2016 (10) TMI 360 - HC - Income Tax

Reopening of assessment - claim of deduction under section 80IB(10) disallowed as assessee was not the owner of the land and the permission from AUDA was also not obtained by the assessee - Held that - For multiple reasons on such grounds, the reopening would not be permissible. Firstly, as noted, in the original scrutiny assessment, deduction under section 80IB(10) of the Act was the main claim of the assessee which came up for scrutiny. The Assessing Officer raised several queries, asking the assessee to justify such claim, to which, the assessee gave detailed reply, producing evidence and materials on record. In that view of the matter, it would be extremely doubtful whether the Assessing Officer can later on examine another facet of the same claim, contending that such aspect was not scrutinized during the original assessment. It is not the case of the Assessing Officer that in response to the queries raised during such assessment, the assessee did not make true or proper disclosures. The reasons recorded did not rely on any material outside the record. Quite apart, the very issue on the basis of which, reopening is resorted to is squarely covered by the judgment of this Court in case of Radhe Developers (2011 (12) TMI 248 - GUJARAT HIGH COURT ) which came to be confirmed by the Supreme Court concerning this assessee and its claim of deduction under section 80IB(10) of the Act for the subsequent year. The Tribunal had allowed the assessee s appeal. Before the High Court, Revenue had argued that the case of the assessee did not fall within the facts of Radhe Developers (supra) or Shakti Corporation 2008 (11) TMI 436 - ITAT AHMEDABAD . Such a contention was rejected. Other grounds raised were also not accepted. Thus we find that the reasons recorded by the Assessing Officer for reopening the assessment lack validity. - Decided in favour of assessee

Summary

Issues:
Challenging a notice to reopen assessment for the assessment year 2005-06 based on deduction under section 80IB(10) of the Income Tax Act, 1961.

Analysis:

1. Notice to Reopen Assessment:
The petitioner challenged a notice issued by the Assessing Officer to reopen the assessment for the assessment year 2005-06 based on the deduction claimed under section 80IB(10) of the Income Tax Act, 1961. The original assessment was completed under section 143(3) of the Act, where a part of the deduction claimed was disallowed. The reasons recorded for reopening highlighted discrepancies related to the ownership of land and permission from AUDA, suggesting that the petitioner was not the developer but a contractor. The petitioner objected to the notice, arguing that the issue had already been scrutinized in the original assessment.

2. Legal Arguments:
The petitioner contended that the Assessing Officer, having already examined the deduction claim in the original assessment, cannot reopen the assessment on the same grounds. Reference was made to a previous judgment by the High Court in a similar case where the claim of deduction was upheld. The department, however, argued that the question of whether the petitioner acted as a developer or contractor was not considered during the original assessment, justifying the reopening.

3. Judicial Analysis:
The High Court analyzed the reasons recorded for reopening and found them lacking in validity. It noted that the issue raised for reopening was already covered by a previous judgment of the Court, which was affirmed by the Supreme Court. The Court emphasized that the Assessing Officer cannot reexamine an aspect of the claim that was already scrutinized during the original assessment, especially when the petitioner had provided detailed responses and evidence. The Court also highlighted that the Assessing Officer did not rely on any new material outside the record to justify the reopening.

4. Conclusion:
In light of the above analysis, the High Court quashed the impugned notice to reopen the assessment for the assessment year 2005-06. The Court allowed the petition, emphasizing that the reasons recorded by the Assessing Officer lacked validity. The judgment reaffirmed the principle that an assessment cannot be reopened on the same grounds already examined during the original assessment, especially when supported by previous judicial decisions.