TaxTMI 
TaxTMI 
2021 (6) TMI 929
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....fying that: a. That Uttarakhand Purv Sainik Kalyan Nigam Limited was established by Government of Uttarakhand for welfare and economic upliftment of ex-serviceman and having duly satisfied the prescribed conditions of section10(26BBB) of the Income Tax Act, 1961. b. The main objects of the Uttarakhand PurvSainik Kalyan Nigam Limited were to provide employment, financial assistance, loans, subsidy/grants, to impart training for entrepreneurship to the ex-serviceman and their dependents and having duly satisfied the conditions prescribed in the section 10(26BBB) of the Income Tax Act, 1961. 3. That, as all the conditions prescribed in section 10(26bbb) of the Income Tax Act,1961 were satisfied, the Ld.CIT(A) and Ld. Assessing Officer erred in holding that Assessee is not eligible for exempting the income of Rs. 5,38,77,984/- for the Assessment Year 2009-10 in terms of the said Section. 4. That in the facts and circumstances of the case, the order U/s 143(3)/147 dated25/02/2015 is merely change in opinion'. The order u/s 143(3) passed by the Ld. AO dated 28.12.2011 does not in any way represent erroneous order. The action of the Ld. Assessing Officer for re-opening the c....
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....e submitted that the issue of exemption u/s 10(26BBB) of the Act was examined in great detail by the assessing officer at the time of the original assessment u/s 143(3) of the Act wherein partial disallowance of exemption was made and as such the notice u/s 148 was purely on the basis of change of opinion. The Ld. Counsel drew our attention to assessment order u/s 143(3) dated 28/12/2011, notices issued and replies filed during original assessment proceedings as placed at Pages 52-84 of the paper book to show that the subject matter of original assessment proceedings was the very same issue of exemption u/s 10(26BBB). It was further submitted that the notice u/s 148 has been issued after expiry of four years and that in absence of any failure on the part of the assessee in disclosing true and full particulars, the notice is barred by limitation in terms of proviso to section 147 of the Income tax Act, 1961. It was submitted that once the issue of exemption u/s 10(26BBB) has been examined in the course of original assessment, the assessing officer loses his jurisdiction to reopen the proceedings on the very same issue without any fresh tangible material. 4.0 The Ld. DR, on the othe....
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....e and full particulars become relevant in deciding the expiry date of action u/s 147 of the Act. It means that where there is no failure on part of the assessee, the limitation for issue of notice u/s 148 expires on four years from the end of the assessment year. 5.2 The law laid down in Kelvinator India (Supra) has been succinctly explained by Hon'ble Delhi High Court in the case of Sun Pharmaceutical Industries Ltd. v. DCIT [2016] 381 ITR 387 (Delhi) wherein it was held that once there is full disclosure of facts and in absence of tangible material, no action can be taken u/s 147 of the Act. 5.3 On the touchstone of principle laid down by the Hon'ble Supreme Court, we will now analyse the facts of the present case. On perusal of reasons recorded for issue of notice, it is noted that the basis for assuming jurisdiction u/s 147 is claim of exemption u/s 10(26BBB) of the Income Tax Act, 1961. Now, when we examine the original assessment proceedings u/s 143(3), it is found that the issue of exemption u/s 10(26BBB) has been extensively dealt with and the assessment was ultimately completed after making proportionate disallowance of claim of exemption. Next, we turn to order-sheet o....
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....l requirements as per law. 5.6 In reaching the above conclusion, we find strength from the decision of Hon'ble Uttarakhand High Court in the case of Oil and Natural Gas Corp. Ltd. v. DCIT [2003] 262 ITR 648. In the said decision, the assessing officer considered 10% disallowance of interest expenses in the original assessment proceedings u/s 143(3) and notice u/s 148 was issued for the purpose of making further disallowance of interest expense. The Hon'ble High Court quashed the re-assessment proceedings by observing as under: "8. At the outset it needs to be mentioned that in the reasons for reopening of assessment which have been reproduced above it has not been alleged that there has been omission or failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessments. The reasons itself, in fact, indicate that the assessee has disclosed fully and truly facts about the borrowings of funds as well as investments made in tax free public sector undertaking bonds. The reason to believe that income has escaped assessment was that the Assessing Officer has, in fact, not given conscious consideration to the aspect that if the assessee had ....