TaxTMI 
TaxTMI 
TaxTMI 
2022 (10) TMI 458
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....on 22.9.2010 admitting a loss of Rs.9,93,73,748/- under the normal provisions and book loss of Rs.4,27,57,236/- u/s 115JB of the I.T. Act, 1961. The original assessment u/s 143(3) was completed on 28.03.2013 determining the total loss at (-) Rs.6,12,69,693/- after allowing deduction u/s 10B of Rs.12,91,80,370/-. Subsequently, the Assessing Officer reopened the assessment by recording the following reasons. "The assessee-company is engaged in the business of manufacturing of chemicals & intermediaries. The assessee filed return of income for the Asst. Year 2010-11 on 22/09/2010 admitting a loss of Rs.9,93,73,748/- under normal provisions and book profit of Rs.4,27,57,236/- u/s 115JB. This case Was selected for scrutiny under CASS and the scrutiny assessment was completed u/s 143(3) on 28/03/2013. During the scrutiny proceedings. the assessee had claimed that it had maintained separate set of books of accounts for its two units, i.e. DTA (Domestic Tariff Area) unit & EOU (Export Oriented Unit) unit and incomes were also offered separately. In the return of income, the assessee had claimed deduction u/s 10B of Rs. 4,22,76.832/- in respect of EOU unit. However, in the Scrutiny assess....
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....only for the remaining period of ten consecutive assessment years beginning with the assessment year relevant to the previous year in which the undertaking begins to manufacture or produce articles on things or computer software, as a DTA unit. Since the assessee has started manufacturing operations from DTA unit in Asst. Year 1994-95, it had the benefit of claiming deduction u/s 10B only upto Asst. Year 2003-04. The assessee has got approval for existing DTA unit into an EOU unit in December, 2005 and as stated above, it is not entitled to exemption u/s 10B for Asst. Year 2010-11. During the scrutiny proceedings, the assessee has submitted vide letter dated 28/03/2013 that it had established new EOU unit by constructing building and purchasing new plant & machinery and claimed deduction u/s 1OB. However, as per the Development Commissioner, Visakhapatnam Special Economic Zone approval letter No.Per: 327/E()U/VSEZ/2005, dated 09/12/2005, the approval is granted for the existing DTA Unit and not the newly constructed EOU unit. Therefore. the claim of assessee is totally incorrect and an income of Rs.12,91.80,370/- has escaped tax." 3. Accordingly, notices u/s 148 of the I.T. Act ....
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....ase, the original assessment order u/s.143(3) was passed on 28.03.2013 by allowing the deduction u/s. 10B. Later on the case was reopened u/s.147 and the assessment u/s.143(3) r.w.s. 147 was completed on 29.12.2017 by disallowing the deduction u/s. 10B. It is clear from Section 149(1)(b) that : "if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year." The proceedings initiating u/s. 147 by the Assessing Officer is justified, as it fulfils time limit U/s. 149(1)(b). Therefore, the submissions of the appellant is not accepted. These grounds are not sustainable, hence dismissed". 7. So far as the merits of the case is concerned, the learned CIT (A) allowed the claim of deduction u/s 10B of the I.T. Act by observing as under: "5.3.3 As submitted by the appellant, the completed unit has come into commencement from 26.02.2007 i.e., AY 2007-08, but the deduction u/s. 10B claimed rom AY 2008-09 onwards. Further, the appellant explained that the deduction u/s. 10B was accepted by the Assessing Office....
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.... to appreciate that the assessment was reopened in respect of an assessment concluded under section 143(3) of the Act in respect which four (4) years has elapsed from the end of the relevant asst year and without recording in the reasons that the "reopening of assessment is on account of reasons attributable to the Appellant as envisaged in proviso to section 147 of the Act 3) The authorities below failed to appreciate that this being a case where the deduction u/s 10B of the Act was allowed to the Appellant commencing for AY 2008-09 and for every subsequent asst year after detailed scrutiny under section 143(3) of the Act. including the present asst year, there cannot be a presumption that the alleged reasons for escapement is on account of the reason attributable to the Appellant. 4) On the facts and in the circumstances of the case, the reassessment order Is bad in law and unsustainable as the authorities below failed to provide the tangible material which has come to his possession subsequent to the scrutiny assessment being made. The authorities below ought to have appreciated that the letter dated 29/05/2017 issued by Development Commissioner, SEZ, Visakhapatnam cannot be....
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...., the order of the learned CIT (A) on merit being not in accordance with law should be reversed and that of the Assessing Officer be restored. 11.1 So far as the grounds challenging the validity of the reassessment proceedings are concerned, he submitted that the learned CIT (A) has given justifiable reasons while upholding the validity of such re-assessment proceedings. He accordingly relied on the same. 12. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the assessee in the instant case filed the original return of income on 22.09.2010 declaring loss of Rs.9,93,73,748/- under the normal provisions and book loss of Rs.4,27,57,236/- u/s 115JB of the I.T. Act. We find the original assessment was completed u/s 143(3) dated 28.3.2013 determining the total loss of Rs. Rs.6,12,69,693/- after allowing deduction u/s 10B of Rs.12,91,80,370/-. We find the Assessing Officer reopened the assessment by recording the reasons u/s 147 of the I.T. Act on the ground that the assessee had claimed dedu....
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....ount of such false and inaccurate particulars. On a pointed query raised by the Bench, the learned Counsel for the assessee submitted that he has no control over the reasons given by the learned CIT (A) while allowing the deduction especially when the assessee has filed all requisite details before the Assessing Officer as well as before the learned CIT (A). We find neither the learned CIT (A) has addressed the various issues raised by the assessee challenging the validity of the re-assessment proceedings nor the CIT (A) has addressed the issues raised by the Assessing Officer while denying the claim of deduction u/s 10B of the I.T. Act. Considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the learned CIT (A) with a direction to adjudicate the issue of validity of re-assessment proceedings as well as the claim of deduction u/s 10B of the I.T. Act by passing a speaking order giving pointwise reasonings on both the issues. Needless to say the learned CIT (A) shall decide the issue as per fact and law after giving due opportunity of being heard to the assessee. We hold and direct accordingly. The ground....