2022 (10) TMI 458 - AT - Income Tax

Reopening of assessment u/s 147 - claim of deduction u/s 10B - reopening of the assessment after a period of 4 years from the end of the relevant A.Y - CIT-A s ustaining the reassessment order of AO who had reopened the assessment undersection 148 - HELD THAT - We find the order of the CIT (A) is a very skechy and a cryptic one. The order of the learned CIT (A) neither addresses the grounds raised by the assessee challenging the validity of the re-assessment proceedings nor addresses the allowability of claim of deduction under section 10B on account of such false and inaccurate particulars. On a pointed query raised by the Bench, the learned Counsel for the assessee submitted that he has no control over the reasons given by CIT (A) while allowing the deduction especially when the assessee has filed all requisite details before the AO as well as before the CIT (A). We find neither the learned CIT (A) has addressed the various issues raised by the assessee challenging the validity of the re-assessment proceedings nor the CIT (A) has addressed the issues raised by the Assessing Officer while denying the claim of deduction u/s 10B. Considering all we deem it proper to restore the issue to the file of the learned CIT (A) with a direction to adjudicate the issue of validity of re-assessment proceedings as well as the claim of deduction u/s 10B of the I.T. Act by passing a speaking order giving pointwise reasonings on both the issues. The grounds raised by the Revenue as well as the grounds raised by the ass in the cross objection are accordingly allowed for statistical purposes.

Issues Involved:
1. Validity of the re-assessment proceedings initiated under section 148 of the Income Tax Act.
2. Eligibility of the assessee to claim deduction under section 10B of the Income Tax Act.

Issue-wise Detailed Analysis:

1. Validity of the Re-assessment Proceedings:
The assessee challenged the validity of the re-assessment proceedings initiated under section 148, arguing that the re-assessment was based on a mere change of opinion or audit objection without any tangible material. The original assessment under section 143(3) was completed on 28.03.2013, and the re-assessment was initiated beyond four years from the end of the relevant assessment year. The assessee contended that there was no failure on its part to disclose fully and truly all material facts necessary for the assessment.

The learned CIT (A) dismissed the challenge to the validity of the re-assessment proceedings, observing that the initiation of proceedings under section 147 was justified as it fulfilled the time limit under section 149(1)(b). The Tribunal, however, found that the order of the learned CIT (A) did not adequately address the grounds raised by the assessee challenging the validity of the re-assessment proceedings. Consequently, the Tribunal restored the issue to the file of the learned CIT (A) for a fresh adjudication, directing the CIT (A) to pass a speaking order giving pointwise reasonings on the issue of validity of re-assessment proceedings.

2. Eligibility of the Assessee to Claim Deduction under Section 10B:
The assessee claimed deduction under section 10B for its Export Oriented Unit (EOU), which was converted from a Domestic Tariff Area (DTA) unit. The Assessing Officer disallowed the deduction, stating that the approval granted by Visakhapatnam SEZ was for the conversion of an existing DTA unit established in 1994, not for a newly constructed unit. The Assessing Officer concluded that the assessee did not fulfill the conditions prescribed under section 10B(2)(ii).

The learned CIT (A) allowed the claim of deduction under section 10B, observing that the deduction was accepted by the Assessing Officer for the assessment years 2008-09 to 2011-12, and the deduction for the assessment year 2010-11 was initially allowed in the original assessment. The Tribunal found that the order of the learned CIT (A) was sketchy and did not address the issues raised by the Assessing Officer regarding the false claim of deduction under section 10B. The Tribunal restored the issue to the file of the learned CIT (A) for fresh adjudication, directing the CIT (A) to decide the issue as per fact and law after giving due opportunity of being heard to the assessee.

Separate Judgments for Different Assessment Years:
For the assessment year 2011-12, the grounds of appeal raised by the Revenue and the grounds of appeal raised by the assessee in the Cross Objection were identical to those for the assessment year 2010-11. The Tribunal restored the issues to the file of the learned CIT (A) for fresh adjudication for the assessment year 2011-12 as well, following similar reasonings.

Conclusion:
The Tribunal restored the issues of the validity of re-assessment proceedings and the eligibility of the assessee to claim deduction under section 10B to the file of the learned CIT (A) for fresh adjudication, directing the CIT (A) to pass a speaking order addressing both issues comprehensively. The appeals filed by the Revenue and the Cross Objections filed by the assessee were allowed for statistical purposes.

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