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2018 (5) TMI 441
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....The respondent claims that the petitioner company was not entitled to claim this deduction. The petitioner raised objection to the proposed reopening of the assessment. The objection raised by the petitioner against reopening of the assessment U/Sec. 147 r/w Sec. 148 of the I. T. Act is rejected. Aggrieved thereby present writ petitions. 4. Mr. P. M. Shah, the learned senior advocate for the petitioner strenuously contends that the action is proposed only because of the change in the opinion of the assessing officer. The learned senior advocate submits that, the petitioner company is engaged in business of development and selling seeds. Research and development of new variety of seeds including hybrid seeds is the integral part of the business of the petitioner company. The petitioner has set up a in­house research and development facility at Hanumantgaon, Tq. Gangapur, Dist. Aurangabad. The in­house research and development facility of the petitioner company is recognized by the Ministry of Science and Technology. According to the learned senior advocate, the recognition was renewed from time to time without any break upto 31.03.2019. 5. The learned senior advocate f....
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....ty cannot go behind the approval accorded by the prescribed authority that is D.S.I.R. The learned senior advocate relies on the judgment of the Gujrat High Court in a case of CIT Vs. Claris Life Science reported in 2008 SCC Online Guj. 447 and the judgment of the Delhi High Court in a case of CIT Vs. Sandan Vikas reported in (2011) SCC Online Del 101. 9. The learned senior advocate further submits that, after due application of mind the original assessment order is passed. The issue regarding entitlement to the expenditure of scientific research U/Sec. 35(2AB) of the I. T. Act having been raised by the assessing officer at the time of original assessment U/Sec. 143(3) of the I. T. Act and no addition having been made by the assessing officer that issue of being satisfied with the explanation of the assessee, reopening of the assessment on the very same issue is a mere change of opinion and hence not permissible. In the original assessment proceedings U/Sec. 143(3) of the I. T. Act, the point directly and substantially at issue was the entitlement of the petitioner to claim deduction U/Sec. 35(2AB). It is not a case of non assessment of item of income chargeable to tax. The peti....
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..... 147 of the Limitation Act. Those four years expired on 31.03.2015 and 31.03.2016 and notices for reopening of assessment are issued on 26.03.2017 that is beyond four years. It is not a case of failure on the part of the assessee to disclose fully and truly all material facts. In the reasons recorded for reopening the assessment, the assessing officer does not state that there is failure to disclose fully and truly all material facts at the time of original assessment, hence invoking the jurisdiction after expiry of four years from the end of relevant assessment year is without jurisdiction. The learned senior advocate further submits that, making a claim, which may not be sustainable in law, will not amount to furnishing inaccurate particulars. The learned senior advocate relies on the judgment of this Court in a case of Sound Casting Pvt. Ltd. Vs. Deputy Commissioner of Income Tax reported in 2012 (3) Mh. L. J. 764. The reason recorded for reopening assessment is that the petitioner has wrongly claimed certain deductions, which it was not entitled to. There is a well known difference between a wrong claim made by an assessee after disclosing all the true and material facts and a....
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....failure on the part of the assessee to disclose fully and truly all material facts. 13. Mr. Alok Sharma, the learned advocate for the department submits that, at the stage of issue of notice, the only question is whether there was relevant material on which reasonable person could have formed a requisite belief. Whether the material would conclusively prove the escapement is not to be considered at this stage. The formation of belief by the assessing officer is within the realm of subjective satisfaction. The learned counsel relies on the judgment of the Apex Court in a case of ACIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. reported in (2007) 291 ITR 500 (SC). It is the duty of the assessee to place truly and fully all the material facts before the assessing officer. Only because the assessing officer could not have made further enquiry into the matter, but the fact that he did not make any further enquiry would not take away the case out of ambit of reopening U/Sec. 147 and 148 of the I. T. Act. The assessee had not disclosed that it did not possess Form No. 3CM and as such did not disclose the material facts truly and fully. The learned advocate relies on the judgment of the A....
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.... the conditions precedent spelt out in the proviso to Section 147, equally an assessee who seeks the benefit of the proviso to Section 147 must make a full and true disclosure of all primary facts." 14. The learned advocate further submits that, this Court would not invoke its writ jurisdiction to interdict a proceeding U/Sec. 148 of the I. T. Act unless it is a case of without jurisdiction. He relies on the judgment of this Court at its principal seat at Bombay in Writ Petition No. 2860 of 2012 dated 18th June, 2014. The learned advocate further submits that, unless and until petitioner has a certificate in Form No. 3CM, the petitioner would not be entitled for the benefit of deduction U/Sec. 35(2AB) of the I. T. Act while granting a certificate in Form No. 3CM various guidelines are to be observed and it is only if all the conditions are satisfied, then only the certificate in form No. 3CM is issued and if the petitioner possess the certificate under Form No. 3CM, then only the petitioner would be entitled for deduction U/Sec. 35(2AB) of the I. T. Act. 15. We have considered the submissions canvassed by the learned counsel for respective parties. 16. This Court would inv....
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....disclosed that it was not granted certificate under Form No. 3CM for the relevant period. Form No. 3CM is required for the approval of R. & D. facility U/Sec. 35(2AB) of the I. T. Act. The petitioner did not disclose that, after the year 2009, the petitioner could not get Form No. 3CM for approval of R. & D. facility U/Sec. 35(2­AB) of the I. T. Act, though it had certificate of registration of the in­house research and development unit. The petitioner ought to have fully and truly disclosed that after the year 2009, the petitioner could not get Form No. 3CM for the purpose of Sec. 35(2AB) of the I. T. Act. The said information was not provided by the petitioner. 20. In view of that, reopening the assessment cannot be said to be mere change of opinion. However, the effect of not possessing Form No. 3CM on the deduction for the expenditure for in­house research and development would be a subject matter, which will be required to be dealt by the Assessing Officer at the time of assessment pursuant to the notice of reassessment. We would not preempt any decision, as the same would be within the realm of the assessing officer. The assessing officer would be the best judg....
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....) is Secretary, Department of Scientific and Industrial Research, Government of India. The assessee has not produced any document of approval of the facility by such prescribed authority for the period of 1st Apr 2009 to 31st March 2010. The document that is produced was valid only till 31st March 2009 and the same has not been renewed by the prescribed authority beyond 31st March 2009 meaning thereby that the prescribed Authority does not approve the assessee for the purpose of claiming deduction u/s 35(2AB). However, the assessee has wrongly claimed deduction u/s 35(2AB). A letter was issued to Dr. Girish Sahnia, Secretary, Department of Scientific & Industrial Research, New Delhi­110001 details regarding approval of facility in respect of provisions of section 35(2AB) of the Income Tax Act in the case of Ajeet Seeds Pvt. Ltd. Reply received from Ministry of Science and Technology Department of Scientific and Industrial Research Technology Bhavan, New Delhi on 24/01/2017 to the above mentioned letter is as under :­ Please refer to your letter No. ABD/ACIT/Cir­1/Ajeet Seeds/2016­17/317 dated 28.12.2016 on the subject cited above. I am directed to convey as....