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TMI Blog2017 (2) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... tial assessment year. This in our view would not be permissible unless the past assessments are also disturbed. Assessing Officers over a period of three years being assessment years 1988-89, 1989-1990 and 1990-1991 have consistently accepted the claim of the assessee for deduction under 80-I of the Act and it would not be open for the Assessing Officer to deny the deduction under Section 80-I of the Act on the ground of non fulfilment of the conditions under 80-I(2) of the Act without disturbing the assessment for the assessment years relevant to the previous year in which the Unit Nos.2 & 3 were established. - AO is directed to allow the claim of the assessee for deduction u/s 80IB - Decided in favour of assessee. - ITA No. 5566/Del/2014 - - - Dated:- 27-2-2017 - Sh. N. K. Saini, Accountant Member Assessee by : Sh. Gautam Jain, CA Sh. P. K. Kamal, Adv. Revenue by : Sh. F. R. Meena, Sr. DR ORDER This is an appeal by the assessee against the order dated 24.07.2014 of ld. CIT(A)-XVI, Delhi. 2. Following grounds have been raised in this appeal: 1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in sustaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red in favour of the assessee vide order dated 13.02.2017 in ITA Nos. 5304 5305/Del/2012 for the assessment years 2007-08 and 2008-09 passed by the ITAT Delhi Bench E , New Delhi in assessee s own case (copy of the said order was furnished). 7. In his rival submissions the ld. DR strongly supported the orders of the authorities below. 8. I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it is noticed that an identical issue was a subject matter of the assessee s appeal in the preceding years i.e. the assessment years 2007-08 2008- 09 in ITA Nos. 5304 5305/Del/2012 wherein vide para nos. 15 to 23 of the order dated 13.02.2017 it has been held as under: 15. Now taking up the basic issue, we notice that in the instant case the edifice of invocation of power u/s 154 is the tax audit report was furnished by the appellant along with the return of income. We also notice from the order of assessment placed on record that claim was allowed specifically by stating that appellant is eligible for deduction of ₹ 38,40,090/- u/s 80IA of the Act. In such circumstances once a tax aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore us. The Tribunal was in no error in holding that the powers under Section 154 could not have been resorted to and to initiate and complete an exercise referred in details by it. In effect the initial order of rectification is sought to be further rectified and which is impermissible. More so when the Revenue did not take the matter further from the initial stage and against the order dated 24.07.2006. If the issue was debatable, then, all the more the Tribunal was right in concluding that in the limited nature of the proceedings the Assessing Officer could not have referred to the legal provisions, initial stand of the Assessee and the judgment or orders of the Tribunal brought to his notice. He was not undertaking a fresh exercise nor was he undertaking an exercise enabling him to resort to any other provisions save and except under Section 154. If that was agreed and undisputed position, then, assuming that anything was debatable that could not have been decided in the limited proceedings. Their nature being understood in the factual backdrop and particularly the orders of the Authorities that we are of the opinion that any larger question or controversy need not be decided. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h does not cover each and every decided issue which may result in possible loss of revenue. In our view, the rectifications made in the impugned order under section 154 fall in the category of review of the order by the Assessing Officer which is not covered under section 154. Consequently, we hold that the impugned order under section 154 does not conform to the provisions in this behalf, i.e., rectification of mistake. Under these circumstances, we have no alternate but to set aside the impugned order passed by the Assessing Officer under section 154 and allow the assessee s claim in this behalf. Since we have held the proceedings under section 154 to be bad in law we do not go into merits. 11. In the result, the assessee s appeal is allowed on the above terms. 18. We thus find considerable cogency in the submission of the assessee s counsel that assessment order passed u/s 143(3) of the Act after considering the relevant material and otherwise also there is no mistake apparent from record which can be rectified u/s 154 of the Act; therefore the notice u/s 154 and order passed are illegal, bad in law and without jurisdiction and grounds raised are allowed. 19. Having re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee under section 80-I of the Act was examined and allowed by the Assessing officer for three years preceding the assessment year 1991-1992. It is relevant to note that assessments in the earlier years i.e. relating to assessment years 1988-89, 1989- 1990 and 1990-1991 has not been disturbed by the Assessing Officer and there has been no change that could justify the Assessing officer adopting a different view in the assessment years 1991-92 and thereafter. As stated hereinbefore, in certain cases where the issues involved have attained finality on account of the subject matter of dispute having been finally adjudicated, the question of reopening and revisiting the same issue again in subsequent years would not arise. This is based on the principle that there should be finality in all legal proceedings. The Supreme Court in the case of Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 had held as under:- .....that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasijudicial controvers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the year in which the new industrial undertaking is established. Although the deduction under Section 80-I of the Act is available for the assessment years succeeding the initial assessment year, the conditions for availing the benefit are inextricably linked with the previous year relevant to the assessment year in which the new undertaking was formed. In such circumstances, it would not be possible for an Assessing Officer to reject the claim of an assessee for deduction under Section 80-I of the Act on the ground that the industrial undertaking in respect of which deduction is claimed did not fulfill the conditions as specified in Section 80-I(2) of the Act, without undermining the basis on which the deduction was granted to the assessee in the initial assessment year. This in our view would not be permissible unless the past assessments are also disturbed. 77. The Assessing Officers over a period of three years being assessment years 1988-89, 1989-1990 and 1990-1991 have consistently accepted the claim of the assessee for deduction under 80-I of the Act and it would not be open for the Assessing Officer to deny the deduction under Section 80-I of the Act on the ground o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Once, this position is accepted and the clock had started running in favour of the assessee, it had to complete the entire period of 10 years and benefit granted in first two years could not have been denied in the subsequent years as the block period was 10 years starting from the Assessment Year 1995-96 to Assessment Year 2004-05. The High Court, however, disallowed the same following the judgment of this Court in the case of Brook Bond India Ltd (supra). In the said case it was held that the expenditure incurred on public issue for the purpose of expansion of the company is a capital expenditure. However, in spite of the argument raised to the effect that the aforesaid judgment was rendered when Section 35D was not on the statute book and this provision had altered the legal position, the High Court still chose to follow the said judgment. It is here where the High Court went wrong as the instant case is to be decided keeping in view the provisions of Section 35D of the Act. In any case, it warrants repetition that in the instant case under the very same provisions benefit is allowed for the first two Assessment Years and, therefore, it could not have been denied in the subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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