2012 (6) TMI 470 - HC - Income Tax

Deduction u/s 80HH - reassessment - prohibition contained in section 80HH(9A) - earlier deduction claimed u/s 80HHA - new ground before High Court - held that - When an entirely new issue is put forward by the assessee in an appeal under section 260A, we will not be able to decide the same because such question raised by the assessee does not arise out of the orders of the Tribunal. However, based on the facts on record, we uphold the position canvassed by the Revenue that reassessments are not time barred by virtue of the non-disclosure of the claim allowed in favour of the assessee under section 80HHA for the three preceding years which disentitled her for the claim of deduction under section 80HH for the year 1992-93 or any other year. However, in view of the new case put forward by the assessee before us which was not raised before any of the lower authorities, we vacate the orders of the Tribunal and the first appellate authority and restore the reassessments with a direction to the assessee to file rectification applications within six weeks from the receipt of this judg- ment for the Assessing Officer to consider whether in the original assess- ments 1992-93 and 1993-94 and no claim was made under section 80HH and the claim made was only under section 80HHA of the Act.

Summary

Issues:
1. Limitation period for reassessment under section 147.
2. Eligibility of deduction under sections 80HH and 80-I of the Income-tax Act.
3. New contention regarding deduction claim under section 80HH raised during the hearing.

Analysis:
1. The primary issue in this case pertains to the limitation period for reassessment under section 147 of the Income-tax Act. The original assessments for the years 1992-93 and 1993-94 were revised due to the withdrawal of relief claimed under sections 80HH and 80-I. The contention raised was whether the reassessment completed under section 147 is barred by limitation. The Assessing Officer found that the assessee was not entitled to deduction under section 80HH due to the prohibition under sub-section (9A) of section 80HH. The court held that there was suppression of material facts in the returns filed by the assessee, allowing the officer an extended period of limitation for reassessment beyond four years.

2. The second issue revolves around the eligibility of deduction under sections 80HH and 80-I of the Income-tax Act. The original assessment granted relief under these sections, but it was later found that the assessee was not entitled to deduction under section 80HH due to claiming relief under section 80HHA for preceding years. The court emphasized that an assessee making a claim under section 80HH must disclose facts related to the claim under section 80HHA for preceding years. The withdrawal of relief under section 80-I was disallowed as it was claimed and granted beyond the permissible period.

3. A new contention regarding the deduction claim under section 80HH was raised during the hearing, stating that the assessee had only claimed deduction under section 80HHA and not under section 80HH for the relevant year. However, this contention was not raised in the lower authorities or during the appeals process. The court noted that such a new issue cannot be decided as it does not arise from the tribunal's orders. Despite this, the court upheld the position that reassessments were not time-barred due to the non-disclosure of the claim allowed under section 80HHA for preceding years. The court vacated the previous orders and directed the assessee to file rectification applications for the Assessing Officer to consider the claim made under section 80HH. Depending on the outcome of the rectification applications, the reassessments may stand or be recalled.

This detailed analysis of the judgment provides insights into the issues of limitation for reassessment, eligibility of deductions under specific sections of the Income-tax Act, and the implications of raising new contentions during the legal proceedings.