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2015 (6) TMI 136 - HC - Income TaxReopening of assessment - deduction u/s. 80HH - Held that - On the facts and circumstances of the case, the Tribunal was not justified in upholding the validity of the Reassessment Order dated 3.6.93 passed u/s. 143(3) r.w.s. 147 of the Act especially when the original assessment order passed u/s. 143(3) of the Act on 15.12.1989 was cancelled by C.I.T., Amritsar vide his order dated 28.2.92 passed u/s. 263 of the Act and no fresh order was passed pursuant thereto. In view of the decision of Commissioner of Income-tax vs. Greenworld Corporation 2009 (5) TMI 14 - SUPREME COURT OF INDIA once we answer question No.1 in favour of the appellant-assessee, it is held that the Tribunal was not right in holding that assessment was validly reopened u/s. 147 of the Act, in spite of the fact that all primary facts were disclosed by the appellant in the return of income and after considering the same, deduction u/s. 80 HH was allowed on interest income, dividend income and rental income in the original assessment and hence mere change of opinion does not constitute information within the meaning of Section 147 of the Act . - Decided in favour of assesse.
Issues:
Challenging order of Income Tax Appellate Tribunal for assessment year 1987-88. Analysis: The appellant, a company, set up an industrial undertaking in Jammu & Kashmir for tax benefits under section 80HH of the Income-tax Act. Income from interest, dividend, and rental income was considered derived from the industrial undertaking, allowing deduction under section 80HH in the original assessment order. The Commissioner sought to revise the assessment, leading to a notice for reopening the assessment for 1987-88. The Tribunal upheld the validity of the reassessment order dated 3.6.93 under section 143(3) read with section 147 of the Act, despite the original assessment order being canceled by the Commissioner under section 263 of the Act. The appellant contended that all primary facts were disclosed in the return of income, and the reassessment was merely a change of opinion on the same set of facts, citing legal precedents to support their argument. The appellant relied on legal decisions such as Ador Technopack Ltd. vs. Dr. Zakir Hussein and Commissioner of Income Tax, Delhi vs. Kelvinator of India Limited to argue that the reassessment was invalid as the primary facts were disclosed, and the reassessment was based on a change of opinion rather than new information. The High Court, considering the arguments and legal precedents, concluded in favor of the appellant. The Court held that the Tribunal was not justified in upholding the validity of the reassessment order and that the reassessment under section 147 of the Act was not valid, as all primary facts were disclosed in the original return of income, and the reassessment was based on a mere change of opinion, not new information. The Court allowed the appeal, ruling in favor of the appellant-assessee and against the revenue. In summary, the High Court ruled in favor of the appellant, holding that the reassessment under section 147 of the Act was not valid as it was based on a change of opinion rather than new information, and all primary facts were disclosed in the original return of income. The Court allowed the appeal, overturning the Tribunal's decision and ruling in favor of the appellant-assessee.
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