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TMI Blog2018 (2) TMI 1635X X X X Extracts X X X X X X X X Extracts X X X X ..... material available on assessment record is nothing but based on change of opinion. The reopening is not sustainable when the proceedings u/s 154 were pending on the same issue. Accordingly, we set aside the initiation of proceeding u/s 147/148 and consequential reassessment order. As we have set aside the initiation of proceeding u/s 147/148 and consequential reassessment order, therefore, the other grounds raised on the merits becomes infructuous. Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... units. The assessee again raised the objections against the notice issued u/s 148 but the AO did not accept the objection of the assessee and passed the reassessment order u/s 143(3) r.w.s. 147 on 09.01.2014. The assessee challenged the validity of reopening of the AO before the ld. CIT(A) but could not succeed. 3. Before us, ld. AR of the assessee has submitted that the assessee vide its letter dated 17.09.2013 explained that in the course of assessment proceedings complete details of working of deduction u/s 80IA along with the audit certificate were filed. In these details the loss in respect of two units was separately reflected and the assessee even has not claimed deduction u/s 80IA of ₹ 3,01,41,548/- in respect of 7 units though there is no withdrawal of notification. Thus, ld. AR has submitted that the assessee pointed out that even when the earlier loss of Rs. ₹ 1,36,34,565/- in respect of two units is set off against the profits of these two units in this year, the eligible deduction would be ₹ 96.76 Crores as against ₹ 95.12 Crores allowed by the AO. Hence, the assessee contended that there is no escapement so as to warrant issue notice u/s 148 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imitation of scope of section u/s 154 of the Act, therefore, the AO dropped the proceeding u/s 154 and initiated the appropriate proceeding u/s 148 of the Act. He has further submitted that there is no dispute that in computation of deduction u/s 80IA of the Act the assessee did not adjust the earlier year loss of ₹ 1,36,34,565/- in respect of two units and therefore it was detected by the AO after completion u/s 143(3) of the Act. The New fact came to the knowledge of the AO are sufficient to form the belief that income assessable to tax has escaped assessment to the extent of loss of Rs. ₹ 1,36,34,565/- was not adjusted against the profit before claiming the deduction u/s 80IA of the Act. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as relevant material on record. The scrutiny assessment u/s 143(3) was completed on 22.12.2010 whereby the AO accepted the claim of deduction u/s 80IA of ₹ 95,11,66,038/-. Thereafter, the AO issued a notice u/s 154/155 of the Act dated 8.06.2012 to rectify the mistake of not adjusting the loss of the previous year of Rs. ₹ 1,36,34,565/- in respect of two units whil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 154/155." Thus, the assessee clearly explained that the profit of the assessee eligible deduction u/s 80IA is ₹ 96,76,73,021/- even after the adjustment of the said loss of ₹ 1,36,34,564/-. Hence, the deduction allowed in the assessment order of ₹ 95,11,66,037/- is not a mistake as stated in the notice u/s 154 of the Act. The AO then issued notice u/s 148 of the Act on 21.11.2012 by recording the reasons as under:- " Reasons for initiating proceedings u/s147 and issue of notice u/s 148 of the I.T. Act, 1961 in the case of M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur (PAN No. AABCR4695 A.Y. 2008-09. The assessment in case was completed u/s 143(3) on 22.12.2010. Later it has been noticed that the assessee has worked out Deduction u/s 80IA in respect of various eligible projects at ₹ 98,13,07,575/-. However, it has claimed the deduction at ₹ 95,11,66,028/- anticipating that deduction allowed in earlier years to certain units may be withdrawn (though not withdrawn till date). While calculating the deduction u/s 80IA the assessee has not considered the loss in respect oftwo units viz. Sitapura EPIP-I at SEZ Boranad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and income tax debited in respect of Section 115 JB assessment and on the regular assessment under Section 143(3) in respect of the alleged mistake in granting deduction under Section 80 IB, for income tax and wealth tax debited in the profit and loss account and the share issue expenses and FRN issue expenses written off to be disallowed, being capital in nature. 29. A reading of the notice under Section 154 of the Act and the reassessment notice dated 11th May 2009 shows that there is absolutely no material difference on the issues sought to be considered under these notices, except the fact that while in the proceedings under Section 154, the notice is based on the view that there was a mistake apparent on the face of the record warranting a rectification, the proceedings under Section 147 alleged that by reason of the untrue and incorrect particulars given by the assessee, there had been an escapement of tax. Given the fact that the area of operation of both these provisions are on totally different fields, the simultaneous assumption of jurisdiction under Sections 154 and 147 on the self same issue, plainly shows the contradiction in the reasoning of the second responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er extra material or information was in possession of the Assessing Officer. It is true that the assessee filed the return of income in response to the notice issued by the Assessing Officer under section 148 of the Act showing the rental income as an income from house property, but the assessee has every right to challenge proceeding initiated by the Assessing Officer under section 147 of the Act. Now it is well-settled principle by different judicial pronouncements that there cannot be any 'estoppel' against the statutory provisions. Admittedly, in this case, the mandate of section 147 is not fulfilled for the reasons that the Assessing Officer himself was not sure whether the issue in controversy could be the subject-matter of section 154 or the same can be the subject-matter of proceedings under section 147. Ld. D.R. placed his heavy reliance in the case of Damodar H. Shah(supra). In the said case the Hon'ble High Court has explained in details the difference between section 154 viz-a-viz section 147. As per said decision there is no bar to evoke section 147 but Assessing Officer has to demonstrate why he was required to do so. Nothing has been demonstrated by Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t due to any obvious mistake, borne out from existing records. 44. The judgment in GKN Driveshafts (India) Ltd. v. ITO reported in [2003] 259 ITR 19, cited by Mr. Bhowmik was rendered by the Supreme Court in the particular facts of that case. The Supreme Court held (page 20) : "We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under section 148 of the Income-tax Act is issued, the proper course of action for the noticee is to file a return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons) the noticee is entitled to file objections to issuance of notice and the Assessing Officer is bound to dispose of the same by passing a speaking order. In the instant case, as the reasons have been disclosed in these proceedings, the Assessing Officer has to dispose of the objections, if filed, by passing a speaking order, before proceeding with the assessment in respect of the abovesaid five assessment years." 45. The condition precedent for initiation of reassessment proceedings is, in any case, the formation of the be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficiency of the reasons in exercise of its extraordinary writ jurisdiction under article 226 of the Constitution of India. 51. The court may, however, in exercise of its power of judicial review examine whether the conditions precedent for exercise of jurisdiction to reopen assessment at all exist. In the absence of any new and/or fresh materials, on the basis of which the Assessing Officer could have formed the opinion that income has escaped assessment, the Assessing Officer lacked jurisdiction to reopen assessment. 52. The reassessment notice has been issued for virtually the same reasons for which rectification proceedings had earlier been initiated but dropped. The Assessing Officer has not disclosed any new materials for reopening assessment. Assessment cannot be reopened merely on change of opinion, as has apparently been done in this case. The Assessing Officer on being satisfied that there was no apparent error in computation of income, on the basis of existing records, dropped the rectification proceedings. In the absence of any new and/or fresh materials and in the absence of any reason for formation of belief that even otherwise, income had escaped assessment eve ..... X X X X Extracts X X X X X X X X Extracts X X X X
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