2015 (9) TMI 231 - HC - Income Tax

Reopening of assessment - whether the Tribunal erred in holding that the issue of notice u/s 148 was bad in law as the proceedings initiated were merely on the change of opinion? - whether the facts that the issue of completion of project was never before the Assessing Officer in the course of proceedings u/s 143(3) and the Assessing Officer, in the original assessment order u/s 143(3) had not formed any opinion about the completion of the project? - Held that - The impugned order of the Tribunal records the fact that the assessment orders passed in regular assessment proceedings in the subject assessment years has held that conditions laid down in Section 80IB(10) of the Act had been fulfilled by the respondent-assessee. This itself presupposes that the order of assessment passed in the two subject assessment years had applied its mind to the eligibility of the respondent-assessee to the benefit of deduction under Section 80IB(10) of the Act. The impugned order of the Tribunal cannot be found fault with. Moreover, the impugned order merely records a finding of fact which is evident from the order of the Assessing Officer passed in regular assessment proceedings for the two subject years. This finding of fact is not shown to be perverse or arbitrary. Thus the question as formulated does not give rise to any substantial question of law. - Decided against revenue.

Summary

Issues:
Challenging common order of Income Tax Appellate Tribunal for Assessment Years 2004-05 and 2005-06 regarding reopening of assessment based on change of opinion.

Analysis:
The revenue appealed against the Tribunal's order challenging the reopening of assessments for the years 2004-05 and 2005-06. The main question raised was whether the Tribunal erred in holding the notice u/s 148 as bad in law due to a change of opinion without considering the completion of the project issue not being part of the original assessment under Section 143(3). The Tribunal found the reopening notices to be invalid as they were based on a change of opinion. The Assessing Officer had already verified the respondent's claim for deduction under Section 80IB(10) during the initial assessment and found it to be compliant with the conditions. The revenue contended that the absence of a completion certificate for one building in the project justified the reopening, but the Tribunal upheld its decision based on the facts considered during the original assessment.

The Tribunal's order highlighted that the Assessing Officer had thoroughly examined and approved the respondent's eligibility for the deduction under Section 80IB(10) during the initial assessment years. This indicated that the issue of project completion was already considered and did not warrant a reopening based on a change of opinion. The revenue's argument regarding the missing completion certificate was dismissed as the original assessment had already confirmed the respondent's compliance with the statutory conditions for the deduction. The Tribunal's decision was deemed factual and not arbitrary, leading to the dismissal of the revenue's appeals.

Therefore, the High Court upheld the Tribunal's order, emphasizing that the original assessment had adequately addressed the eligibility of the respondent for the deduction under Section 80IB(10). The Court found no substantial legal question arising from the revenue's contentions and dismissed the appeals, concluding that the Tribunal's decision was based on factual findings from the initial assessment and did not warrant interference.