2013 (10) TMI 148 - HC - Income Tax

Re-opening of assessment u/s 147 of the Income tax Act Held that - Relying upon the judgment in the case of Sadbhav Engineering Ltd. 2010 (7) TMI 521 - Gujarat High Court , it has been held that such reopening of the assessment under Section 148 of the Income Tax Act beyond the period of four years from the end of relevant assessment year only on the ground that explanation given below sub-section (13) of Section 80-IA of the Act substituted by the Finance (No. 2) Act, 2009 with retrospective effect i.e., from 1st April 2000 would not be admissible Decided against the Revenue.

Summary

Issues:
Challenge to order of Income Tax Appellate Tribunal on reopening of assessment proceedings under Section 147 of the Income-tax Act, 1961.

Analysis:
The case involved a Tax Appeal challenging the order of the Income Tax Appellate Tribunal, Rajkot Bench, regarding the reopening of assessment proceedings under Section 147 of the Income-tax Act, 1961. The substantial question of law proposed for consideration was whether the Tribunal was right in confirming the order of the CIT(A) in quashing the re-opening of assessment proceedings u/s.147 of the Income tax Act, 1961. The assessee had initially filed the return for A.Y 2003-04, which was accepted by the Assessing Officer under Section 143(3), exempting income declared under Section 80IA. However, in reopening proceedings initiated under Section 147, the Assessing Officer disallowed a deduction claimed by the assessee under Section 80IA(4) of the Act.

Upon approaching the CIT [A], the assessment was quashed based on a decision of the Court in a similar case. The Tribunal concurred with the CIT [A]'s findings, noting that the assessment had been reopened due to a retrospective amendment of Section 80IA(4) beyond the permissible four-year period. The Tribunal referenced a previous decision which held that reopening an assessment beyond four years solely due to a retrospective amendment would not be admissible under the Income Tax Act.

Both the CIT [A] and the Tribunal correctly applied the law to the facts of the case and ruled in favor of the assessee. The Court found no reason to interfere with their decision, leading to the dismissal of the Tax Appeal. The judgment emphasized the importance of adhering to legal provisions and precedent in determining the validity of reopening assessment proceedings under the Income-tax Act, 1961.