TaxTMI 
TaxTMI 
2022 (7) TMI 1454
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....e 226 of the Constitution of India challenging the impugned notice dated 31.03.2018 issued under section 148 of the Income Tax Act, 1961 (For short "the Act") proposing to reopen the assessment for the Assessment Year 2011-2012. 5. Brief facts of the case are that the petitioner is a company incorporated under the Companies Act, 1956 and is engaged in the activity of pollution control and environmental engineering and consulting. The petitioner, during the year under consideration i.e. Assessment Year 2011-2012, was also running and maintaining Bio-Medical Waste treatment plant at Surat, Udaipur and Ranchi. It is the case of the petitioner that separate books of accounts were maintained for the activities related to Bio-Medical Waste treatment plant projects and income arising from such projects was claimed as deduction under section 80-IA of the Act. 5.1) The petitioner filed the original return of income for the year under consideration on 29.09.2011. The petitioner later on filed revised return of income on 16.09.2012 declaring total income at Rs. 3,54,830/- after claiming of deduction of Rs. 1,39,88,951/- under section 80-IA of the Act. It is the case of the petitioner th....
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.....951- u/ s. 80IA of the Act and shown Book Profit of Rs. 1.55.29.800/- u/s. 115JB of the Act. The case was selected for scrutiny and order u/s. 143(3) of the Act was completed on 28.02.2014 by determining total Income at Rs. 5.39.000/&accepting Book Profit u/s 115JB of the Act at Rs. 1.55.29,800/- The assessee company had paid tax u/. 11518 of the Act. During the year, the assessee was engaged in business of Pollution Control & Environmental Engineers & Consultants business. 2. The case records of the assessee have been perused. On perusal of scrutiny of P&L account, Balance Sheet, Computation of income, it is revealed that assessee had claimed the deduction of Rs. 1.39,88.951/ u/s. 801A (100% exemption from tax) of the Act on profit earned from Bio-Medical Waste (BMW) Projects. Further. It is noticed that while calculating the profit BMW project, some of the common expenses were not bifurcated between the main unit and BMW projects. As there is no provision in the Income Tax Act for apportionment of common and indirect expenses between exempt (BMW) and non-exempted unit (main unit), the common expenses were required to be apportioned on the basis of turnover/sales being l....
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.... of exempted unit and also escaped the assessment. In view of above facts/material available on records and after analyzing the same, I have reason to believe that income of the assessee to the extent of Rs. 61,30,049/- has escaped assessment for A.Y. 2011-12 within the meaning of section 147 of the I.T. Act. 4. In this case a return of income was filed for the year under consideration and regular assessment w/s.143(3) was made on 27.02.2014. Since, 4 years from the end of the relevant year has expired in this case, the requirement to initiate proceedings u/s. 147 are reason to believe that Income for the year under consideration has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the assessment year under consideration. It is pertinent to mention here that reasons to belleve that income has escaped assessment for the year under consideration have been recorded above (refer paragraphs 2 to 3 above). In this case more than four years have lapsed from the end of assessment year under consideration. Hence necessary sanction to issue notice u/s 148 has been obtai....
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....pen for the Department to reopen the case. It was submitted that the petitioner's total income was Rs. 3,54,830/- whereas the book-profit in terms of provisions of section 115JB of the Act was Rs. 1,55,29,800/- and the applicable rate of MAT on such book-profit was 18% during the year under consideration. Accordingly, MAT liability of the petitioner was higher than tax liability under the normal provisions and hence, the petitioner was governed by the provisions of section 115JB of the Act. It was submitted that even if the entire addition proposed by the respondent (i.e. Rs. 61,30,049/-) is made to the total income of the petitioner, then also the tax liability on the same would still be less than the MAT liability i.e. the petitioner would still be governed by the provisions of section 115JB of the Act. It was submitted that since the petitioner has already paid much higher tax under the provisions of section 115JB of the Act, there would be no addition to the tax liability of the petitioner even if the addition proposed by the respondent is made. Thus, there is no escapement of income chargeable to tax. It was submitted that since the condition precedent for resorting to reasses....
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....t. It was submitted that the petitioner has not disclosed full and true facts and has not factored the MAT credit recalculation and therefore, the contention of the petitioner that there would be no effect on the taxability is devoid of facts and misreporting of facts by the petitioner. It was therefore, submitted that reopening the assessment was justified. 8. Considering the submissions made by learned advocates for both the sides, it is not in dispute that the assessment for the year under consideration i.e., Assessment Year 2011-2012 which is sought to be reopened by the impugned notice dated 31.03.2018 is clearly beyond a period of four years from the end of relevant assessment year. On perusal of the reasons recorded for reopening the assessment, it nowhere reveals that the assessee has failed to disclose truly and fully all material facts relevant for the assessment. 9. The petitioner assessee availed the deduction under section 80IA of the Act. On the basis of the audit report in Form 10CCB, the reasons assigned by the Assessing Officer to reopen the assessment questioning the apportionment of common expenses between exempted unit and non-exempted unit on the basis of....