9911796707
TMI Blog2016 (10) TMI 95X X X X Extracts X X X X X X X X Extracts X X X X ..... t has already been explained by the petitioner vide communication dated 30.11.2006, precisely in para 2 of the said communication, and therefore, this issue is already been a part of the record and therefore, the conditions which are laid down in section 80IB appears to have not been violated in terms of aforesaid explanation. Learned counsel for the petitioner has submitted that on earlier occasion as well as in subsequent years, the exemption has been permitted and therefore, it is not open for the respondent authority can't make attempt to deprive the said exemption benefit in the mids of the year which has already been considered and granted, under the guise of reopening. Thus clear from the record that on prior period to 2005-06, the benefit of section 80IB was already granted to the petitioner unit and after the year 2005-06 also, the said benefit has been granted and recognized and therefore, learned counsel rightly pointed out that it is not open for the authority to pick up in between period and to disturb the benefit which has already been considered and for that purpose relying upon the decision in case of Saurashtra Cement & Chemical Industries Ltd. v. Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by submitting reply on 26.05.2008. It was after considering the said reply, the authority has passed an order of assessment under section 143(3) on 24.11.2008, by virtue of which, the claim of the petitioner company for seeking deduction under section 80IB was allowed. Subsequent to the same, the respondent authority has issued the impugned notice under section 148 of the Income Tax Act on 04.03.2011 for the purpose of reopening assessment for the assessment year 2006-07. On receipt of the said notice, the petitioner company has demanded the reasons for the same, which came to be supplied vide letter dated 04.03.2011 and the main reason which has been assigned for reopening is that assessment is proposed to be reopened as the period of ten years is lapsed from the date of establishment of petitioner company and therefore, according to respondent authority, the petitioner company is not entitled to claim any deduction after the lapse of 10 years under section 80IB of the Act. Pursuant to the reasons which have been received by the petitioner under a letter dated 09.07.2011, the petitioner company raised objections and requested the authority to drop the reassessment proceedings, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not valid reason to permit the reassessment and therefore, the notice which has been issued, be quashed and set aside. It was also contended by the counsel that the business unit of single piece of foldable lens manufacturing was set up in the year 2001-02 and there is no failure on the part of the assessee in disclosing fully and truly all material facts for framing the assessment and therefore, in absence of any such allegation remotely not being reflected in the reasons for reopening the impugned notice would required to be quashed and set aside. Learned counsel has drawn the attention to one of the decisions delivered by Full Bench of Delhi High Court Commissioner of IncomeTax Vs. Kelvinator Of India Limited reported in 320 ITR 561 and contended that on the basis of mere change of opinion, the notice the impermissible to be issued under section 148. While contending this, the learned counsel for the petitioner has taken us through various documents attached to the petition to justify the claim sought for under section 80IB. The learned counsel has drawn the attention of the Court to a communication dated 15.05.2008, wherein, in clause No.2 a specific query came to be raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment. 5. It was also further contended that the scrutiny assessment has already taken place with respect to assessment year 2006-07 and in assessment proceedings also, the chartered accountant appointed by the petitioner has represented the petitioner company and produced all relevant material and after considering those relevant materials, the claim of deduction made available to the petitioner. A reference is made by the counsel to the last portion of said scrutiny assessment order dated 24.11.2008, wherein, under the head of deduction under chapter6A, item No.II which is dealing with the said claim and therefore, the counsel has submitted that this scrutiny assessment with respect to this has already been undertaken. It was specifically reiterated by the counsel for the petitioner that the assessee has not claimed deduction under section 80IB of the Act for unit which is already established in accounting year 1995-96 and the claim which has been made and allowed in scrutiny assessment was with respect to a new undertaking which has been established in year 2001-02 and therefore, the counsel has submitted that still the period of 10 years has not lapsed and therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rfere in the order of Ld. Commissioner of Income Tax (Appeals) because the Ld. D.R. of the revenue could not show that such relief was not allowed by the A.O. in earlier years or to show that such relief although allowed but was subsequently withdrawn. Regarding this contention of the Ld. D.R. that no evidence was furnished by the assessee before the A.O. In respect of putting up of new unit in assessment year 2001-02, we find that as per the assessment order passed by the A.O. u/s 143(3) for the assessment year 2004-05 and assessment year 2006-07, deduction was allowed by the A.O. to the assessee u/s 80IB. The A.O. himself has stated in the assessment order that for the unit established by the assessee in assessment year 1994-95, assessee was getting deduction u/s 801A up to assessment year 2004-05. If this be so, then for new unit only, deduction was allowed by the A.O. u/s 80IB in assessment year 2006-07. This goes to show that this fact was very much available in the record of the department that the assessee has established a new unit in assessment year 2001-02 and in respect of this unit, deduction was allowed by the A.O. to the assessee u/s 80IB in assessment year 2006-07 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed and examined in scrutiny assessment, it is not open for the petitioner to justifiably claim the benefit under section 80IB and therefore, learned counsel submitted that in the background of this fact, no relief be granted. 8. Learned counsel for the Revenue has further submitted that condition precedent which is engrafted in section 80IB has not been fulfilled by the assessee, hence it is not open for the petitioner company to claim any deduction. It was also submitted that the industrial undertaking is considered to be small scale industrial undertaking its investment in fixed assets and plant and machinery were held on ownership terms or on lease or on higher purchase does not exceed ₹ 1 crores. However, this stipulation is not being fulfilled by the petitioner assessee, the claim of deduction under section 80IB is not permissible. Learned counsel for the Revenue has further contended that the petitioner having no separate registration certificate as SSI unit as a new undertaking, the same having not been produced the claim was not accepted in past, for assessment year 2005-06. By contending this, in summary, learned counsel for the Revenue submitted that all these ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said deduction would be available for 10 consecutive assessment years, and the period of 10 years lapsed on 2004-05 and therefore, the department proceeded with the claim of deduction as sought after completion of stipulated period of 10 years and it is in this solitary ground, it appears that action for reopening of assessment have been initiated. 12. In the backdrop of these reasons, if we examine the stand of the petitioner with respect to its set up and commencement of manufacturing process, the documents attached to the petition compilation reveal that with respect to single piece and foldable lens manufacturing, the eligible business set up in the assessment year 2001-02, and therefore, the tenure of 10 years to be commenced for the purpose of eligibility from 2001 onwards and therefore there appears to be justification in stand of the petitioner which is further elaborated with cogent material to be dealt with hereunder. 13. It is also emerging from the record as stated above that the issue with respect to establishment of a unit in the year 2001-02, is already appearing to have been explained during the course of assessment proceedings and for the subsequent years i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f section 80IB was already granted to the petitioner unit and after the year 2005-06 also, the said benefit has been granted and recognized and therefore, learned counsel rightly pointed out that it is not open for the authority to pick up in between period and to disturb the benefit which has already been considered and for that purpose relying upon the decision in case of Saurashtra Cement Chemical Industries Ltd. v. Commissioner of IncomeTax GujaratV, reported in [1980] 123 ITR 669. It appears that since the authority cannot take up an in between period to deny the benefit, the reopening for period for which has been granted is not permissible. 16. From the aforesaid position prevailing on record, it appears that the reasons which have been recorded are not correctly recorded and on the contrary, the authority has erroneously assumed that the unit has already been set up in 199495 and since period of 10 years is over, the claim is incorrectly made. This exfacie appearing to be not correct and therefore, based upon such kind of reason, it is not open for the authority to reopen the assessment. 17. It is also prevailing on record that with respect to these years, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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