TaxTMI 
TaxTMI 
2017 (11) TMI 1604
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....ereinafter called "the tribunal") read as under:- " 1. "On facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in allowing the appeal of the assessee ignoring the fact that the decision of the Hon'ble. ITAT in assessee own case for A. Y 2007-08 has not been accepted by the department and appeal u/s 260A has been filed before the Hon 'ble Bombay High Court. " 2. "On facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in considering the reopening the case as bad in law without considering Explanation-2 to section 147 and especially clause (c) and its sub-clauses (i), (ii) & (iv) of t he Income Tax Act, 1961." 3. On facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in considering the reopening the case as bad in law without appreciating the fact that no opinion has been formed on the issue of allowing deduction u/s. 80-1C in respect of component of "other income" which was not derived from industrial undertaking and therefore on this issue on which assessment is sought to be reopened there was no question of "change of opinion" as held erroneously by the Tribunal, and material ....
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....isallowed income of Rs. 9,56,18,376/- out of the above claim and allowed the balance amount as admissible deduction. It is seen that the assessee has claimed Export Incentives of Rs. 2,36,32,653/- under the head other income (Schedule 6). As export incentives have been held by the Supreme Court as having no nexus with manufacturing, the same are not eligible for deduction u/s. 80IC. Failure to do so has resulted in excess allowance of deduction under Section 80IC to the extent of Rs. 2,36,32,653/-. Therefore, income to the extent of Rs. 2,36,32,653/- has escaped assessment." Thus , the A.O had reason to believe that income chargeable to tax has escaped assessment due to failure on the part of the assessee to disclose truly and fully all material facts necessary for the assessment which led to the issuance of notice dated 13.06.2013 u/s. 148 of the Act which was duly served on the assessee, which notice was issued within four years from the end of the assessment year . Vide afore-said notice, the assessee was asked to file the return of income . The assessee in reply submitted that original return of income filed on 30.09.2009 u/s 139(1) may be treated as return of income filed i....
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....ion u/s 80IC in the original assessment proceedings u/s 143(3) r.w.s. 143(2) , wherein export benefits were considered by the AO to be eligible for computing deduction u/s 80IC and now by reopening the concluded assessment , is merely a change of opinion by the AO which is not permissible under law . It was also submitted by the assessee that reopening of the concluded assessment u/s 147 is done by the AO without any new tangible material coming into possession of the AO , which is not in accordance with law. It is also claimed by the assessee that the reopening of the concluded assessment u/s 147 is done based on audit objections which is not permissible. The assessee relied upon several decisions including Full Bench decision of Hon‟ble Delhi High Court in the case of CIT v. Kelvinator of India Ltd. 256 ITR 1 which was later affirmed by Hon‟ble Supreme Court in 320 ITR 561(SC). The assessee also relied upon several other decisions which are cited in the assessment order dated 30-01-2014 passed by the A.O. u/s 143(3) r.w.s. 147 . The A.O rejected the contentions of the assessee keeping in view decision of Hon‟ble Supreme in the case of Liberty India Limited v.....
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....e reopening was held to be bad in law. It was submitted that re-opening u/s 147 for the impugned assessment year was done within 4 years of the end of the assessment year and there was a decision of Hon‟ble Supreme Court in the case of Liberty India Ltd.(supra) dated 31.08.2009 wherein Hon‟ble Supreme Court had held that export incentives will not be considered while computing eligible profits for computing deduction u/s. 80IB as export incentives such as duty draw back and DEPB arise from the scheme framed by GOI and not derived from the eligible industrial undertaking. It was submitted that the assessee filed its return of income for the impugned assessment year only on 30.09.2009 which is after the pronouncement of judgment by Hon‟ble Supreme Court in Liberty India Limited(supra) which was delivered on 31-08-2009 which was prior to the filing to the return of income on 30-09-2009. It was submitted that claim of the assessee was ex-facie wrong and hence A.O cannot form any opinion during the course of assessment proceedings u/s. 143(3) which is contrary to the decision of the Hon‟ble Supreme Court which is law of the land binding on all authorities. He als....
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....upreme Court judgement which was very much in force at the time of filing of return of income with the Revenue. It is also submitted that reopening of the concluded assessment u/s 147 was done by Revenue within 4 years. The learned counsel for the assessee drew our attention to page no. 101 to 118 of paper book wherein the tax auditor certificate dated 29-09-2009 is placed for determine the amount eligible for deduction u/s 80IC and export benefits were included by the auditors for the purpose of computing deduction u/s. 80IC in certificate in form no 10CCB. Our attention was also drawn to decision of Hon‟ble Bombay High Court in the case of CIT v. Arony Commercial Ltd. (2017) 393 ITR 673(Bom. HC) , wherein it was held that change of opinion of the A.O cannot be a ground for reopening if the query is raised during the assessment proceedings and the assessee replied to it which means that it was subject of consideration by the A.O while completing original assessment. He also relied upon the decision of the Hon‟ble Bombay High Court in the case of ICICI Bank v. DCIT(2012) 65 DTR 249 2012 . The learned counsel for the assessee also relied upon the second proviso to Sectio....
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....the assessee has included export benefits such as duty draw back/ DEPB amounting to Rs. 2,36,32,653/- to compute profits eligible for deduction u/s 80IC being derived from the aforestated industrial undertaking , which was allowed by the A.O in the original assessment order dated 26-12-2011 framed u/s. 143(3) of the Act. The AO excluded certain other heads of other income such as rent, sale of scrap, insurance claim , provisions no longer required etc but export benefits were not excluded while computing profits eligible for deduction u/s 80IC being derived from the aforestated industrial undertaking , while framing original assessment u/s 143(3). In-fact , the AO query during the original assessment proceedings were never directed towards the exclusion of export benefits while computing eligible profits for computing deduction u/s 80IC while the query itself was directed towards exclusion of other incomes such as rent, sale of scrap, insurance claim , provisions no longer required etc. This claim of deduction u/s. 80IC by inclusion of export benefits for computing profits eligible for deduction u/s 80IC is ex-facie wrong claim setup by the assessee in the return of income filed wi....
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....force of law and question of change of opinion does not arise in such situation . Thus, the contention of the assessee that there is a change of opinion by the AO vide reopening of the concluded assessment by invoking provision of Section 147 in the instant case will not fall under the ambit of change of opinion as the AO did not and could not have formed any opinion contrary to the binding decision of Hon‟ble Supreme Court and any such opinion even if formed by the AO is non-est, bad in law having no force of law, hence reopening of the concluded assessment by the AO in the instant case u/s. 147 is perfectly valid being in accordance with law and is therefore upheld as income having escaped assessment due to claim of deduction u/s 80IC qua export benefits was wrongly allowed by the AO in the original assessment framed u/s 143(3) directly in contravention of the binding ratio of law laid down by Hon‟ble Supreme Court in the case of Liberty India Limited(supra) . On merits, the Hon‟ble Supreme Court has already decided the issue in Liberty India Limited (Supra) and the issue is no more res-integra as decision of the Hon‟ble Supreme court in case of Liberty In....