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TMI Blog2015 (11) TMI 1296X X X X Extracts X X X X X X X X Extracts X X X X ..... f the subsequent years, is not correct in examining the eligibility of the assessee again in other subsequent years. Accordingly he held that the action of the AO has to be considered as taken on mere change of opinion only. CIT(A) was justified in holding that the assessing officer has proceeded to examine the eligibility of the assessee to claim deduction u/s 80IB of the Act for the two years under consideration merely on change of opinion. Further, the various judicial decision relied upon by Ld CIT(A) would show that, after having accepted that the assessee is a small scale industry for a good number of earlier years, it is not open for the AO to change his view, that too only for two years under consideration. Accordingly, we uphold the orders passed by Ld CIT(A) for both the years under consideration. - Decided in favour of assessee. - I.T.A. No.1363 /Mum/2012 - - - Dated:- 9-10-2015 - SHRI B.R.BASKARAN, AM AND AMARJIT SINGH, JM For The Appellant : Shri S K Mishra For The Revenue : Shri S C Tiwari ORDER Per B R Baskaran, AM: Both the appeals filed by the revenue are directed against the separate orders passed by Ld CIT(A)-19, Mumbai for assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he two years under consideration only on change of opinion. It was further contended that the assessee continues to be classified as Small Scale Undertaking under the Industries (Development Regulation) Act 1951, which is the requirement prescribed in sec. 80IB(14)(g) of the Act. The Ld CIT(A) noticed that all the details relating to the deduction claimed u/s 80IB was available before the AO in the original assessment proceedings also in both the years. The AO had not brought any fresh material on record. Accordingly he was convinced with the contentions of the assessee that the reopening was done on mere change of opinion. Accordingly the Ld CIT(A) held that the reopening was bad in law in both the years. 5. It is pertinent to note that the assessment for AY 2004-05 was reopened on 24.03.2009 and the assessment for AY 2005-06 was reopened on 01-10-2009, i.e., at a later date. In the reasons recorded for reopening of AY 2005-06, the AO has referred to the audit objection given by revenue audit party in respect of the eligibility of the assessee to claim deduction both u/s 80IB(3)(i) and 80IB(3)(ii) of the Act. Hence, it was contended before Ld CIT(A) that the assessing offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.O. on the eligibility or otherwise of the appellant for the claim of deduction under s.80IB. Thus all the primary facts were disclosed in the return of income as filed. Though it is seen that the notice has been issued before the expiry of four years from the relevant assessment year, the issue raised in this ground is whether the A.O. could be credited with having reason to believe that income had escaped assessment. It has been laid down by the Hon'ble Supreme Court in the case of Kelvinator of India Ltd. (320 ITR 561 Cited above) that reason to believe cannot be equated with change of opinion. Admittedly, in the instant case, between the date of order of assessment sought to be reopened and the date of forming an opinion that income has escaped assessment, nothing new has happened. There has been a fresh application of mind by the A.O. on the existing same set of facts, Thus, it amounts to only a change of opinion. In the case of the Kelvinator of India Ltd it has been held that the A.O. does not have the power to review the details already on record regarding the claim of deduction under s. 80IB. All relevant information was disclosed in the Return filed, accompanied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stries (Development and Regulation) Act, 1951 read as under : 1B(1) The Central Government may, with a view to ascertaining which ancillary and small scale industrial undertaking need supportive measures, exemptions or other favourable treatment under this Act to enable them to maintain their viability and strength so as to be effective in- (a) promoting in a harmonious manner the industrial economy of the country and easing the problem of unemployment, and (b) securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good, specify, having regard to the factors mentioned in sub-section (2), by notified order, the requirements which shall be complied with by an industrial undertaking to enable it to be regarded, for the purposes of this Act, as an ancillary, or a small scale, industrial undertaking and different requirements may be so specified for different or with respect to industrial undertakings engaged in the manufacture or production of different articles: Provided that no industrial undertaking shall be regarded as an ancillary industrial undertaking unless it is, or is proposed to be, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Small Scale. In the said form, it is stated that the date of commencement of production is 14.06.1995. Further, as per records it is evident that the claim for deduction u/s 801A/80IB is being made from the A.Y. 1997-98 and has been given accordingly. The records indicate the first year of the claim is 1997-98, where a claim was made under s. 80IA and was allowed. Thus, from the facts as are available on the records of the A.O. and also based on the materials produced during the course of hearing of the appeal it is seen that the appellant company has been registered as a Small Scale Industrial Undertaking and continue to be so. The records indicate that the registration granted to an appellant company, as a Small Scale Industrial Undertaking has not been cancelled or withdrawn. Hence, it has to be held that once a registration has been granted to an undertaking as an Small Scale Industrial Undertaking, which is at the time of formation of the business of the company, it would continued to be so, notwithstanding the subsequent notifications issued. As stated earlier the claim for deduction as Small Scale Industrial Undertaking stood admitted in the year 1997-98, subsequently, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed in the earlier year and therefore based on the ratio of the decision as cited above it is held that the relief allowed under s. 80IB could not be withdrawn in a subsequent year with reference to the restraints as mentioned in s. 80IB(3)which have to be applied in the initial year. 9. Thus, we notice that the Ld CIT(A) has given clear finding that the assessee is eligible to claim deduction u/s 80IB as per the provisions of sec. 80IB(3)(ii) of the Act. The Ld CIT(A) has further held that the question as to whether the assessee is a Small Scale Undertaking or not has to be examined as per the provisions of Industries (Development and Regulation) Act, 1951. Another important point noted by the Ld CIT(A) is that the assessee had been allowed deduction u/s 80IB of the Act in the years earlier to the two years under consideration, meaning thereby the eligibility of the assessee to claim deduction u/s 80IB of the Act had already been examined in the earlier years. Hence, by placing reliance on some of the judicial decisions, the Ld CIT(A) held that the assessing officer, after having accepted the eligibility of the assessee to claim deduction u/s 80IB of the Act in the earl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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