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2013 (11) TMI 1250 - HC - Income TaxWhether a new claim can be made in the reassessment proceedings The assessee has claimed deduction u/s 80I in the original as well as revised return He has never claimed deduction u/s 80J either in the original return or in the appellate stage - Held that - Following Commissioner of Income Tax Vs. Sun Engineering Works P. Ltd. 1992 (9) TMI 1 - SUPREME Court - Where reassessment is made under Section 147 and issuance of notice under Section 148, the Income Tax Officer s jurisdiction is confined to only such income which has escaped tax or has been under assessed and does not extend to revising, reopening or reconsidering the whole assessment and the assessee cannot be permitted to agitate questions which have been decided in original assessment proceedings. The reassessment has to be made only with regard to the subject matter of proceedings under Section 147 - A matter not agitated in the concluded original assessment proceedings also cannot be permitted to be agitated in the reassessment proceedings - The assessee had not claimed deductions under Section 80J of the Income Tax Act in the original assessment and the reassessment proceedings were regarding wrongful deductions under Section 80I - In the reassessment proceedings the assessee was not entitled to claim deductions under Section 80J - The assessee had not claimed the deductions under Section 80J either in the original stage or in the appellate stage Decided against assessee.
Issues Involved:
1. Whether the Tribunal was legally correct in holding that any income had escaped assessment within the meaning of section 148 by the reason of allowance of relief under section 80I, even though the quantum of relief issued in the original assessment was fully covered by the relief as was undisputedly admissible to the assessee under section 80J. Issue-wise Detailed Analysis: 1. Reopening of Assessments and Allowance of Relief under Section 80-I: The assessee had initially claimed relief under Section 80-I for the assessment year 1981-82, which was allowed. However, the assessments were later reopened on the grounds that the provisions of Section 80-I were not applicable, leading to income escaping assessment. The reopening was conducted under Section 147 of the Income Tax Act, 1961, and notice under Section 148 was issued. The assessee contended that the deduction allowable under Section 80-J was mistakenly allowed under Section 80-I and requested the proceedings under Section 148 to be dropped and the mistake rectified under Section 154. However, the Assessing Officer (A.O.) found that the assessee had consistently claimed deductions under Section 80-I in both the original and revised returns and had never claimed deductions under Section 80-J. 2. Findings of the Commissioner of Income Tax (Appeals): The Commissioner of Income Tax (Appeals), Varanasi, upheld the A.O.'s findings, stating that the claim under Section 80-J could not be allowed in proceedings under Section 147. The reassessment proceedings are meant for bringing to tax what has escaped assessment and do not allow the assessee to claim fresh reliefs and deductions. The facts on record were insufficient to decide the admissibility of relief under Section 80-J, and further investigation would be required. 3. Tribunal's Decision: The Income Tax Appellate Tribunal (ITAT) confirmed the order of the CIT Appeals, holding that the claim under Section 80-J was a fresh claim and could not be entertained in reassessment proceedings initiated under Section 148, which are for the interest of the revenue and not the assessee. 4. Legal Arguments and Precedents: The assessee argued that during reassessment under Section 148, the A.O. could redetermine the income and the assessee could claim deductions not previously claimed. The revenue countered that reassessment proceedings under Section 148 could not be used to grant any benefit to the assessee, citing the Supreme Court's decision. The court discussed various precedents, including the landmark case of Commissioner of Income Tax Vs. Sun Engineering Works P. Ltd., which clarified that reassessment is confined to income that has escaped assessment and does not allow for reconsidering the whole assessment or permitting fresh claims. 5. Court's Conclusion: The court concluded that the nature, quantum, procedure, and eligibility criteria for deductions under Sections 80-I and 80-J are entirely different. The assessee's attempt to claim deductions under Section 80-I instead of Section 80-J was unsuccessful. The reassessment proceedings under Section 147 are limited to addressing escaped income and do not extend to revising the entire assessment or allowing new claims. The court found no illegality in the ITAT's order and decided the question of law against the assessee and in favor of the revenue. Final Judgment: The reference was answered against the assessee, upholding the ITAT's decision that the assessee could not claim deductions under Section 80-J in the reassessment proceedings initiated for wrongful deductions under Section 80-I.
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