2022 (7) TMI 1540 - HC - Income Tax

Validity of reopening proceedings - eligibility of exemption u/s. 10B of the Act and also exemption on receipts relating to EMA - HELD THAT - Tribunal after elaborately considering the factual position found that the identical issue was adjudicated and decided in the assessment proceedings u/s 143(3) of the Act and the reopening was wholly without jurisdiction. There is no perversity in the order passed by the tribunal for us to interfere. Decided against revenue.

Summary

Issues:
Delay in filing the appeal, legality of reassessment proceedings, eligibility for exemption under Section 10B of the Income Tax Act, non-disclosure of material facts, jurisdiction of the Income Tax Appellate Tribunal.

Delay in Filing the Appeal:
The High Court of Calcutta addressed a delay of 68 days in filing an appeal and considered the reasons provided in the affidavit for condonation of the delay. The court exercised discretion and allowed the application, thereby condoning the delay and allowing the appeal to proceed.

Legality of Reassessment Proceedings:
The appeal filed by the revenue challenged the order of the Income Tax Appellate Tribunal quashing the reassessment proceedings. The High Court examined the substantial questions of law raised by the revenue, including the consideration of Section 147 of the Income Tax Act. The Tribunal had previously found the reopening proceedings to be illegal and without jurisdiction, as the issue had already been decided in the initial assessment proceedings under Section 143(3) of the Act. The High Court upheld the Tribunal's decision, citing the judgment in CIT vs. Kelvinator India Ltd., and dismissed the appeal on the grounds that no substantial question of law arose for consideration.

Eligibility for Exemption under Section 10B:
One of the substantial questions of law raised was whether the assessee company was eligible for exemption under Section 10B of the Income Tax Act. The Tribunal had already considered and decided on this issue during the initial assessment proceedings. The High Court noted that the matter had been deliberated upon by the Assessing Officer, CIT(A), and the Tribunal, and found that the issue was squarely covered in favor of the assessee based on the judgment of the Hon'ble Supreme Court. The High Court affirmed the Tribunal's decision, stating that there was no perversity in the order to warrant interference.

Non-disclosure of Material Facts:
The High Court emphasized that in the present case, the assessment for the relevant assessment years had been completed under Section 143(3) of the Act, and there was no finding that the assessee had failed to disclose all material facts necessary for assessment. The court highlighted that the issue had been thoroughly examined in the initial assessment proceedings, and the reopening of the assessment was deemed to be without jurisdiction.

Jurisdiction of the Income Tax Appellate Tribunal:
The High Court's judgment affirmed the Tribunal's decision that the reassessment proceedings were illegal and lacked jurisdiction. The Tribunal's detailed consideration of the factual position and its finding that the issue had already been decided in the initial assessment proceedings led the High Court to dismiss the appeal filed by the revenue. Consequently, the connected application for stay was also closed.