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TMI Blog2017 (12) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... sment was completed vide order dated 7.2.2014 wherein the assessee's claim of deduction u/s 80IA of the Act was accepted. Similarly, for assessment year 2012-13 the return of income was filed declaring NIL income and the case was selected for scrutiny through CASS and, thereafter, vide order dated 20.2.2015, the assessment was completed after giving the assessee benefit of deduction u/s 80IA of the Act. 2.1 Subsequently, the Ld. Pr.CIT issued show cause notices u/s 263 of the Act for both the years. It was mentioned in the show cause notices that the orders of the AO were erroneous in so far as they were prejudicial to the interest of the revenue and required to be amended as there was an error apparent from the record within the meaning of section 263 of the Act. The Ld. Pr. CIT in the show cause notices stated that the assessee was not eligible for deduction u/s 80IA (4)(i)(b) as the assessee was working merely as a government contractor on a works contract with HUDA and no development activities were being carried out by the assessee. 2.2 In response to the show cause notices, the assessee submitted before the Ld. Pr. CIT that the assessee was a joint venture between M/s Prati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d which was duly responded to by the assessee in great detail, especially, with respect to the assessee's claim of deduction u/s 80IA and, therefore, the allegation of the Ld. Pr. CIT regarding nonexamination of the eligibility for the claim of deduction by the AO was incorrect. It was also submitted that as far as the eligibility of the assessee was concerned, the assessee has complied with all the requirements of section 80IA. It was submitted that the assessee is engaged in the business of designing, constructing, testing, commissioning, operating and maintenance of water works for HUDA and, thus, is engaged in developing, operating and maintaining new infrastructure facility. It was submitted that the work was done after entering into agreement with the local body, Haryana Urban Development Authority (HUDA), and the return of income was also filed before the due date of filing of return. It was further submitted that merely because the assessee had entered into an agreement with HUDA, it cannot be treated only as a works contractor as the statute specifically required the assessee to enter into agreement with the Central Government, State Government or local authorities. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... highway project, water supply project, port etc. This section further provides that it applies to any enterprise carrying on the business of 1) developing; 2) operating and maintaining; 3) developing, operating and maintaining any infrastructure facility subject to the fulfilment of the conditions that it is owned by a company registered in India or by a consortium of such companies or by authority or a board or a corporation or any other body established or constituted under any Central or State Government or it has entered into an agreement with the Central Government or the State Government or a local authority or any statutory body for developing or operating and maintaining or developing, operating and maintaining a new infrastructure facility as per explanation (d) of section 80IA. A water supply project includes water treatment system, irrigation project, sanitation and sewerage system or solid waste management system. 5.2 It is not in dispute that the AO had made inquiries about the claim of deduction made by the assessee u/s 80IA as the same is evident from the copy of notices wherein the assessee has been required to furnish complete details of deduction u/s 80IA with al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Sunbeam Auto Ltd. reported in 332 ITR 167 (Del.), the Hon'ble Delhi High Court has held as under:- "We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income- tax Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualise a case of substitution of the judgment of the Commissioner for that of the Incometax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualised where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion, that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income- tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be formed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Bombay High Court further held that the conclusion of the Commissioner must be based on material on record and proceedings called for by him and if there are no materials on record on the basis of which it could be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Hon'ble Bombay High Court held that the Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded. As such, action will be against well accepted policy of law that there must be a point of finality in all legal proceedings and that stale issues should not be reactivated beyond a particular stage and further that lapse of time must induce a repose in and set at rest judicial and quasi-judicial controversies, as it must, in other spheres of human activity. 5.7 From the above it is clear that in the ultimate analysis it is a prerequisite that the Commissioner must give reasons to justify the exercise of suo moto revisional powers by him to re-open a concluded assessment. A bare reiteration by him that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a case of substitution of the judgment of the commissioner for that of the Assessing Officer unless the decision is held to be erroneous. Cases may be visualized where the Assessing Officer examines the accounts, makes enquires, applies his mind to the facts and circumstances of the case and determines the income either by making the accounts or by making some estimates himself. The commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer was on lower side and, left to the commissioner, he would have estimated the income at a higher figure that the one determined by the Assessing Officer. That would not vest the Commissioner with the power to reexamine the accounts and determine the income himself at a higher figure. Further in the case of Infosys Technologies V JCIT (Asst) reported in 286 ITR (AT) 211, the Bangalore Bench of the ITAT held that where the A.O has examined and considered and issue, though not mentioned in the assessment order, it cannot be said that the order passed was erroneous. 5.9 Therefore, on the facts of the case as well as in light of the ratio of the various judicial precedents as discussed aforesaid, we are of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered as above, we hold that the assessee having carried out the work of constructing the above mentioned two projects, namely Srisailam Project and Koyana Project, as detailed above, is appropriately a developer of the said two infrastructure facilities, and in turn is entitled, and entitled justifiably, to claim deduction under section 80IA(4)." 5.11 Thus, this decision also supports the case of the assessee as in this order also the ITAT has specifically rejected the contention of the revenue that the assessee is not a developer to the Government of Maharashtra and APSEB. The facts of the case are similar to the facts of the present case and the only difference is that in the present case, the local authority is HUDA. Therefore, it is our considered opinion that the assessment order cannot be held erroneous on this count also because the Ld. Pr.CIT had a different view on this issue. Thus, the said assessment orders are not erroneous even if they might be prejudicial to the interest of the revenue and, therefore, they cannot be made a subject matter of revision u/s 263 of the Act. Under these facts and circumstances we are of the view that the assessment orders in question on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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