TaxTMI 
TaxTMI 
2016 (9) TMI 860
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....crutiny and vide order dated 07.12.2004, in exercise of powers under section 143(3), the assessment order came to be framed. Similarly, for another assessment year 2003-04, the petitioner has declared his income as again 'Nil' by declaring gross total income as Rs. 68,97,218/- and with respect to that year also, the scrutiny assessment was framed on 30.12.2005. In the next assessment year, 2004-05, the petitioner filed the return of income under section 139(1) of the Act declaring total income at Rs. 3,15,13,990/- after claiming deduction under section 80E(2)(c) as also under section 80P(2)(d) and under section 80IB in respect of cattle feed as well as BanasII dairy plants. The said return was accompanied by the statement of income, as audited accounts and audit reports which was under section 44AB of the Act. Assessing Officer pursuant to the said submission, as selected the case of the petitioner for scrutiny and issued notice under section 143(2) and 143(1) of the Act, requiring certain details to be provided by the petitioner including, inter alia, the details of separate trading particulars and profit and loss accounts of cattle feed and BanasII expansion undertakings ....
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....entitled to claim deduction under section 80IB of the Act in respect of all units including the units earlier set up" and by way of such common order, the Tribunal disposed of the appeals filed by both the sides. It is against this order passed by the Tribunal, the parties have approached the High Court of Gujarat by way of preferring the Tax Appeals. The Revenue has preferred an appeal being Tax Appeal No.1042 of 2009. The said appeal came up for consideration before this Court on 15.03.2011 and by a detailed order, the Tax Appeal came to be dismissed and similarly, the Tax Appeal No.1043 of 2009 also came to be disposed of. The issue related to that as such has been gone into during the entire passage of litigation. Still however, after more than four years of the end of relevant assessment year, the impugned notice came to be issued by the department under section 148 of the Act on 28.03.2011 with respect to the assessment year 2004-05. 5. On receipt of the said notice came to be issued by the department vide letter dated 28.04.2011, a request was made by the petitioner to the department to furnish the reasons which have been recorded for assuming jurisdiction under section 1....
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....ile deducting such past losses, the assessee is entitled to ignore the fact that certain losses have actually lapsed in view of applicability of Section 79 of the Act. This proposition we have already answered that the losses will not lapse and the provisions of Section 79 will not apply in view of the provisions of Section 80IA(5) of the Act. We find that the lower authorities have rightly taken the view that in view of Section 80IA(5) of the Act which starts with non obstante clause, it is wide enough to override the provisions of Section 79 and thereby ignore the past losses. There is no doubt that Section 80IA(5) starts with non obstante clause which overrides the applicability of the provisions of the Act and has provided special mode for computation of the profits & gains eligible for deduction u/s 80IA(1) of the Act and AO is bound to compute the deduction after applying the provisions of Section 80IA(5) of the Act." 4. In the case of the assessee, the assessee has not set off the previous year losses as per Sec.80IA(5) and the above said latest judgments and claimed deduction u/s. 80IB in the A.Y. 2004-05. Thus, the assessee has claimed excess deduction u/s. 80IB. ....
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....5.12.2006, the Chartered Accountant who represented the petitioner, has attended the hearing before the Assessing Officer and has clearly pointed out during the course of assessment proceedings with respect to this claim made under section 80IB, both with respect to BanasII expansion as also cattle feed. Paragraph 3 of the said assessment order reflected on page 98 is also specifically referring to. In addition thereto, the counsel submitted that during the said assessment proceedings, after considering the material, even the conclusion also came to be arrived at by the Assessing Officer, which is reflected on page 106 which was then the subject matter of the further appeal and right upto the High Court of Gujarat and therefore, during this entire process, the material was examined and dealt with by the Assessing Officer. Even in addition thereto, on page 147, there is a specific reference which has been brought to the notice of this Court about the claim which has been made under section 80IB of the Act. Learned counsel by relying upon such documents, have submitted that during the course of assessment proceedings, details have been fully and truly provided by the petitioner and i....
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....espondent authorities deserves to be quashed and set aside. 8. To oppose the petition, learned counsel for the Revenue Mr.Nitin K. Mehta has submitted that there is specific element of non disclosure of primary facts while claiming deduction on the part of the petitioner. Learned counsel submitted that there was a nondisclosure of unabsorbed loss of previous year and the nature of allowance was not substantiated by any cogent material. Learned counsel further submitted that what was scrutinized was an issue of disallowance, whereas, computation with respect to such claim was never the subject matter of scrutiny and therefore, the petitioner has not disclosed primary facts before the authority. It is always open for the authority to reopen the issue and consequently assessment. Learned counsel has submitted that the reasons which have been recorded are valid reasons based upon strong application of mind on the issue and therefore, even if it is after a period of four years, it is open for the authority to reopen the issue, more particularly when the basic issue pertaining to computation in respect of the claim has never been the subject matter of scrutiny and therefore, by conten....
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.... 11. First decision which has been relied upon and canvassed by the petitioner is the decision reported in case of Austin Engineering Co. Ltd. v. Joint Commissioner of Incometax, reported in [2009] 312 ITR 70 (Guj), wherein, in the said decision it has been clearly held that merely because subsequently, the higher Court pronounced the law to be otherwise, on the date of filing of the return of the income when the assessee made a claim for deduction, the claim could be termed to be neither lacking in material particulars nor could be termed to be untrue so as to justify reopening of assessment on basis of Apex Court decision after expiry of four years from relevant assessment year. Relevant extract of the said decision deserves to be quoted here. "7. The two decisions of the Supreme Court on which reliance has been placed on the respondentauthority are both in context of the provisions of Section 147 (b) of the Act as it then stood before 01-04-1989 and hence, cannot carry the case of the Revenue any further. Section 147 (b) of the Act itself stipulates that reassessment is permissible within a period of four years on receipt of information from an external source. But the ....
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....s down that where an assessment under subsection (3) of section 143 or the said section has been made for the relevant assessment year, no action shall be taken under the section after expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under subsection (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment. Thus, for the purpose of invoking section 147 after the expiry of four years from the end of the relevant assessment year, the income chargeable to tax should have escaped assessment by reason of failure on the part of the assessee either (i) to make a return under section 139 or in response to a notice issued under subsection (1) of section 142 or section 148, or (ii) to disclose fully and truly all material facts necessary for his assessment. In the facts of the present case, it is an undisputed position that there is no failure on the part of the assessee insofar as the first condition is concerned. Insofar as the second cond....
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....gs under section 147 of the Act stand vitiated and as such cannot be sustained." 13. Learned counsel for the petitioner has yet relied upon another decision of the Apex Court, in case of Commissioner of Incometax, Delhi v. Kelvinator of India Ltd. , reported in [2010] 187 TAXMAN 312 (SC) and conveyed with respect to a concept of change of opinion it was submitted on the basis of said decision, that after 01.04.1989, the Assessing Officer has no power to reopen provided there is a tangible material to come to the conclusion of escapement of income and therefore, it appears from the record that the reasons which have been recorded, reflects only sole ground about subsequent change in law. 14. In the reasons it is reflected an issue pertaining to computation of deduction under section 80IB of the Act has been dealt with by the Tribunal at Ahmedabad Bench, which is reported in 2008 113 ITD 209 (supra) in which, it has been held that the provisions of section 80IA have to be complied with for the purpose of computation of deduction under section 80IB and based upon Vodafone Essar Gujarat Limited, which also affirm very same view, the authority has formulated an opinion to reopen t....
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....Section 147, stating that the assessee has not disclosed details and other related facts as to the volume of transaction, buying and selling of shares/securities, which would enable the Assessing Officer to ascertain and determine the real nature and character of the transactions and in the absence of such primary details, which should have been furnished by the petitionerassessee, it cannot be said that there is a full and true disclosure of all material particulars relating to the assessment year under consideration. This, clearly, is nothing but an attempt to supplement and improve upon the reasons recorded as reproduced in letter dated 28042008, by adding something which is not recorded initially." Whereas, herein in case on hand the assessee petitioner has even disclosed all primary facts so element of non disclosure is not reflecting on record. 17. In view of above situation, yet another decision of this Court, in case of Patel Alloy Steel (P.) Ltd. v. Assistant Commissioner of Incometax (OSD) Circle - 5, Ahmedabad, reported in [2013] 35 taxmann.com 353 (Gujarat) was cited by the learned counsel for the petitioner which is also covering the issue and it is culled out fr....