9911796707
TMI Blog2012 (11) TMI 470X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income Tax Act in the year 1998 extended the tax holiday period under section 10B from 5 years to 10 years. Consequently, the assessee was eligible to claim deduction from assessment year 1995- 96 to 2004-05. 3. The assessee filed its return of income relevant to the assessment year 2004-05 on 31.10.2004 admitting total income of Rs.33,06,031/- before claiming deduction under section 10B of Rs.33,06,031/-.The Assessing Officer made scrutiny assessment under section 143(3) on 29.9.2006. In the scrutiny assessment, deduction under section 10B was recomputed by excluding income from other sources and the total income was determined at Rs.36,42,560/-. Thereafter, on 23.3.2007 a revision order was made and gratuity amounting to Rs.40,203/- was excluded to recompute deduction under section 10B. As per the revised assessment order, the total income of the assessee was determined at Rs.33,91,640/-. Later on, the Revenue alleged that the assessee had claimed deduction under section 10B in the 11th year. According to the provisions of section 10B the deduction is available only upto 10th year of production. Notice under section 148 was issued to the assessee on 29.8.2010. The Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 2004-05 and not assessment year 2003-04 as has been wrongly held by the Assessing Officer as well as the first appellate authority. 6. The A.R. submitted that the Assessing Officer has wrongly assumed jurisdiction in reopening of assessment under the provisions of section 147 of the Act beyond the period of four years. In order to support his contentions, he relied on the judgement of the Hon'ble Supreme Court of India in the case of CIT Vs. Kelvinator of India Ltd., reported as 320 ITR 661(SC) = (2010-TIOL-06-SC-IT) and the judgement of the Hon'ble Madras High Court in the case of Sri Sakthi Textiles Ltd. Vs. JCIT., reported as 340 ITR 144 = (2010-TIOL-864-HC-MAD-IT). The A.R. submitted that the assessee had submitted all the necessary documents as required by the Assessing Officer during the course of initial assessment. At the time of making assessment under section 143(3), the Assessing Officer had an occasion to go through all the documentary evidences tendered by the assessee. Reopening proceedings have been initiated only on account of change of opinion on the part of the Assessing Officer. It is not the case of the Revenue that the assessee had not submitted any docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide order dated 23.03.2007 to recompute the deduction under section 10B after excluding gratuity. Thereafter, notice under section 148 was issued to the assessee on 29.3.2010. To determine the validity of the reassessment proceedings, it is relevant to first examine the provisions of section 147. The relevant extract of section 147 is reproduced herein below:- Section 147: Income escaping assessment: "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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 10B for the first time in the assessment year 1995-96. This fact has been admitted by the Revenue in the assessment year 1999-2000. The assessee has placed on record the order of the CIT(A) dated 21.10.2005 relevant to the assessment year 1999-2000 at page 10 to 16 of the paper book. The CIT(A) has given a categoric finding that the assessee has exercised its option to avail tax holiday for a period of five years commencing from assessment year 1995-96. Since, the tax holiday has been extending from 5 years to 10 years by the amendment to the Income Tax Act in 1998 and the assessee is eligible to avail tax holiday under section 10B of the Act upto the assessment year 2004-05. The factual findings of CIT(A) have been reproduced in para 7 hereinabove. The findings of the CIT(A) were not challenged by the Revenue in appeal before the Tribunal. The factual position was admitted by the Revenue way back in the year 2005. The assessee has also placed on record the Chartered Accountant's Report under section 10A/10B of the Income Tax Act which is at page 3 to 7 of the paper book. In the Annexure 'A' of the said Report it has been specifically mentioned that assessment year 2004-05 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-94 to 1997-98. The amended provision came into force on 1.4.1999. He is entitled to the tax holiday under the amended provision i.e. from 1993-94 to 2002- 03. He claimed benefit from 1999-2000, 2000-01 and 2001-02. It is for the period 2001-02, the benefit is denied. The said denial of the benefit runs counter to the spirit of section 10B and it would negate the object with which the amended provision was brought in. The assessee is entitled to the benefit of extension from 5 years to 10 years tax holiday as provided under the amended provision for 10 consecutive years from the date of commencement of production. In that view of the matter, the order passed by the Tribunal as well as the First Appellate Authority is strictly in accordance with law and do not suffer from any legal infirmity, which calls for interference. No substantial question of law arises for consideration in this appeal." 13. A perusal of the above findings clearly shows that the case of the assessee is squarely covered by the judgement of the Hon'ble High Court. The Hon'ble Karnataka High Court has not only granted relief to the assessee, rather it came heavily on the Revenue for filing such frivolous petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions of section 10B is to promote exports. The Revenue is unnecessarily harassing the assessees as well as wasting the time of the courts. The Hon'ble High Court has even imposed heavy cost of Rs.1.00 lakh on the officer who has taken a decision to file appeal. In the case in hand, the CIT(A) has misread the findings of the Hon'ble Karnataka High Court. It seems that the CIT(A) has deliberately ignored the findings of the Hon'ble High Court given in para 9 and the strictures passed against the Revenue in para 10. The CIT(A) by referring to para 8 of the judgement only in his order has misconstrued the same by reading it out of context. It is highly improbable that the CIT(A) read only para 8 and did not notice para 9 and 10 of the judgement. 15. We are of the considered opinion that the order has been passed by the CIT(A) in a non-judicious and arbitrary manner. The order of the CIT(A) is not only against the law laid down by the Hon'ble High Court but smacks malafide on the part of the CIT(A). It is evident that the CIT(A) has committed "intellectual dishonesty" extending it to the limit of perversity. The impugned order has burdened the assessee with the avoidable cost of litiga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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