2022 (6) TMI 349

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....es to be deleted. 02The appellant craves to add, amend, modify or alter the above grounds of appeal at any stage of appellate proceedings. 03The appellant humbly prays that the appeal be allowed in toto" 2.The assessee vide letter dated 18.09.2012 raised the additional grounds of appeal as follows: "1. On appreciation of the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the action of the learned assessing officer in re-opening the assessment by issuing notice under section 148 of the Act without recording any justifiable reason to believe that income has escaped assessment. 2. Alternatively and without prejudice to the above, on appreciation of the facts and circumstances of the case and law, the Learned Commissioner of Income Tax (Appeals) has erred in confirming the addition by way of disallowance of deduction U/s.80IB made by the learned assessing officer in the assessment order framed U/s.143(3) r.w.s 147 of the Act on the basis of some other grounds, which does not form part of the reasons recorded for re-opening the assessment." 3.At the outset, Learned Counsel su....

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....herefore, in the light of ratio laid down by the Hon'ble Supreme Court in the case of National Thermal Power Company Ltd., vs. CIT (1998) 229 ITR 382 (SC), we admit the additional grounds raised by the assessee. 7.Now, first we shall adjudicate the additional grounds raised by the assessee. As we have noted in earlier para that assessee has challenged the validity of re-opening of assessment u/s 147 of the Act, therefore, first of all, we should examine the reasons recorded by the assessing officer to know whether these reasons are recorded as per the scheme of the provisions of section 147 of the Act? The reasons of reopening of assessment as recorded by Assessing Officer are reproduced below: "Name: Shri Ashutosh Chandrakant Patel PAN:AGMPP3734C Assessment Year: 2007-08 During the course of assessment proceedings in A.Y 2005-06 and A.Y. 2006-07, it was observed that the assessee is not fulfilling the basic conditions for claiming the deduction u/s 80IB. therefore, the claim of deduction u/s 80IB was disallowed. In the year under consideration assessee has also claimed the deduction u/s 80IB. This is a recurring issue and not entitle for ....

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....o point out those basic conditions, which were not fulfilled by assessee, for claiming deduction u/s 80IB of the Act for assessment year 2007-08. Therefore, reasons are bad in law. (ii) The reasons should be recorded on standalone basis: As per Income Tax Act, 1961, the right income should be taxed in the right assessment year. In the reasons recorded, the assessing officer took the assistance of assessment year 2005-06 and assessment year 2006-07, to assessee the income of the assessee for assessment year 2007-08, which is not permitted under the Act. Therefore, these reasons recorded by the assessing officer is not on standalone basis, for assessment year 2007-08. (iii).Non-application of mind by assessing officer: The assessing officer has mentioned in the reasons recorded ( only relevant portion of reasons recorded is reproduced) that: "In the year under consideration assessee has also claimed the deduction u/s 80IB. This is a recurring issue and not entitle for claiming the deduction u/s 80IB." From the above it is clear that assessing officer did not mention in his reasons recorded that how and why the assessee is not entitled to claim dedu....

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....The reopening of the assessment after the lapse of many years is a serious matter. The Act, no doubt, contemplates the reopening of the assessment if grounds exist for believing that income of the assessee has escaped assessment. The underlying reason for that is that instances of concealed income or other income escaping assessment in a large number of cases come to the notice of the income-tax authorities after the assessment has been completed." 11.The purpose behind the relevant provisions imposing condition precedent for initiating reassessment proceedings is to ensure finality of proceedings. The Act also provides that such reason must be recorded in writing before issue of notice of reassessment so as to judge the existence of such belief before initiating reassessment proceedings by issue of notice u/s.148 of the Act. The above requirements are meant to ensure that powers to initiate reassessment proceedings are not exercised in an arbitrary manner. The Courts have analysed and explained in several cases as to what could be the valid reason to believe escapement of income, which would enable the Assessing Officer to successfully reopen the assessment. It has been held th....