TaxTMI 
TaxTMI 
2016 (10) TMI 404
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....tment, this claim of exemption under section 80IB(10) had been scrutinized by Assessing Officer and finally assessment order to that effect came to be passed under section 143(3) of the Act on 30.09.2005. Subsequent to that, the petitioner has received the impugned notice under section 148 of the Act for the assessment year 2003-04 on the premise that income of the petitioner has escaped assessment within the meaning of section 147 of the Act and thereby, called upon the petitioner to justify. On receipt of such notice, the petitioner has submitted a letter to respondent asking for reasons which have been recorded for the purpose and requested the authority to treat the original return which had been filed as return in response to impugned notice and the said letter was sent to the department on 17.06.2010. IT appears from the record that subsequently the notice for hearing under section 143(1) as also under section 141 of the Act came to be issued and under a letter dated 08.12.2010, the reasons which has been recorded for the purpose of reopening the assessment came to be supplied. On receipt of the said reasons, a detailed objection came to be filed by the petitioner vide order ....
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...., reasons to believe that due to illegitimate claim of deduction of Rs. 71,88,961/made by the assessee u/s. 80IB(10) of the I. T. Act, income chargeable to tax has escaped assessment within the meaning of section 147 of the I. T. Act." 4. Learned counsel has further drawn the attention that on 08.12.2010, the query was raised by the department asking the petitioner to justify the claim and specific particulars related to housing project being undertaken by the petitioner was asked. The said queries are reproduced hereinafter. "(1) Please furnish complete details of housing project constructed along with complete details and relevant evidences. (2) You have claimed deduction u/s.80IB(10) of the I.T. Act. You are, hereby requested to explain the claim along with relevant details and evidences in support of the claim. (3) The claim of deduction u/s.80IB(10) of the I.T. Act amounting to Rs. 71,88,961/is proposed to be disallowed in view of the reasons recorded while reopening the assessment. You are thereby requested to showcause why the claim of deduction should not be disallowed." 5. In response to the said queries which have been raised by the department under a communic....
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....e to disclose fully and truly all material facts necessary for the assessment. In the present case, as pointed out above, assessment order u/s. 143(3) of the Income Tax Act, 1961 has been passed after scrutinizing all material facts which were submitted to the Assessing Office and, therefore reopening of the assessment is bad at law. (3) It is also submitted that Explanation to Section 80IB (9) has been inserted specifically to exclude undertaking which executes housing project as works contract. In the present case, housing project has not been executed by way of works contract which is clear from the copy of the Development Agreement submitted during the course of assessment which makes clear that the project has been executed as a Developers only taking all the responsibilities relating to planning, developing and selling the units and also entire financial responsibility. Therefore, question of our firm having executed works contract does not arise at all." 6. The record indicates further that in response to the said aspect, a show cause notice dated 08.12.2010, to which reply has also been forwarded explaining the effect of section 80IB(10) of the Act also and the petitio....
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.... part of the petitioner. It is only on the basis of insertion of explanation attached to section 80IB(10) of the Act with retrospective effect. The petitioner has truly and fully disclosed all material facts pertaining under section 80IB(10) of the Act. 9. To meet with this contention, counsel for the Revenue Mr.Nitin K. Mehta has contended that the authority is justified in taking action of reopening of assessment in view of the insertion of explanation to section 80IB(10) of the Act with retrospective effect and therefore, counsel submitted that full effect of such amendment is to be given and therefore, learned counsel submitted that the action on the part of the respondent authority is justified. Counsel has submitted candidly that there is no element of non disclosure alleged in the reasons for reopening, therefore, based upon the main contention about the insertion of explanation to section 80IB(10) of the Act with retrospective effect, counsel submitted not to entertain the petition. 10. Having heard learned counsel appearing for the respective parties and having gone through the relevant material on record, it transpires that the action initiated by the authority is beyon....
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....penditure which would have been much higher than the amount of investment allowance and depreciation allowance taken together." 12. Yet in another decision, a similar view is taken. In case of Sadbhav Engineering Ltd. v. Deputy Commissioner of Incometax reported in (2011) 333 ITR 483 (Guj), it has been held that especially when the proceedings under section 147 have not been initiated by reason of any failure on the part of the petitioner to disclose truly and fully all material facts necessary for its assessment, for assessment year under consideration, the insertion of explanation attached to section 80IB(10) of the Act will not have any bearing and while dealing with this very issue, the Court has held as under: "From the reasons recorded it is apparent the assessments are sought to be reopened on the ground that as per the explanation given below subsection (13) of section 80IA of the Act, which has been substituted by the Finance Act No.2 of 2009 with retrospective effect from 1.4.2000, deduction under section 80IA would not be admissible to an assessee who carries on business which is in the nature of works contract. That the petitioner assessee being a civil contractor w....