TaxTMI 
TaxTMI 
2016 (9) TMI 1578
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....d in holding that the reopening of the assessment u/s 148 was valid without appreciating that the notice issued u/s 148 was bad in law and accordingly, the reassessment be declared null and void. 2] The assessee submits that the reopening is bad in law on account of the following reasons:- a. The assessment u/s 143(3) was completed and the reopening is beyond 4 years from the end of the relevant assessment year and since all the material facts were duly submitted by the assessee in the course of original assessment proceedings, the reopening is not valid since there is no failure on the part of the assessee to furnish the material facts. 3] The learned CIT(A) erred in holding that the assessee was not entitled to claim deduction u/s 80I of Rs. 5,91,902/- on the ground that the assessee had not established any new industrial undertaking in A.Y. 1991-92. 4] The learned CIT(A) erred in holding that- a. The assessee was not able to demonstrate that it had set up a new industrial undertaking in A.Y. 1991-92. b. There was no separate identity between the old unit and the new unit and hence, the assessee was not entitled to claim the deduction. c. The manpower, electricity c....
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....r section 80I of the Act, the assessee was asked to file the details of depreciation as per Income Tax Act from assessment year 1991-92 onwards. From the facts and the statements as well as the depreciation chart, the Assessing Officer noted that in assessment year 1995-96 the assessee had claimed the aforesaid deduction on the introduction and manufacture of new electronic product called EXMP-8 Programmable Logic Control. On examination of the fact of case, nature of business, history of the case, statement of managing partner Shri F.N. Merchant and other factors noted by the Assessing Officer, he pointed out that the assessee had not derived income from new industrial undertaking and therefore the deduction under section 80I of the Act was held to be not allowable to the assessee. The history of the business carried on by the assessee from the year 1982 is reproduced by the Assessing Officer under para 4.3 at pages 3 and 4 of the assessment order. The Assessing Officer while completing the assessment proceedings for assessment year 199596 observed that the assessee was manufacturing electronic products which have changed from pace of time, technology, requirement of market and ec....
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....07, the Assessing Officer has failed to give appeal effect to the directions of Tribunal and the same has become time barred. Our attention was drawn to the remand report filed by the Assessing Officer dated 10.08.2012 in appeal before the CIT(A) relating to assessment year 1992-93, wherein in para 3, it has been acknowledged that the claim of assessee is from assessment year 1991-92. The Assessing Officer in the remand report has relied upon earlier remand report dated 19.08.2004, which confirmed that the first year of operation for claim of deduction under section 80IA of the Act was 1991-92, copies of both the remand reports are placed at pages 276 and 236 of the Paper Book. Our attention was further drawn to the letter of Addl. CIT forwarding the remand report of Assessing Officer, which is dated 24.08.2012, which is placed at page 275 of the Paper Book, wherein the Addl. CIT has also observed that the finding by Assessing Officer was that on verification of record, it is clear that claim of deduction under section 80I of the Act was made in assessment year 1991-92. The learned Authorized Representative for the assessee pointed out that the appeal in the instant assessment yea....
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.... summarized the arguments to state that since the first year of claim of deduction under section 80I of the Act i.e. assessment year 1991-92 was not disturbed, then the said deduction cannot be disturbed in the subsequent years, since there is no change in facts. Further, he pointed out that till date no appeal effect has been given to the finding of Tribunal in assessment year 1995-96, which had to be given within one year from the end of financial year in which the order of Tribunal was passed implies that the benefit has been given to the assessee under section 153(2)(A) of the Act and hence, the same is to be allowed in all the years under appeal. 9. The learned Departmental Representative for the Revenue on the other hand, pointed out that the Assessing Officer has given appeal effect to the order of CIT(A) and the Tribunal, but the Assessing Officer has also furnished report dated 09.08.2016, wherein he has admitted that the appeal effect to be allowed is barred by limitation and hence implies that the same has been allowed to the assessee. 10. We have heard the rival contentions and perused the record. The issue arising in the present appeal is in relation to the claim of ....
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....s 234 to 236 of the Paper Book, the Assessing Officer reports that after verification of the case records it is seen that the assessee firm has commenced commercial products of EXMP-8 PLCs in the year ending 31.03.1991 and claimed the deduction under section 80I of the Act in the return of income for assessment year 1991-92, therefore, the first assessment year to claim the deduction under section 80I of the Act was assessment year 1991-92 and not 1992-93. Another remand report was submitted by the Assessing Officer dated 10.08.2012, copy of which is placed at pages 276 and 277 of the Paper Book, in which reference was made to the earlier remand report of the Assessing Officer dated 19.08.2004, in which it was mentioned that the first assessment year for claim of deduction under section 80I of the Act was assessment year 1991-92 and not assessment year 1992-93. It was further reiterated by the Assessing Officer in the second remand report that from the records also it was seen that the deduction under section 80I of the Act was allowed to the assessee in assessment year 1991-92, copy of the assessment order dated 28.03.1994 passed by the then JCIT, Special Range-4, Pune relating to....
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.... issue restored to the file of Assessing Officer for fresh adjudication by the Tribunal is barred by limitation of time and any such order passed at this point of time shall make the order as null and void ab initio, there is no stand in passing the order for adjudicating the issue restored to the file of Assessing Officer at this juncture. 12. The above proceedings referred to by us are in relation to assessment year 1995-96. However, one link in this regard has to be seen that originally the assessee had claimed the deduction under section 80I of the Act and in some of the years, the assessment was completed under section 143(3) of the Act and the claim of assessee was allowed. However, in assessment year 1995-96, for the first time, the Assessing Officer raised objections and denied the said claim made under section 80I of the Act. The assessee came in appeal before the Tribunal which decided the issue in ITA No.1290/PN/2000, relating to assessment year 1995-96 vide order dated 03.12.2007. From the perusal of the said order passed by the Tribunal which is placed at pages 238 to 243 of the Paper Book it appears that the assessee was held to be eligible for the claim of deduction....
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....y had to give appeal effect within one year from the end of financial year in which the appellate order was passed by the Tribunal i.e. on 03.12.2007. However, till date no appeal effect has been given by the Assessing Officer. During the course of hearing before the Tribunal, the Assessing Officer was directed to give appeal effect, which admittedly, he did by giving appeal effect to the directions of CIT(A) and the Tribunal on other issue. However, he admits that the issue set aside i.e. the year of first operations cannot be adjudicated since the time limit for adjudicating the same has expired. The Assessing Officer further admits that the assessee has for the first time claimed the deduction under section 80I of the Act in assessment year 1991-92. 13. Before the Tribunal in the appeal relating to assessment year 1995-96, there was an issue as to whether the claim under section 80I of the Act is to be allowed from assessment year 1991-92 or 1992-93. The learned Authorized Representative for the assessee fairly admitted before us that the first year of claim of deduction in respect of new unit was assessment year 1991-92. He further stressed that the assessee was running old un....
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....n No.1479/2011, vide judgment dated 29.09.2011. The Hon'ble High Court held that once the benefit of deduction was extended in respect of provision for particular number of year, then unless the benefit is withdrawn in the first year, it cannot be withdrawn for the subsequent years, particularly when there is no change in the facts. The Hon'ble High Court was referring to the benefit available under section 10A of the Act. 16. The said decision has been referred to by the Pune Bench of Tribunal in ITO Vs. Shri Vasudeo Ramdas Mahajan (supra), wherein the benefit of deduction under section 10A of the Act was denied to the assessee in the seventh year, after allowing the same for six years. The Tribunal in turn, following the ratio laid down by the Hon'ble Bombay High Court in the case of CIT Vs. Western Outdoor Interactive Pvt. Ltd., (2012) 349 ITR 309 (Bom) had held that unless the deduction allowed in the first assessment year is withdrawn, the same could not be denied in the subsequent years. The Hon'ble Bombay High Court in the said decision had referred to the earlier decisions of said Court in CIT Vs. Paul Brothers (supra) and also to M/s. Direct Information Pvt. Ltd. Vs. ITO....