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TMI Blog2014 (7) TMI 345X X X X Extracts X X X X X X X X Extracts X X X X ..... rse of assessment proceedings - the first ground of reopening, interest from the trade debtors would be qualified for deduction u/s 80IA only on the furnishing of separate reports cannot be upheld - once the notice for reopening is issued and is allowed to be proceeded, the AO can also open other issues, other than those for which the reasons have been recorded and, therefore also, ordinarily in a writ petition, the Court would be slow in interfering with such notices - for assuming jurisdiction u/s 147 of the Act what is essential is a valid reopening of a previously closed assessment and If the very foundation of the reopening is knocked out, any further proceeding in respect to such assessment naturally would not survive. As both the grounds in respect of which the notice has been issued fall and both these reasons recorded in the reopening of the assessment - the AO would not be in a position to make any additions on some other grounds which never formed part of the reasons recorded by him - a valid reopening of previously closed assessment is a must for assuming jurisdiction u/s 147 of the Act - When the very foundation of such reassessment are both the reasons recorded and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .240 of 2002 dated 06/09/2002 whereby it is stated that in exercise of power conferred by section 295 read with sub section 7 of section 80I of the Income Tax Act, amendment is made to income tax rules from 01/04/2002 whereby it is stated that a separate report is to be furnished by each undertaking or enterprise of the assessee claiming deduction. However on verification of the records it is seen that no separate report is furnished for each undertaking of the assessee for claiming deduction. 3. Further it is seen that from the records of the assessee company that the assessee company has received an interest of ₹ 21761.41 lakhs from GEB for late payment of its sale price i.e. interest from trade debtors. Thus, the deduction of ₹ 21761.41 lakhs on interest from trade debtors is not qualified for the deduction u/s 80I-A. 4. In view of the above, I have reason to believe that income to the extent of ₹ 469,73,55,657/- (including ₹ 21761.41 lakhs) has escaped assessment by way of under assessment to that extent within the meaning of section 147 of the Income-tax Act, 196661. 2.6. The objections were raised vide communication dated 13.7.2009 inter-alia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very next day and therefore, the amendment was sought in the petition challenging such order dated 30.12.2009 passed under section 143(3) read with section 147 of the Act. This Court permitted such amendment and also granted the ad interim relief staying implementation and operation of such re-assessment order. 4. The affidavit in reply has been filed by the respondent wherein it is contended inter-alia that statutory alternative remedies are available to the petitioner and as order of reassessment has been passed, the Commissioner of Income-tax (Appeals) could be approached and thereafter, the Tribunal. It is also contended that issuance of impugned noticed for assessment year 2004-2005 was within period of four years from the end of relevant assessment year and, therefore, also the Court ought not to have interfered. 4.1. It is also contended that the petitioner s contention of reopening being invalid on the ground that same was at the instance of Revenue audit wing also has no basis inasmuch as the Assessing Officer on being convinced that income taxable has escaped assessment has given a proposal for initiating action under section 147 and thus he himself had the reason t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as the only objection raised by the audit wing was in respect of interest from the trade debtors as not having been qualified for deduction under section 80IA and directed re-verification of the papers. He further contended that the communication from the audit wing was also received with respect to non filing of separate reports for each undertakings. However, on both the counts, the Assessing Officer himself had formed his belief independently as well and therefore, on that count alone no interference is desirable. 7. Having thus heard both the sides and having considered the material on record at the outset, it needs to be noted that challenge to the notice impugned and subsequently to the order of reassessment, passed consequent upon such issuance of the notice is essentially on two grounds. 8. First ground raised is in respect of requirement of filing separate reports to be submitted by each undertaking of the petitioner. It is to be noted that the fact is not in dispute that the report was in three parts for each of the undertakings of the petitioner. However, at the time of assessment proceedings for each undertaking, a separate report had already been furnished. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustries Ltd. v. Deputy Commissioner of Income-tax (supra) the plea of the department has been rejected holding that interest received from trade debtors towards the late payment of sale price, is required to be excluded from the profit of industrial undertaking as same cannot be said to be derived from industrial undertaking. This issue also stands concluded at the stage of Apex Court and therefore, such ground raised in the reasons recorded also in our opinion if allowed to be proceeded with, cannot be sustained. 14. At this stage, reference is needed of the fact that the petitioner has raised the ground that the notice impugned has been initiated at the behest of audit objections and accordingly has challenged the validity of the same. From the contentions raised in affidavit in reply and the submissions made before us, we are convinced that such challenge on the part of the petitioner deserves not to be sustained, as the Assessing officer appears to have formed his own belief on the basis of reasons while issuing such notice and therefore, it cannot be said that the notice was solely at the behest of audit party. 15. It is a settled position that once the notice for reop ..... X X X X Extracts X X X X X X X X Extracts X X X X
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