TaxTMI 
TaxTMI 
2021 (2) TMI 354
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.... been passed after considering the same, without appreciating the fact that there were reasons to believe as recorded by the Assessing Officer that income had escaped assessment. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the notice u/s 148 dated 18.02.2014 is without jurisdiction and further erred in quashing the notice u/s 148 & the order u/s 143(3) read with section 147 dated 31.03.2015. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the issue as to whether the assessee is entitled to deduction u/s 80-IB(10) on the expenses which have been disallowed due to non compliance of certain provisions of the Income Tax Act, 1961 was never examined by the Assessing Officer in the course of the original assessment proceedings. 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) failed to appreciate that the fact of income having escaped assessment due to failure on the part of the assessee to disclose fully and truly all material facts relevant to its assessment is required to be established only in a case where the as....
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....s contribution to PF, Rs. 62, 6877- on account of disallowance U/S.43B and Rs. 2,60,767/- on account of donation. The deduction u/s.80IB has been claimed on Gross Total Income ofRs. 22,03, 15,987/-. It is seen that the profit as per P & L a/c. of Rs. 21.59 crores is inclusive of income accounted for as other income of Rs. 23, 50, 1 15/-. Section 80IB clearly stipulates that an undertaking developing and building housing projects approved before 31.03.01 by the local authority shall be entitled to avail 100% deduction of the profits derived from such housing projects. The net profit of 2009-10 is inclusive of other income of Rs. 23,50, 1 15/- viz. income not related to the building of housing projects. This income is not eligible for any such deduction u/s.80IB and should be taxed in the hands of the assessee under the normal provisions of the I.T. Act, 1961. Failure to do so has resulted in escapement of income to that extent. Further, it is observed that the assessee has claimed deduction u/s.80IB the extent of Rs. 22,03,15,987/-. Net profit from business activity is only Rs. 21,59,65,444/- and the same has been increased to a Gross Total Income of Rs. 22,03,15,9....
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....s is discernible from the aforesaid reasons, the case of the assessee was reopened for two fold reasons, viz (i) that the assessee‟s claim for deduction u/s 80IB(10) in respect of the "Other incomes" of Rs. 23,50,115/- was not as per the mandate of law; and (ii) that the assessee‟s claim for deduction u/s 80IB(10) w.r.t the disallowances made in its computation of income i.e u/s 40(a):Rs. 72,733/-; u/s 40(a)(ia) : Rs. 38,62,220/-; employees contribution to PF :Rs. 1,19,937/-; u/s 43B: Rs. 62,687/-; and donations: Rs. 2,60,767/- was not maintainable. 5. In the backdrop of the aforesaid facts, the A.O called upon the assesse to put forth an explanation as to why its claim for deduction u/s 80IB(10) may not be restricted to an amount of Rs. 21,59,65,444/-. In reply, the assesee tried to impress upon the A.O that its claim for deduction u/s 80IB(10) was in order and the same after thorough vetting and deliberations was accepted by his predecessor while framing the original assessment u/s 143(3), dated 27/12/2011. However, the reply of the assessee did not find favour with the A.O, who backed by his aforesaid conviction restricted the assessee‟s entitlement for dedu....
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....owance u/s.40(a)ia), and Rs. 1,19,937/- on a/c. of employees contribution to PF Rs. 62,687/- on account of disallowance u/s.43B and Rs. 2,60,767/- on account of donation. These disallowances do not fall in the category of eligible profits derived from the business activity of construction of buildings, hence, these do not qualify for deduction u/s. 80IB of the I. T. Act, 1961. 5.4.3 In this regard, I find that the appellant had made its submission regarding the other income amounting to Rs. 23,50,115/- and the reasons for which the above said income was eligible for deduction u/s.80IB(10) vide letter dated 26.12.2011 before the A.O. Similarly, the appellant had made detailed submission on the issue of treating the additions of expenses disallowed in the computation of income of Rs. 43,78,344/- as addition to its business income on which deduction u/s.80IB would be allowable vide letter dated 20.12.2011 before the A.O. in the first assessment proceedings. The A.O., after considering the submissions made, has allowed deduction u/s.80IB of Rs. 22,03, 15,9877- as claimed by the appellant in its return of income. 5.4.4 From the reasons recorded, I find that the view ta....
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....s ACIT, ITA No.2910/Mum/2013 (Mumbai IT AT) it was held that if there was no 'new tangible material' then there would be no 'reason to believe' and further that the condition with respect to availability of 'new tangible material' is step anterior to the condition of 'no change of opinion' or 'review'. 5.5 In view of the above discussion, I am of the considered opinion that the reason to believe recorded by the A.O. is merely on account of change of opinion since the case has been reopened on the very same facts which have been viewed during the original assessment proceedings and the assessment order has been passed after considering the same. The A.O. has failed to assume jurisdiction u/s.147 of the Act. Accordingly, it is held that the notice dated 18.02.2014 issued u/s, 148 of the Act is without jurisdiction and the said notice as well as the assessment order u/s.143(3) r.w.s. 147 of the Act, 1961 dated 31.03.2015 are quashed." On a perusal of the aforesaid observations of the CIT(A), it can safely be gathered that the reassessment was quashed by him, for the reason, that the reopening of the concluded assessment of the assess....
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....the said amounts were eligible for deduction u/s 80IB(10) of the Act. The relevant extract of the aforesaid reply of the assessee is reproduced as under:- "4. The other income for the Financial Year 2008-09 includes the following: Particulars Amount (Rs.) Amount (Rs.) a) Bank Charges 88,600 b) Expenses recoverable for recovering dues 2,73,860 c) Cancellation Charges 12,43,588 16,06,048 d) Unclaimed Balances and Provisions no longer required written back 7,44,067 Total 23,50,115 4.1 The above income is eligible for deduction under section 80IB(10) for the reasons mentioned below: a) Bank Charges (Income): Rs. 88,600/- During the financial year 2008-09, the assessee firm has debited cheque returned to the flat customers due to lack of fund in their bank account or any other reason. Hence it is well justified that this income is reimbursement of bank charges. b) Expenses recoverable for recovering dues : Rs. 2,73,860 The amount is recovery of charges incurred by the company for recovering dues from customers. The customer....
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....o reopen the case. The Hon‟ble Apex Court while dismissing the appeal of the revenue had held as under: "4. On going through the changes, quoted above, made to s. 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, reopening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the AO to make a back assessment, but in s. 147 of the Act (w.e.f. 1st April, 1989), they are given a go by and only one condition has remained, viz., that where the AO has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post 1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, s. 147 would give arbitrary powers to the AO to reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The AO has no power to review; he has the power to reassess. But reassessment has to be based on fulfillment ....