2010 (9) TMI 1100 - AT - Income Tax

Summary

Issues involved: Main issue is eligibility to claim deduction u/s. 35(2AB) of the Income Tax Act, 1961. Additionally, correctness of quashing the reopening proceedings for A.Y. 2002-03 and 2004-05 is challenged by the revenue.

The appeals were filed by the revenue challenging the eligibility to claim deduction u/s. 35(2AB) of the Income Tax Act, 1961. The Assessing Officer reopened the assessments for A.Y. 2005-06, taking a different stand from earlier years, which led to the appeal before the learned CIT(A) and subsequently before the ITAT. The ITAT, in its detailed order, held that the assessee is eligible to claim the deduction u/s. 35(2AB) based on the facts presented. The learned counsel for the assessee strongly supported the orders passed by the learned CIT(A) and emphasized that no case was made out by the Revenue even for the earlier years.

For A.Y. 2001-02 & 2003-04, the assessee challenged the reopening of assessments, but the learned CIT(A) upheld the action of the Assessing Officer, stating that in the absence of scrutiny assessment, it cannot be considered a change of opinion. However, for A.Y. 2002-03 & 2004-05, the learned CIT(A) accepted the plea of the assessee, noting that the Assessing Officer had thoroughly analyzed the issue, and therefore, the issuance of notice u/s. 148 of the Act was deemed invalid due to a change of opinion, leading to the quashing of proceedings u/s. 143(3) read with section 147.

The issue was acknowledged by the Learned DR to be in favor of the assessee based on the decision of ITAT. After careful consideration of the submissions and in line with the decision in the assessee's own case for A.Y. 2005-06, the ITAT upheld the orders passed by the learned CIT(A) and dismissed the appeals filed by the revenue.

The judgment was pronounced on September 24th, 2010, upholding the eligibility of the assessee to claim deduction u/s. 35(2AB) and dismissing the revenue's appeals.