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2017 (7) TMI 775 - HC - Income TaxReopening of assessment - eligibility to benefit of deduction under Section 80IA - Held that - Learned Standing counsel could not dispute that when benefit of deduction under Section 80IA was allowed by A.O., he had examined relevant material and even on a query made by him, reply was submitted by Assessee and after scrutiny, assessment order was finalized. However, at the time of making assessment for A.Y. 2009-10, A.O. took a different view and disallowed the deduction but even that order stood nullified in appeals into this Court. Hence, it is not a case of any concealment of material or non disclosure of material on the part of Assessee. No new material has come and only a different view was taken by A.O. in respect of subsequent Assessment Year which has been taken a basis for reopening of assessments already made final after scrutiny, by A.O. This cannot be said to be a valid exercise of powers under Section 147/148 and in our view, Tribunal has rightly confirmed the view taken by CIT(Appeals)-III against Revenue.
Issues involved:
Validity of re-assessment proceedings based on a different view for a subsequent assessment year - Whether a valid exercise of powers or a impermissible review? Analysis: The judgment by the Allahabad High Court involved two appeals under Section 260-A of the Income Tax Act, 1961, arising from a decision by the Income Tax Appellate Tribunal. The appeals were filed by the Assistant Commissioner of Income Tax against the Assessee, M/s Jai Prakash Associates Ltd., for the Assessment Years 2007-08 and 2008-09. The Tribunal had dismissed both appeals, leading to the matter being brought before the High Court. For the Assessment Year 2007-08, the Assessee had initially filed a return of income claiming a deduction under Section 80IA of the Act. The Assessing Officer assessed the total income at a certain amount. Similarly, for the Assessment Year 2008-09, the Assessee filed a return with a deduction under Section 80IA, which was allowed by the Assessing Officer. However, for the subsequent Assessment Year 2009-10, the deduction was disallowed for the first time. Subsequently, the Assessing Officer issued notices under Section 148 of the Act for the earlier years, seeking to re-assess the income by disallowing the deductions claimed under Section 80IA. The re-assessment orders were challenged before the Commissioner of Income Tax (Appeals)-III, who allowed the appeals, stating that there was no ground for reopening the assessments. The Revenue then filed appeals before the Tribunal, which were dismissed. The High Court, in its judgment, emphasized that the re-assessment proceedings based on a different view taken for a subsequent assessment year could not be considered a valid exercise of powers under Section 147/148. The Court noted that there was no concealment of material or non-disclosure by the Assessee, and the Assessing Officer had merely taken a different view without any new material. Therefore, the Court upheld the Tribunal's decision and dismissed both appeals in favor of the Assessee. In conclusion, the High Court ruled against the Revenue, stating that the re-assessment proceedings initiated by the Assessing Officer were not valid exercises of power but rather impermissible reviews of finalized assessments. The Court found no justification to deviate from the Tribunal's decision and upheld the view taken by the Commissioner of Income Tax (Appeals)-III, ultimately dismissing both appeals.
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