TaxTMI 
TaxTMI 
2019 (5) TMI 351
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.... end of the relevant assessment year, unless there is a failure on the part of the Assessee to fully and truly disclose all material facts necessary for assessment. 3.Mrs.S.Srimathy, the learned counsel appearing for the appellant Revenue has urged before us that the reasons, for reopening AY 2003-04 as communicated by the assessment authority to the assessee vide his communication dated 20.04.2010, were that the Assessee claimed excess deduction under Section 80IB(10) of the Income Tax Act, 1961 to the extent of Rs. 68,52,835/- in respect of its Building Project Vajra F Block, which was required to be disallowed as the said building comprised of residential units over the prescribed limit of 1500 sq. ft. for each residential unit. 4.She submitted that the Assessee failed to disclose all the relevant particulars for the said project about the difference of areas of residential units either below 1500 sq. ft. or over 1500 sq. ft. Therefore, there was a failure on the part of the Assessee to disclose all the relevant facts truly and fully and therefore, the limitation of 4 years for re-opening did not apply to the present case and the Assessing Authority was justified in re-openin....
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....he reason recorded for re-opening of the Assessment Year 2003-04 is reproduced as under: "During the scrutiny proceedings for AY 2007-08, it was found that for the financial year relevant Assessment Year 2003-04, the assessee company claimed deduction u/s 80IB(10) of the Income-tax Act, 1961, for its projects Vajra E & F Block and Porkudam Phase-I. In the project, Vajra E Block and Porkudam Phase-I, the assessee company had constructed and sold flats of less than 1500 sq. ft. and had claimed relief under section 80IB(10). In the case of Vajra F Block the assessee had constructed flats both more than 1500 sq. ft. and less than 1500 sqft and had claimed 80IB(10) proportionately to the sale of flars less than 1500 sqft. Assessee's claim of 80IB(10) in relation to the separate project approved for Vajra "F" Block is not correct on the following grounds. "It is evident from the plain reading of the section 80IB(10) that the benefit of deduction is for house project as a whole and all the residential units of the project should satisfy all the conditions simultaneously to be eligible for deduction. Each block (or) house is not a separate project and hence deduction u/s 80IB(10) c....
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.... proceedings is beyond the period of four years from the end of the assessment year, the Assessing Officer must necessarily record not only his reasonable belief that income has escaped assessment but also the default of failure committed by the assessee. Failure to do so would vitiate notice and the entire proceedings". This decision has been accepted by the department. Therefore, the facts are clear that the assessment has been reopened after a period of four years from the end of assessment year without there being any failure on the part of the assessee and such proceedings are barred by the proviso to Section 147. The present proceedings are clearly due to change of opinion and not due to any failure on the part of the assessee. Reopening due to change of opinion has been held to be invalid by the Apex Court in Kelvinator India Ltd. (320 ITR 561 (SC). It appears that the reopening has been done due to change of opinion because of the Tribunal's decision in our case which is not permissible under the proviso to Section 147. In view of the above please pass a speaking order as required by the Supreme Court case in GKN Drive shafts (India) Ltd. Vs. ITO (259 ITR 19 (SC) ....
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.... too on the ground that the residential flats over 1500 sq.ft. were not disclosed by the Assessee has no legs to stand upon. Section 80IB(10) of the Act grants deduction to the Assessee engaged for the business of developing and building housing projects approved before 31.03.2008 subject to certain conditions and the conditions relevant for the case in hand are quoted below for ready reference: (c) the residential unit has a maximum built-up area of one thousand square feet where such residential unit is situated within the city of Delhi or Mumbai or within twenty-five kilometres from the municipal limits of these cities and one thousand and five hundred square feet at any other place; 13.We are satisfied that since a proportionate claim was made by the Assessee, who disclosed all the details at the time of original assessment and an assessment order was passed by the Assessing Authority under Section 143(3) of the Act applying his mind to the relevant facts, this impugned re-assessment proceedings initiated after the end of four years in the present case were without any valid rhyme or reason and on a mere change of opinion by the Assessing Authority. On a mere change of opini....