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TMI Blog2012 (4) TMI 464X X X X Extracts X X X X X X X X Extracts X X X X ..... der Section 80-IA [7] in form No. 10CCB. The return was also accompanied by the annual report of the petitioner company for the said year. 2.2 Assessing Officer of the petitioner sent a notice under Section 143[2] of the Act to the petitioner along with detailed questionnaire and those were replied to by the petitioner by its letter dated March 5, 2008. 2.3 One of the queries was regarding deduction under Section 80-IA of the Act. The writ-petitioner in that reply supplied over again report in Form 10CCB and reproduced the provision of Section 80-IA [4] indicating the applicability of the benefit to the nature of the enterprises. The writ-petitioner also pointed out that the company had entered into an agreement with a Government of Gujarat Company by the name of Gujarat Green Revolution Company Ltd. and also with a Government of Andhra Pradesh Company by the name of Andhra Pradesh Micro Irrigation Project for supply and installation of Micro Irrigation System. 2.4 The Assessing Officer passed scrutiny assessment order dated March 25, 2008 and in the said order, the Assessing Officer specifically referred to the above questionnaire and the above letter dated March 5, 2008. It ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61. In view of the facts discussed above, I have reason to believe that income of Rs. 106,28,939/- being the amount of inadmissible deduction wrongly claimed by the assessee u/s. 80IA[4] chargeable to tax has escaped assessment for A.Y. 2006-07 and accordingly it is the fit case for reopening the assessment u/s. 147 for AY 2006-07." 2.9 The writ-petitioner, on September 1, 2011 filed objections pointing out that the notice impugned for reopening was based on mere change of opinion, because the benefit under Section 80-IA was allowed after the relevant points underwent the process of inquiry and assessment during the proceedings under Section 143[3] of the Act. 2.10 The Assessing Officer, however, rejected the objections by his order dated September 18, 2011 thereby alleging that it was not a case of change of opinion. 3. Being dissatisfied, the writ-petitioner has come up with the present writ-application. 4. Mr. J.P. Shah, learned counsel appearing with Mr. Manish J. Shah, on behalf of the petitioner strenuously contended before us that the change of opinion cannot be the basis of notice under Section 148 of the Act within four years. According to Mr.Shah, in the course of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 147 of the Act, which is quoted below. Income escaping assessment. "147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned [hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year]: Provided that where an assessment under sub-section [3] of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section [1] of section 142 or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter. 11. The Supreme Court in the case of The Commissioner of Income tax, Gujarat v. M/s. A. Raman and Co. reported in AIR 1968 SC 49 had the occasion to deal with such a question. We may appropriately refer to the following observations made by a three-judge-bench in the above matter by relying upon the majority view taken in an earlier decision of that court taken by a bench of five judges: "4. It was held by this Court in Calcutta Discount Co. Ltd. v. Income-tax Officer, [1961] 41 ITR 191 = (AIR 1961 SC 372) that the High Court in appropriate cases has power to issue an order prohibiting the Income-tax Officer from proceeding to reassess the income when the conditions precedent do not exist. At p. 207, K. C. Das Gupta, J., delivering the majority judgment of the Court observed: "It is well settled however that though the writ of prohibition or certiorari will not issue against an executive authority, the High Courts have power to issue in a fit case an order prohibiting an executive authority from acting without jurisdiction. Where such action of an executive authority acting without jurisdiction subjects or is likely to subject a person to lengthy proceedings and unnecessa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hargeable to tax had escaped assessment. But the jurisdiction of the Court extends no further. Whether on the information in his possession he should commence a proceeding for assessment or reassessment, must be decided by the Income-tax Officer and not by the High Court. The Income-tax Officer alone is entrusted with the power to administer the Act; if he has information from which it may be said prima facie, that he had reason to believe that income chargeable to tax had escaped assessment, it is not open to the High Court, exercising powers under Article 226 of the Constitution, to set aside or vacate the notice for reassessment on a re-appraisal of the evidence. 7. The High Court in this case was apparently of the view that the information in consequence of which proceedings for reassessment were intended to be started, could have been gathered by the Income-tax Officer in charge of the assessment in the previous years from the disclosures made by the two Hindu undivided families. But that, in our judgment, is wholly irrelevant. Jurisdiction of the Income-tax Officer to reassess income arises if he has in consequence of information in his possession reason to believe that inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erial fact necessary for the assessment of the respondent for the relevant assessment years. The High Court was right in holding that the Income-tax Officer had no valid reason to believe that the respondent had omitted or failed to disclose fully and truly all material facts and consequently had no jurisdiction to reopen the assessments for the four years in question. Having second thoughts on the same material does not warrant the initiation of a proceeding under Section 147 of the Income-tax Act 1961." (Emphasis supplied). 16. At this stage, we may rather aptly refer to a latest three-judge-bench decision of the Supreme Court in the case of Commissioner of Income tax vs. Kelvinator of India Ltd. reported in (2010) 2 SCC 723 where the said court after taking into consideration the effect of Direct Tax Laws (Amendment) Act, 1987 on section 147 made the following observations while dismissing the appeals preferred by the Revenue: "5. On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfilment of the said conditions alone conferred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out that the meaning of the expression, 'reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from Section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended Section 147 to reintroduce the expression 'has reason to believe' in the place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new Section 147, however, remain the same." (emphasis supplied) 9. For the aforestated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs." (Emphasis given by us). 17. Bearing in mind the aforesaid principles, we now propose to consider the case before us. 18. After hearing the learned counsel for the parties and after going through the materials on record, we find that the only reason for issuing notice under Section 148 is reflected in the second and the third paragraph of the written reason sent to the petitioner, which we have already quoted above. According to the said reason, it had come to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of second thought on the same materials. 23. Mr. Bhatt at this stage tried to convince us that at the time of original assessment, the Assessing Officer could not apply the provision contained in Explanation added to sub-section (13) of Section 80-IA of the Act, which was substituted in the year 2009 with effect from April 1, 2000. Mr. Bhatt submits that the Explanation 3 to Section 147 of the Act authorizes him to take such point before us notwithstanding the fact that such point was not taken by the Assessing Officer in the reason assigned in support of the notice. 24. We find that the Explanation to sub-section (13) of Section 80IA of the Act in vogue at the time of original assessment was inserted by the Finance Act, 2007 with effect from April 1, 2000 and at that time, the same was as follows: "Explanation- For the removal of doubts, it is hereby declared that nothing contained in this section shall apply to a person who executes a work contract entered into with the undertaking or enterprise, as the case may be." Subsequently, by way of further amendment of Finance Act, 2009 with effect from April 1, 2000 the above Explanation was substituted by the following one: "Expl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is quoted below: "1. Heard learned counsel for the parties. 2. Leave is granted. 3. By the order under challenge, a Division Bench of the High Court at Delhi dismissed the writ petition filed by the appellant challenging the validity of notices issued under Sections 148 and 143(2) of the Income Tax Act, 1961. The High Court took the view that the appellant could have taken all the objections in its reply to the notices and that, at that stage, the writ petition was premature. Accordingly, the writ petition was dismissed on 31-1-2001. Aggrieved by that order, the appellant is in appeal before us. 4. Mr M.L. Varma, learned Senior Counsel appearing for the appellant, submits that the impugned notices related to seven assessment years; that during the pendency of these appeals, in respect of two assessment years viz. 1995-96 and 1996-97, assessment has been completed against which appeals have been filed. Notices relating to the other five assessment years viz. 1992-93, 1993-94, 1994-95, 1997-98 and 1998-99, are now the subject-matter of these appeals. 5. We see no justifiable reason to interfere with the order under challenge. Howe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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