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TMI Blog2014 (6) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... on - if the explanation is added to a statute for the removal of doubts, the implication is that the law was same from the beginning and the same is further explained by way of addition of the Explanation - it is not a case of introduction of new provision of law by retrospective operation, but when all the materials regarding activities of the assessee if are available on record and the benefit of the provision is already made available to such assessee, reassessment proceedings cannot be initiated only on account of addition of such Explanation. The AO on a detailed scrutiny had explained the claim made by the AO u/s 80IA(4) of the Act - Explanation clarified that the deduction u/s 80IA of the Act would not be admissible in the case of an assessee carrying on business in the nature of works contract – the AO initiated such proceedings of reopening solely on ground of insertion of explanation and it is to be held as mere change of opinion – the assumption of jurisdiction on the AO shall need to be interfered by way of writ jurisdiction – thus, the notice u/s 148 of the Act is to be set aside – Decided in favour of Assessee. - Special Civil Application Nos. 5848 2010, Special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tract awarded by any person (including the central or state Government) and executed by the undertaking or enterprise referred to in subsection1 . 3. Due to insertion of the explanation to section 80IA w.r.e.f. 01.04.2000, the assessee is not eligible for deduction u/s.80IA as claimed by the assessee as the assessee is a Civil Contractor working for Government. Therefore, I have reason to believe that income chargeable to tax has escaped assessment for the Assessment Year 4. Issue notice u/s.148 of the I.T. Act. 4. The petitioner objected to reassessment proceedings vide its communication dated May 03, 2010 contending inter alia that this is nothing but a change of opinion. The Assessing Officer on due scrutiny on the basis of the material available before it, allowed deduction under section 80IA of the Act. The reopening is only on account of amendment to the explanation under sub-section (13) of section 80IA of the Act, which was substituted by the Finance (No.2) Act, 2009 with effect from April 01, 2000, on the ground of retrospective effect from April 01, 2000. The assessee would not be eligible for deduction under section 80IA of the Act for the assessee being a civi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment for the year 2004-05 came to be framed on June 29, 2007. On having realised that the income chargeable to tax has escaped assessment, after recording the reasons, a notice under section 148 came to be issued on March 17, 2010, which is within a period of four years from the end of relevant assessment year as all requirement of law are fully complied with. The assumption of jurisdiction on the part of the Assessing Officer would not require any indulgence. It is further contended that there was no conscious consideration with regard to allowability of the deduction, taking into consideration the amendment to section 80IA(4) of the Act at the time of scrutiny assessment, and, therefore, this is not a case of change of opinion on the part of the Assessing Officer. It is also the averment of the respondent that the assessee is a Civil Contractor working for the Government and is not a Developer and, therefore, the deduction under section 80IA(4) of the Act would not be admissible to him in view of the explanation given below sub-section (13) of section 80IA of the Act, which has been substituted by the Finance (No.2) Act, 2009 with retrospective effect from April 01, 2000. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hile initiating reassessment is the explanation to section 80IA of the Act with effect from April 01, 2000. As per explanation given below sub-section (13) of section 80IA of the Act substituted by the Finance (No.2) Act, 2009, it has explained that the deduction under section 80IA of the Act would not apply in relation to a business referred to in sub-section (4) which is in the nature of works contract. This Court in the case of Katira Construction Ltd. (supra), where challenge was made to the provision of sub-section (4) of section 80IA of the Act, has held thus : 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. would necessarily be highly investment intensive, the Legislatur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 stand different from the decision of this Court in the case of Parixit Industrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 13. While deciding the issue of vires, the judgment rendered in the case of Parikshit Industries Pvt. Ltd. (supra) was taken note of. In Parikshit Industries Pvt. Ltd. (supra), the challenge was made to the issue of reopening. The Court having noted that the claim made for deduction under section 80IA of the Act, which was allowed by the Assessing Officer in scrutiny assessment. However, later on the reassessment proceedings were initiated only on account of the addition of explanation. The Court held that it is a settled law that if the explanation is added to a statute for the removal of doubts, the implication is that the law was same from the beginning and the same is further explained by way of addition of the Explanation. Therefore, it is not a case of introduction of new provision of law by retrospective operation, but when all the materials regarding activities of the assessee if are available on record and the benefit of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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