9911796707
TMI Blog2012 (8) TMI 635X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst the demand for the assessment year 1998-99. Subsequently, the Assessing Officer found that income had escaped assessment due to non-deduction of 90% of the service charge from the profits of business for the purpose of computation of deduction under section 80HHC. Accordingly, notice was issued to the assessee under section 148 on 6.6.2006. The assessee gave reply to the notice vide letter dated 10.07.2006 stating that original return filed be treated as return filed in pursuance of notice issued under section 148 and also sought reasons for reopening of assessment. The Assessing Officer stated the reason for reopening of assessment as under:- "While claiming the deduction u/s.80HHC, the assessee has not deducted 90% of the service charges of Rs..25 lakhs from the profits of business. Thus there is an excess allowance of deduction u/s.80HHC of Rs. 53.29 lakhs, which needs to be withdrawn." Notice under section 143(2) dated 14.06.2007 was issued to the assessee and the case was taken up for scrutiny. Assessment under section 143(3) read with section 147 was completed on 26.12.2007 determining the total income of the assessee at Rs. 5,37,08,625/- by recomputing deduction clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned CIT(A) has erred in upholding the reopening of the assessment when the Assessing Officer had issued a notice of reopening under section 148 of the Act on the company which ceased to exist, on the date of issue of the notice. Consequently the CIT(A) has erred in upholding the assessment of the income of the amalgamating company in the hands of the amalgamated company in a manner not provided under law. 2. The CIT(A) has erred in upholding the reopening of the assessment, when there is no fresh material to prove that the income has escaped assessment and the reasons stated by the Assessing Officer were based on material which are already available and part of the assessment records of the appellant. 3. The CIT(A) has erred in upholding the reopening of the assessment when the Assessing Officer has erred in not stating whether a valid sanction for issue of notice under section 148 of the Act has been obtained or not. The appellant also challenges that valid approvals have not been obtained before reopening the assessment. 4. The CIT(A) has erred in holding the order of assessment, when the reason stated for reopening of the assessment has been already settled in favour of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment bill) 2005, with retrospective effect from 1st April, 1998 which was not a subject matter of reopening the assessment. 12. The CIT(A) has failed to appreciate that value of DEPB licence accrued are not profit on sale or transfer of DEPB licences and thus would not covered under the new proviso to section 80HHC(3)(1) of the Act which was introduced by Taxation Law (2nd Amendment bill) 2005, with retrospective effect from 1st April, 1998. 13. The CIT(A) has erred in upholding the order of the Assessing Officer excluding 90% of entire sale value of DEPB licence sold during the year as profit on sale or transfer of DEPB licences under the new proviso to section 80HHC(3)(1) of the Act which was introduced by Taxation Law (2nd Amendment bill) 2005, with retrospective effect from 1st April, 1998." 6. The learned Authorized Representative for the assessee submitted that notice issued under section 148 to the assessee is not valid. Notice being defective has vitiated the entire reopening proceedings. He submitted that notice was issued in the name of amalgamating company i.e. M/s.TI Diamond Chain Ltd. Since the said company has merged with M/s.Tube Investments of India Ltd. on 1.4.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TI Diamond Chain Ltd. had challenged the issue with respect to inclusion of service charges and insurance claim as profits of income under section 80HHC of the Act. The appeal of the assessee on the issue was allowed by the Tribunal vide order dated 14.9.2004. He submitted that Explanation 3 to section 147 clearly postulates that once the issue in notice has been dropped any other income cannot be assessed under the reopened assessment. In support of this contention, he relied on the decision of Hon'ble Bombay High Court in the case of CIT Vs. Jet Airways (I) Ltd. reported as 331 ITR 236(Bom). The learned A.R. submitted that since the main reason stated for reopening of assessment has been settled in favour of the assessee by the Tribunal vide its order dated 14.9.2004, which is binding on the department, there was no reason for the Assessing Officer to raise the same issue again. In support of this contention, he relied on the judgement of the Larger Bench of the Apex Court (5 Judges) in the case of Bhopal Sugar Industries Ltd. Vs. ITO reported as 40 ITR 618 (SC). The learned A.R. for the assessee also relied on the order of the co-ordinate Bench of this Tribunal in support of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in the eye of law and subsequent proceedings arising out of the said notice are void, illegal and totally without jurisdiction and it is a case of no notice to the assessee. The case of the assessee is also squarely covered by the order dated 23rd July, 2008 passed by the co-ordinate Bench of the Tribunal in the case of M/s. Bengal Tiger Line (India) Pvt. Ltd., in ITA No.2517/Mds/2006. We therefore allow this ground of the assessee. 10. The next ground raised by the assessee is with regard to dropping of the ground mentioned in the notice in the reopening proceedings. As per the contention of the assessee the Assessing Officer has failed to give valid reason for reopening of the assessment as the same has been settled in favour of the assessee in its own case by the Tribunal in ITA Nos. 332 & 2084/Mds/1997 relevant to the assessment years 1993-94 and 1994-95 (by Revenue) and in ITA No.2021/Mds/1997 for the assessment year 1994-95 (by the assesse) vide order dated 14.09.2004. Admittedly, the Revenue has not filed any appeal against the said order of the Tribunal dated 14.9.2004. Thus the above order of the Tribunal has attained finality. In the instant case, the issue of notice ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
