not make any addition in the final order of assessment, he can be stated to have formed an opinion whether or not in the....