2014 (1) TMI 1633 - AT - Income Tax

Reassessment u/s 147 - assessments were reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 03.03.2008 on the ground that the meat processing plant of the assessee was not liable for deduction u/s 80IB of the Act. - Held that - Even in the assessment order passed u/s 153A of the Act the AO has recorded that the claim of deduction by the assessee has been examined and verified. It is only after this the AO has granted the assessee deduction u/s 80IB of the Act. A perusal of the reason recorded as also the assessment order which is the subject matter of the appeal now shows that nowhere is there anything mentioned by the Revenue to show that the assessee has not disclosed truly and fully all material facts necessary for assessment. - for the purpose of reopening an assessment beyond the period of four years form the relevant assessment year there must be a failure on the part of the assessee to disclose fully and truly all the material facts necessary for assessment. This failure having not been shown the first provisio to section 147 grants protection to the assessee. Further the fact that AO in the Assessment orders passed u/s 153A of the Act has specifically mentioned that he has examined and verified the claim of deductions clearly shows that the reopening is only on the basis of a change of opinion which is also not permissible in such case where the failure on the part of the assessee has not been shown. In the circumstances we are of the view that the finding of ld. CIT(A) is on a right footing and does not call for any interference. Disallowance of employees contribution of PF deducted from the salary before due date - Held that - As it is noticed that the employees contribution to PF has been paid before the due date of filing the return and this fact has not been disputed by the Revenue we are of the view that findings of ld. CIT(A) being in consonance with the decision of the Hon ble Jurisdictional High Court in the case of Vijay Shree Ltd. referred to supra we are of the view that the findings of ld. CIT(A) is on a right footing and does not call for any interference. - Decided against Revenue.

Summary

Issues:
- Appeal against the order of ld. C.I.T.(A)- Central-III, Kolkata for multiple assessment years.
- Dispute over annulment of assessment order due to conditions under Section 147 not being satisfied.
- Disallowance of deduction claimed under section 80IB.
- Validity of reopening assessments beyond the four-year limitation.
- Addition of employees' PF contribution under section 2(24)(x) and section 36(1)(va) of the Act.

Analysis:
1. Annulment of Assessment Order: The issues raised in the appeals pertain to the annulment of assessment orders by the ld. CIT(A) due to alleged non-satisfaction of conditions under Section 147 of the Act. The Revenue contended that the reopening was valid as there was no change of opinion, whereas the assessee argued that the reopening was beyond the limitation period and lacked disclosure of material facts. The Tribunal observed that the original assessments had examined and verified the deduction claimed under section 80IB, and the reopening was based on a change of opinion without any failure to disclose material facts. Consequently, the Tribunal upheld the CIT(A)'s decision to annul the assessment orders.

2. Disallowed Deduction under Section 80IB: The Revenue challenged the disallowance of deduction claimed under section 80IB by the ld. CIT(A). The Tribunal noted that the Revenue failed to demonstrate any non-disclosure of material facts by the assessee, as required under the first proviso to Section 147. Moreover, the assessments had already verified and granted the deduction in question. Therefore, the Tribunal agreed with the CIT(A) that the disallowance was based on a change of opinion, which was impermissible without evidence of non-disclosure. Consequently, the Revenue's appeals were dismissed on this issue.

3. Employees' PF Contribution Disallowance: The appeals also involved the addition of employees' PF contribution under section 2(24)(x) and section 36(1)(va) of the Act. The Revenue contested the deletion of this addition by the ld. CIT(A). The Tribunal, after considering the submissions, found that the employees' PF contribution had been paid before the due date of filing the return, a fact undisputed by the Revenue. Citing relevant case law, the Tribunal upheld the CIT(A)'s decision, stating that the contribution was allowable under section 43B of the Act. Consequently, the appeals on this issue were also dismissed.

In conclusion, the Tribunal dismissed all appeals filed by the Revenue against the orders of the ld. CIT(A) for various assessment years, upholding the annulment of assessment orders, rejecting the disallowance of deduction under section 80IB, and affirming the allowability of employees' PF contribution under section 43B of the Act. The Tribunal's decision was pronounced on January 30, 2014.