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TMI Blog2016 (2) TMI 605X X X X Extracts X X X X X X X X Extracts X X X X ..... e of opinion and failure to disclose all material facts are satisfied in this case to sustain reopening of the assessment for AY 2004-05. So far as the change of opinion is concerned, both the CIT(A) as well as the Tribunal have rendered a finding of fact that there is a change of opinion. It is thus clear that necessary enquiry was made into the profits claimed by the eligible unit for the purpose of benefit under Section 80IA of the Act during regular assessment proceedings. So far as failure to disclose fully and truly all facts are concerned, it is noticed from the reasons recorded that its basis for issuing the reopening notice is the records of the Assessee in possession of the Assessing Officer during regular assessment proceedings. It is noticed from those records that the Assessee had claimed excess profits in respect of its power generating units. The obligation of the Assessee under the Act is only to disclose primary facts necessary for assessment. The application of law and the determination of the market value of the electricity sold by the eligible units under Section 80IA to the other units of the Respondent - Assessee is a subject matter of enquiry by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reopening notice :- Reasons for reopening under section 148 1. Assessee company filed return of income on 01/11/2004 declaring total income of ₹ 898,19,32,151/- under normal provisions of the Income Tax Act 1961 and book profit of ₹ 4264,14,81,346/- u/s 115JB. Order u/s 143(3) was passed on 27/11/2006 assessing the total income of ₹ 16,46,57,20,196/- under normal provisions of the Income Tax Act 1961 and book profit of ₹ 5748,58,77,147/- u/s 115JB. Thereafter order u/s 250 dt. 29/01/2009 was passed to give effect to CIT(A) order dt. 31/10/2008 and total income was revised at ₹ 1060,60,50,316/- under normal provisions of the Income Tax Act 1961 and book profit of ₹ 5428,02,97,561/- u/s 115JB. 2. Sub-section (10) to 80IA provides that where it appears to AI that owing to the close connection between assessee carrying on the eligible business to which this section applies and any other person, or for any other reason, the course of business between them is so arranged that the business transacted between them produces to assessee more than the ordinary profits which might be expected arise in such eligible business, the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,67,64,153 1,06,82,264 38,62,84,451 37,56,02,187 GTG2PG 14,94,89,585 2,39,18,334 18,79,38,426 16,40,20,092 GTGAHD 21,96,29,982 3,51,40,797 14,63,32,788 11,11,91,991 CPP III/IV 40,41,19,289 6,46,59,086 104,30,98,240 97,84,39,154 CPP V 19,45,18,197 3,11,22,912 32,06,25,859 28,95,02,947 CPP VI 21,54,86,481 3,44,77,837 37,98,08,864 34,53,31,027 STG 61,52,73,587 9,84,43,774 46,34,67,685 36,50,23,911 Total 186,52,81,275 29,84,45,004 292,75,56,313 262,91,11,309 This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear. In such a case, the jurisdictional requirements to reopen an assessment are (i) the Assessing Officer must have reason to believe that the income chargeable to tax escaped assessment; (ii) the Assessing Officer in the regular assessment proceedings had not formed an opinion in regard to the issue on which the reopening notice is issued; and (iii) there has been a failure on the part of the Assessee to truly and fully disclose all necessary facts for the assessment. 5. In this case, the CIT (A) as well as the Tribunal have on consideration of the facts arising before them have concluded that none of the three conditions precedent have been satisfied. The reason to believe that income chargeable to tax has escaped assessment on the part of the Assessing Officer is a sine qua non for issue of an reopening assessment under section 148 of the Act as non-satisfaction of reason to believe would by itself make the notice fatal. In such a case, the satisfaction of other conditions would not even require examination. In this case, the Respondent - Assessee had claimed the benefit of deduction under Section 80IA of the Act in respect of its captive power plants which were sup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g a reopening notice. This for the reason he states that otherwise the revenue due to the State would be lost even in case the audit objection is upheld. 8. We are unable to understand how the mandate of the Act requiring the Assessing Officer to have reason to believe that income chargeable to tax has escaped assessment can be ignored on the altar of revenue collection. If such a submission is to be accepted, it would, be the beginning of the end of the Rule of Law. In fact, a Division Bench of this Court in IL FS Investment Managers Ltd. v/s Income Tax Officer, (Bom), reported in 298 ITR 32 has concluded the issue by pointing out that where the Assessing Officer in response to the query from the Revenue audit has opposed the reopening, it cannot be said that the Assessing Officer has formed his opinion that income has escaped assessment for the purpose of the reopening notice. In the above view, the question as framed does not give rise any substantial question of law. 9. In fact, though on the above issue itself, the appeal is not being entertained, it may be pointed out that none of the other two conditions precedent viz. no change of opinion and failure to disclose all ..... X X X X Extracts X X X X X X X X Extracts X X X X
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