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TMI Blog2014 (1) TMI 930X X X X Extracts X X X X X X X X Extracts X X X X ..... as invalid in law – Thus initiation of proceeding u/s 147 of the Act and the assessment order passed in cannot be considered to be valid firstly for the reason that there being no failure on the part of the assessee to disclose fully and truly all material facts, no reopening could have been made after expiry of 4 years from the end of the assessment year and secondly, there being no fresh and tangible material before the AO for initiating proceeding u/s 147 of the Act, initiation of proceeding on a mere change of opinion is invalid and bad in law – Decided against Revenue. - ITA No. 419/Hyd/2013 - - - Dated:- 12-7-2013 - Shri Chandra Poojari And Shri Saktijit Dey,JJ. For the Appellant : Shri P. Somasekhar Reddy For the Respondent by : Shri V. Shiv Kumr ORDER Per Saktijit Dey, J.M. This appeal preferred by the Revenue is directed against the order of CIT(A)-III, Hyderabad, dated 17/01/2013, for the assessment year 2003-04 wherein the department has raised the following effective ground: "2. The CIT(A) erred in law in holding that reopening u/s 147 is invalid though there is failure on the part of the assessee to make wrong claim of deduction u/s 80HHC on roya ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examining the claim u/s 80HHC proceeded to recompute the deduction after considering all the facts and materials submitted in course of assessment proceeding. It was submitted that, while computing deduction in the original assessment u/s 80HHC, the AO has also excluded sales tax recoveries/excess recoveries from the total turnover, which were later on allowed in the appellate proceedings, hence, the deduction u/s 80HHC received substantial attention and verification during the original assessment proceedings. It was submitted that after completion of original assessment, the issue whether mining franchise fees accrued to the assessee in the year under consideration was considered threadbare by the CIT(A) ITAT. Both the CIT(A) as well as ITAT held that the mining franchise fees accrued to the assessee notwithstanding the fact that liability to pay the same, was an obligation of the various joint venture companies by contract. It was, thus, submitted that entire gamut of the circumstances relating to origin and progression of the nature of mining franchise fees, its accrual and receipt have been the subject matter of assessment, appeal and further appeal. Hence, no fresh facts ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f notice u/s 148 was not in order. Accordingly, the assessment based on invalid notice is null and void. Thus being the case, I am not going into the merits of the grounds because the assessment itself stands annulled." 6. Aggrieved by the order of the CIT(A), the revenue is in appeal before us. 7. The learned DR supporting the action of the AO in initiating proceedings u/s 147 of the Act, submitted that the AO while completing original assessment having wrongly calculated the deduction claimed u/s 80HHC of the Act by not reducing the mining franchise fees, initiation of proceeding u/s 147 of the Act is valid. 8. The learned AR, on the other hand, strongly supporting the order of the CIT(A) submitted that the assessee having disclosed truly and fully all material facts necessary for its assessment in the return of income as well as in course of original assessment proceeding u/s 143(3) of the Act, reopening of the assessment after expiry of 4 years from the end of the AY is invalid in law. The learned AR further inviting our attention to the discussion made by the AO in his order passed on 18/01/2006 u/s 143(3) of the Act submitted that the AO has discussed in great deal with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, the assessment was reopened for the reason that the AO while calculating deduction u/s 80HHC of the Act, has omitted to deduct 90% of mining franchise fees. 10. On perusal of the assessment order passed u/s 143(3) of the Act on 18/01/2006, a copy of which has been submitted by the learned AR before us, it is very much clear that at the time of original assessment proceeding all facts relating to the mining franchise fees was available on record before the AO and the AO after considering all the facts and materials on record in the light of the ratio laid down in various judicial precedents ultimately came to a conclusion that it accrues as income to the assessee during the assessment year under dispute and added it to the total income of the assessee. This fact is very much clear from the discussion made by the AO in para 11 to para 11.7 of the original assessment order. Similarly, on going through the discussion made by the AO in para 12 12.1 of the original assessment order it becomes clear that the AO has thoroughly applied his mind while considering the assessee's claim of deduction u/s 80HHC of the Act and taking into note the ratio laid down in various judicial preced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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