2007 (9) TMI 331 - AT - Income Tax

Summary

Issues Involved:
1. Re-opening of assessment u/s 148.
2. Benefit of re-opening favoring the revenue.
3. Assessing Officer traveling beyond reasons for reassessment notice.
4. Validity of reassessment based on a non est original return and denial of section 10A benefit.

Summary:

Re-opening of assessment u/s 148:
The first issue raised is that Commissioner of Income-tax (Appeals) erred in upholding the re-opening of assessment u/s 148. The Tribunal found that the initial assessment was processed u/s 143(1) and referred to the Hon'ble Apex Court decision in Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 291 ITR 500, which held that intimation u/s 143(1A) cannot be treated as an assessment order. Therefore, the Tribunal dismissed the ground raised by the assessee.

Benefit of re-opening favoring the revenue:
The next issue raised is that the Commissioner of Income-tax (Appeals) is not justified in opining that the benefit of re-opening is only to favor the revenue and cannot be used to favor the assessee. The Tribunal upheld the Commissioner of Income-tax (Appeals)'s view, supported by the Hon'ble Apex Court decision in CIT v. Sun Engineering Works (P.) Ltd. [1992] 198 ITR 297, and dismissed this issue raised by the assessee.

Assessing Officer traveling beyond reasons for reassessment notice:
The next issue raised pertains to the Assessing Officer traveling beyond the reasons for the issue of notice for reassessment. The Tribunal referred to the Hon'ble Apex Court decision in Hind Wire Industries Ltd. v. CIT [1995] 212 ITR 639, which stated that once an assessment is re-opened, the initial order ceases to be operative, and the whole proceedings start fresh. The Tribunal found that the Commissioner of Income-tax (Appeals) was within his jurisdiction to give the aforesaid directions and dismissed this ground raised by the assessee.

Validity of reassessment based on a non est original return and denial of section 10A benefit:
The assessee raised additional grounds, arguing that the revised assessment pursuant to re-opening is illegal as the Assessing Officer proceeded with reassessment based on a non est original return, disregarding the revised return filed. The Tribunal noted that the original return did not claim exemption u/s 10A, and the revised return filed in response to the notice u/s 148 was not considered due to a clerical error. The Commissioner of Income-tax (Appeals) held that the assessee's claim for exemption u/s 10A in the revised return was not valid as it was not claimed in the original return, and no Audit Report in Form No. 56F was filed initially. The Tribunal upheld this view, citing the Hon'ble Apex Court decision in Sun Engineering Works (P) Ltd.'s case, which stated that no fresh exemption can be claimed during reassessment proceedings. The Tribunal also found no merit in the assessee's contention regarding section 152(2) and dismissed the additional grounds raised by the assessee.

Conclusion:
In the result, the appeal by the assessee is dismissed.