2019 (9) TMI 865 - AT - Income Tax

Reopening of assessment u/s 147 - HELD THAT - Reopening the assessment under section 147 of the Act, we note that there was no tangible material gathered by the AO from the outside source. As such, the reopening was initiated on verification of the assessment records. There was no assessment carried out under section 143(3) of the Act for the year under consideration. As such the return was processed under section 143(1) of the Act. Thus it is clear that the return of income filed by the assessee for the year under consideration was not examined by the Revenue. Therefore, the question of change of opinion does not arise in the given facts and circumstances. Besides the above, we also note that the conditions attached in the 1st proviso to section 147 of the Act that there was failure on the part of the assessee to disclose truly and fully the material facts does not apply to it. It is because there was no scrutiny assessment under section 143(3) of the Act for the year under consideration. We are not impressed with the arguments of the learned AR for the assessee and accordingly we do not find any reason to interfere in the finding of the learned CIT (A). Hence, the additional ground of appeal of the assessee is dismissed. Disallowance under section 80JJA - HELD THAT - It is very clear that the purpose behind the provision of section 80JJA of the Act was to extend the benefit to the organisations from the commencement of business. It is beyond doubt that the assessee commenced its business much before the introduction of the provisions of section 80JJA of the Act in the statute. There was no mention under the provisions of section 80JJA of the Act for extending benefit to the assessee which have commenced their business much before the introduction of such provision. Thus, the provision itself vividly reflects the intent of lawmakers that the benefit of section 80JJA shall begin from the commencement of the business. We are also conscious to the fact that the learned AR for the assessee has placed various orders before the authorities below but on perusal of the same, we note that none of them is applicable to the case on hand. We also note that the assessee has also enjoyed the benefit of deduction under section 80 IA of the Act after the commencement of production for a period of 10 years. Accordingly, we do not find any infirmity in the order of the authorities below. Hence the ground of appeal of the assessee is dismissed. Charging tax under section 115JB along with the interest under section 234A and 234B - AO worked the liability of tax under the provisions of section 115 JB of the Act along with the interest under section 234A/B confirmed by CIT-A - HELD THAT - As there was no defect pointed out by the learned AR for the assessee in the order of the authorities below. Therefore, we do not find any infirmity in the order of the authorities below. Hence the ground of appeal of the assessee is dismissed.

Summary

Issues Involved:
1. Denial of deduction under Section 80JJA of the Income Tax Act, 1961.
2. Validity of reopening assessments under Section 147 of the Income Tax Act.
3. Charging tax under Section 115JB and interest under Sections 234A and 234B of the Income Tax Act.

Detailed Analysis:

1. Denial of Deduction under Section 80JJA:
The primary issue raised by the assessee was the denial of deduction under Section 80JJA. The assessee claimed this deduction for the assessment years 2000-01 to 2004-05, arguing that their business of collecting and processing biodegradable waste began commercially in the assessment year 1999-2000. However, the Assessing Officer (AO) and the Commissioner of Income Tax (Appeals) [CIT(A)] found that the business commenced in the assessment year 1994-95, making the assessee ineligible for the deduction beyond the assessment year 1998-99. The Tribunal upheld this view, noting that the assessee had made sales, claimed depreciation, and availed deductions under Section 80IA starting from 1994-95. The Tribunal concluded that the benefits under Section 80JJA were intended to begin from the commencement of the business, which in this case was 1994-95, thus dismissing the assessee’s appeal.

2. Validity of Reopening Assessments under Section 147:
The assessee challenged the reopening of assessments for the years 2000-01, 2001-02, and 2003-04 under Section 147, arguing that it was based on a change of opinion and that all material facts were fully disclosed in the original returns. The Tribunal found that the reopening was based on the AO’s verification of assessment records without any new tangible material. Since no scrutiny assessment under Section 143(3) was conducted initially, the Tribunal ruled that the concept of change of opinion did not apply. The Tribunal dismissed the additional grounds, upholding the CIT(A)’s decision to validate the reopening of assessments.

3. Charging Tax under Section 115JB and Interest under Sections 234A and 234B:
For the assessment year 2004-05, the AO observed that the assessee had a book profit liable to tax under Section 115JB but did not offer any tax under this provision. Consequently, the AO levied tax under Section 115JB along with interest under Sections 234A and 234B. The CIT(A) upheld this decision. During the Tribunal proceedings, the assessee did not present any arguments against this ground, effectively conceding to the AO’s and CIT(A)’s findings. The Tribunal found no defect in the lower authorities' orders and dismissed the appeal.

Conclusion:
The Tribunal dismissed all appeals filed by the assessee, upholding the decisions of the lower authorities on all issues, including the denial of deductions under Section 80JJA, the validity of reopening assessments under Section 147, and the charging of tax and interest under Sections 115JB, 234A, and 234B.