9911796707
TMI Blog2012 (11) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... s regard are dismissed - In the result, appeal of the revenue is dismissed. Deduction u/s 80HHC – Assessee had adopted incorrect adjusted export turnover and adjusted total turnover and also the eligible profits for working out deduction u/s 80HHC. The assessee adopted eligible profits without reducing 90% of other income admitted as ‘conversion charges’ and ‘technical consultancy charges’ amounting to Rs. 21,87,459/- as required under Explanation (baa) to section 80HHC. Thus resulted in excess claim of deduction u/s 80HHC – Held that:- There is no escapement of Income - Reopening is merely change of opinion of the Ao - decided in favour of assessee. - ITA No. 1236/HYD/2010 - - - Dated:- 8-6-2012 - SHRI CHANDRA POOJARI, AND SMT. ASHA VIJAYARAGHAVAN, JJ. Appellant by : Mr. M.S. Rao Respondent by : Mr. A.V. Raghuram ORDER PER ASHA VIJAYARAGHAVAN, J.M.: This appeal filed by the revenue is directed against the order of the CIT(A)-V, Hyderabad, dated 06/07/2010 for the assessment year 2004-05. 2. The assessee company engaged in manufacturing of bulk drugs and intermediates, filed its return of income for AY 2004-05 on 28/10/2004 declaring total taxable in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law, on the following reasons:- It received two separate letters from the ten AO both bearing No. DCIT 16(1)/L-65/2004-05 dt. 12/02/2008, in the month of February, 2008 i.e. about 14 months after completion of original assessment, wherein certain clarifications/objections were sought, based on an objection raised by the revenue audit party, in respect of the claims of deferred revenue expenditure and deduction u/s 80 HHC. Consequently, the appellant submitted two separate letters dt. 12/03/2008 and 13/03/2008, reiterating its explanations/clarifications, furnished during the original assessment proceedings. Subsequently, no action was taken by the then AO obviously for the reason that he was satisfied with the explanations filed on the issues involved, based on which a reply might have been sent to audit. Suddenly, after a lapse of one full year from the date of filing the above explanations by the appellant, thepresent AO decided to issue a notice u/s 148 on 26/03/2009, on the same issues, clearly at the insistence of the revenue audit. The above facts amply demonstrate that re-assessment was prompted by mere change of opinion, that too under the influence of the opinion of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A) held that the reopening was invalid observing as under: 4.7 Given the above ratios, the facts in the preset case are examined. Firstly, the original assessment was completed u/s 143(w) of the Act on 22/12/2006 and deduction u/s 8oHHC was allowed at Rs. 18,40,275/- after examining all the relevant facts. It is noteworthy that specific details regarding deduction u/s 80HHC, details of turnover, details of conversion charges as well as nature of deferred revenue expenditure was called for vide various letters of the AO during assessment proceedings. These details were duly provided. In this regard, the following extract from written submissions of the appellant is notworthy: The appellant submits that the action of the AO lacks both legal and factual strength. Both the above deduction/expenses were allowed by the AO in the original assessment only after thoroughly examining the allowability or otherwise of such deduction/expenses. All the relevant information was specifically required to be furnished during original assessment proceedings by the then AO. The relevant details called for by the AO during original assessment proceedings are as under:- (A) ACIT 16(1)lr. L-056 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the above facts and circumstances, it is clear that no new information had come before the AO and he merely wanted to review his earlier order based on an audit objection and his change of opinion. Therefore, the aforementioned ratios are clearly applicable in the present case. Accordingly, it is held that the act of issuing notice u/s 148 and assuming jurisdiction of section 147 of the Act was not valid as per law. These grounds of appeal are thus decided in favour of the appellant and the assessment is treated as null and void. Accordingly the other grounds of appeal need not be adjudicated upon. 10. Aggrieved the revenue is in appeal before us. 11. We have heard the arguments of both the parties and perused the record as well as the orders of the authorities below. No doubt that the reopening is within 4 years from the end of the Assessment Year and hence the Assessee cannot enjoy the benefit of Proviso to sec 147(1), which requires the Assessing Officer to show in what new material has come to his notice and in what manner the Assessee has omitted to provide full particulars, before he can reopen the Assessment. But still the courts have held that the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g u/s 147 of the Act. The said sub-section is fallacious. An order of assessment can be passed either in terms of subsection (1) of section 143 or sub-section (3) of section 143. When a regular order of assessment is passed in terms of the said sub-section (3) of section 143 a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of clause (e) of section 114 of the Indian Evidence Act judicial and official acts have been regularly performed. It if be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the Assessing Officer to reopen the proceeding without any thing further, the same would amount to giving a premium to an authority exercising quasi-judicial function to take benefit of its own wrong. The Apex Court confirmed the order of the Delhi High Court decision in this case in CIT v Kelvinator India Ltd (320 ITR 561). 14. Thus in our opinion the reopening is merely change of opinion of the Assessing Officer and he should have tangible material for forming an opinion that there has been an escape ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
