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TMI Blog2014 (6) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... rther explained by way of addition of the Explanation - it is not a case of introduction of new provision of law by retrospective operation – the assessee had disclosed all the materials regarding its activities and there was no suppression of materials - the AO gave benefit of the provision by considering the then Explanation which was substantially the same and thus, it could not be said that any income escaped assessment in accordance with the then law - the AO has now given a second thought over the same materials and according to him, as the assessee is a contractor or supplier of irrigation products, it cannot be called a developer of any new infrastructural facility. The only ground which had made the AO to initiate proceedings of reassessment is the insertion of explanation to sub-section (13) of section 80IA which substituted earlier explanation giving retrospective effect to the said provision from 1.4.2000 - Such provision being always there on the record and the AO having already scrutinized the entire issue threadbare, even though notice is issued within four years from the end of the relevant assessment year, issuance of such notice has to be held as nothing but a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the above, I have reasons to believe that the income chargeable to tax has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961. Issue notice u/s.148 of the I.T.Act, 1961. 6. Objections were raised to such reasons by communication dated 15th September 2010, which have been disposed of by an order dated 4th October 2010 reiterating the ground of amendment by way of explanation after sub-section (13) of section 80IA(4), with retrospective effect from 1.4.2000 by holding that the reassessment proceedings have rightly been initiated. The petitioner, therefore, challenged the proceedings of reopening on such disposal of the objections by way of present petition. 7. The petitioner has been protected by way of interim relief while admitting the matter on issuance of Rule. The respondent filed its affidavit in reply in response to service of such order. Details provided therein contain, inter alia, that the notice of reassessment u/s. 148 of the Act is within four years from the end of the relevant assessment year and there is an under-assessment on account of wrong claim of deduction allowed under section 80IA(4) of the Act. Further affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 80IA(4) available to any enterprise carrying on developing or developing and maintaining or developing, maintaining and operating infrastructural facility, as under: It was noticed from the submission of the assessee filed during the course of assessment proceedings that for the EPC Turnkey contract for Rapar Taluka Rural Water Supply Scheme the assessee has contract with Electrosteel casting Ltd., Kolkata, which is a private limited company. As discussed earlier, an enterprise engaged in developing any infrastructure facility is eligible for deduction only if it has entered into an agreement with the Central Government or a State Government or a local authority or any other statutory body for developing of any infrastructure facility. It has further been clarified by way of explanation to section 80IA(4), w.e.f. 1.4.2000, that deduction will not be available to a sub-contractor carrying out such work of infrastructural development as per agreement with an enterprise which may be eligible for deduction. This fact was brought to the notice of the Authorised Representative of the assessee during the course of hearing on 24.12.2006. He was, however, not able to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs have been initiated. 12. It is incidental to mention that yet another such attempt of reopening of assessment on this very issue in case of the very assessee also failed for AY 2003-04 when CIT (A) held such action of AO as change of opinion. 13. Constitutional validity of retrospective amendment through explanation below sub-section (13) of section 80IA by Finance Act, 2009 had been challenged before this Court and this Court in the case Katira Construction Ltd. v. Union of India [2013] 352 ITR 513 has upheld the validity of the same. This Court held the same to be clarificatory in nature in the following manner: 34. Clearly, thus, post 1.4.2002 also, the involvement of the enterprise in developing infrastructure facility when the claim was covered under such expression was essential. In the same context, we must understand the expression developing or operating and maintaining or developing, operating and maintaining. Keeping in mind the new areas where such private participation would be required and therefore had to be encouraged and keeping in mind that such areas, such as, surface transport, water supply, water treatment system, irrigation project, etc. woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... natory in nature and did not mend the existing statutory provisions, the question of levying any tax with retrospective effect would not arise. If we agree with the submission of the counsel for the petitioners that such explanation restricted or aimed to restrict the provisions of deduction, certainly a question of reasonableness in the context of retrospective operation would arise. In the present case, however, we have come to the conclusion that the explanation only supplied clarity where, at best confusion was possible in the unamended provision. In that view of the matter, this cannot be seen as a retrospective levy even if we were to accept that withdrawal of a deduction would amount to a fresh levy. 37. Much stress was laid by the petitioners on the decision of this Court in the case of Parixit Industries Pvt. Ltd. (supra) to contend that the impugned explanation did not in any manner alter the statutory provisions contained in section 80IA(4) of the Act and therefore, deductions which were previously available cannot be withdrawn. We have already expressed our opinion on the effect of the explanation under challenge. In our understanding, we have not taken any stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eopen the assessment would be in the nature of second opinion. Thus, we do not think that we have stated anything which runs contrary to the ratio in the case of Parixit Industries Pvt. Ltd. (supra). In fact, the context of the said decision was entirely different from the challenge being considered by us in the present group of petitions. 14. This Court in the case of Parixit Industries (P.) Ltd. v. Asstt. CIT (OSD) [2013] 352 ITR 349 in a challenge to the proceedings of reopening, had not permitted issuance of notice of reopening only on the ground of insertion of explanation substituting earlier provision holding the provision of law retrospective w.e.f. 1.4.2000 when such amendment is held to be clarificatory in nature. Such clarificatory amendment since would be there on the statute book the same does not provide any new material to the Assessing Officer to assume jurisdiction. It would be profitable to reproduce the relevant discussion: 25. It is now a settled law that if an explanation is added to a section of a statute for the removal of doubts, the implication is that the law was the same from the very beginning and the same is further explained by way of addi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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