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2012 (9) TMI 1014 - AT - Income TaxReopening of assessment - claim for deduction u/s 80IB - Held that - Assessee furnished all the details relating to its claim for deduction u/s 80IB of the Act and the Assessing Officer thoroughly examined the claim while framing the assessment u/s 143(3) and on being satisfied the claim was allowed. Therefore, in the present case, reopening of the assessment by issuing notice u/s 148 of the Act is definitely a change of opinion which is not maintainable and therefore, the re assessment framed by the Assessing Officer u/s 147 of by issuing notice u/s 148 of the Act after completing the assessment u/s 143(3) of the Act by taking a view which was in consonance with the judgment of the Hon ble jurisdictional High Court was not valid.
Issues Involved:
1. Validity of proceedings initiated under Section 148 of the Income Tax Act. 2. Legality of disallowance of Rs. 3,95,733 under Section 80IB. 3. Validity of interest charged under Sections 234B and 234C. 4. Request for suitable costs and liberty to amend grounds of appeal. Issue-wise Detailed Analysis: 1. Validity of Proceedings Initiated Under Section 148: The assessee challenged the reopening of the original assessment completed under Section 143(3) through notice under Section 148, arguing it was barred by limitation and constituted a change of opinion. The original assessment was completed on 30.03.2005, and the notice under Section 148 was issued on 23.09.2008. The Assessing Officer (AO) recorded reasons for reopening, citing excessive claims under Sections 80HHC and 80IB due to the inclusion of DEPB income, which was against the provisions of Section 80G(5A). The CIT(A) upheld the AO's action, stating it was justified even beyond four years due to the failure of the assessee to disclose fully and truly all material facts necessary for assessment. The CIT(A) relied on various judgments, including the Supreme Court's decision in Liberty India vs. CIT and Sterling Foods, and the CBDT Circular No. 68, supporting rectification based on subsequent interpretations of law by the Supreme Court. The Tribunal, however, found that the AO had thoroughly examined the assessee's claims during the original assessment, including the DEPB income, and had allowed the claims after detailed scrutiny. The Tribunal referred to several judgments, including those of the Hon'ble Bombay High Court and the Hon'ble Rajasthan High Court, which held that reopening based on a change of opinion is not permissible, especially after four years unless there is a failure to disclose fully and truly all material facts. The Tribunal concluded that the reopening was indeed a change of opinion and thus invalid. 2. Legality of Disallowance of Rs. 3,95,733 Under Section 80IB: The AO disallowed Rs. 3,95,733 under Section 80IB, considering the DEPB income not derived from the undertaking's activity. The CIT(A) upheld this disallowance, relying on the Supreme Court's decision in Liberty India vs. CIT, which clarified that DEPB benefits are not derived from the industrial undertaking and thus not eligible for deduction under Section 80IB. The Tribunal, however, did not provide a separate finding on this issue since it had already invalidated the reassessment proceedings under Section 147. 3. Validity of Interest Charged Under Sections 234B and 234C: The assessee contended that the interest charged under Sections 234B and 234C was bad in law and on facts. Since the Tribunal invalidated the reassessment proceedings, it did not address this issue separately. 4. Request for Suitable Costs and Liberty to Amend Grounds of Appeal: The assessee prayed for suitable costs and liberty to add, amend, alter, and modify any grounds of appeal. The Tribunal allowed the appeal, rendering this request moot. Conclusion: The Tribunal allowed the appeal, holding the reassessment proceedings under Section 147 as invalid due to the reopening being based on a change of opinion, which is not permissible. Consequently, no separate findings were given on the disallowance under Section 80IB and the interest charged under Sections 234B and 234C.
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