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TMI Blog2020 (5) TMI 490X X X X Extracts X X X X X X X X Extracts X X X X ..... rs by the respondent s predecessor. Unable to countenance this stand of the respondent. In any event it would not clothe the Assessing Officer with the power to reopen the completed assessment under Section 148 of the Income Tax Act, 1961 for the purpose of proviso to Section 147 of the Income Tax Act, 1961 if there was truly and fully disclosure for assessment. Central Excise Department has also accepted the fact that the petitioner was engaged in the manufacture of excisable goods which were eligible for exemption under Notification No.56 of 2002-CE dated 14.11.2002 as amended by Notification No.34 of 2008CE dated 10.06.2008. Therefore, a change of opinion based on report of Asst. Commissioner of Income Tax, Circle 1, Jammu under Section 131 of the Income Tax Act, 1961 cannot amount to failure on the part of an assessee to truly and fully disclose information/documents required for the purpose of completing the assessments. Reopening of the assessment to deny the deduction under Section 80IB is therefore without jurisdiction. If in the course of such proceedings the respondent comes to a conclusion that there were other grounds on which assessment can be reopened, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2012 for the Assessment Year 2009-2010. The petitioner replied to the same vide separate letters dated 19.02.2013. 5. By another notice dated 23.01.2014, the respondent further sought few more details regarding the new undertaking from the petitioner for the Assessment Year 2010-2011. The petitioner also replied to the same. Subsequently, respective assessment orders dated 26.02.2013 28.02.2014 were passed. W.P.No.309 of 2016 Assessment Year 2010-2011 6. The respondent has however issued the impugned notice dated 30.03.2016 under Section 148 of the Income Tax Act, 1961 to the petitioner, to re-open the Assessment Year 2010-11. The petitioner replied to the same and asked the respondent for reasons to reopen the assessment vide letter dated 28.04.2015. By a communication dated 07.05.2015, the respondent has given the reasons for re-opening the assessment. The petitioner submitted its objections against the reasons of the re-opening the assessment vide letter dated 21.07.2015. The respondent has thereafter issued the impugned communication dated 14.12.2015. In the impugned communication, the respondent has observed that the Assessing Officer has not examined the is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Year 2010-2011 is little more elaborate. It would suffice to re-produce the following paragraph from the communication dated 07.05.2015:- As per the definition of manufacture u/s. 2(29BA), the transformation in the article should result in different name, character and use. In the present case, mixing of these raw materials does not change the character and the use of the product. Since, even the raw material being various powders (flavours) are commercially saleable and consumable, the utilization and character do not change. 13. A conjoint reading of the two extracted portions give the reason for the exercise undertaken by the respondent. 14. I have heard the learned counsel for the petitioner and the learned standing counsel for the respondent. I have also perused the records and the documents produced before me. 15. The impugned communications dated 28.11.2016 and 14.12.2015 for the respective Assessment Years issued in the light of the decision of the Hon ble Supreme Court in GKN Drive Shafts (India) Ltd Vs. ITO, (2003) 259 ITR 19 are neither an order nor a Show Cause Notice and therefore has given rise to the present Writ Petitions. 16. The petitioner ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3302 10 10 --- Synthetic flavouring essences. Thus, the activity undertaken by the petitioner amounts to manufacture. 21. The above notification exempts a manufacturer engaged in manufacture of goods specified in the 1st and the 2nd schedule to the Central Excise Tariff Act, 1985 other than the goods specified in Annexure I appended to the said notification and cleared from such unit located in the Industrial Growth Centre, Industrial Infrastructure Development Centre, or Export Promotion Industrial Park or Industrial Estate or Industrial Area or Commercial Estate or Scheme Area as specified in Annexure II from excise duty and additional duty of Excise as is equivalent to the amount of duty paid by the manufacturer of the goods, other than the amount of duty paid by utilisation of CENVAT credit under the CENVAT Credit Rules 2002. 22. The above notification contemplates payment of Excise duty on the manufactured goods and refund of such duties other than the amount of duty paid by utilisation of CENVAT credit under the provisions of the CENVAT Credit Rules, 2002. 23. The respondent has reopened the assessment based on a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective assessment orders were passed. In this connection reference may be made to communication of the respondent dated 26.12.2013. In the said letter, the petitioner was specifically asked to explain the process of manufacture in specific and in detail with regard to the flavours produced, essences produced, flavouring essences formulated perfumery compounds and synthetic food colours preparation for claiming the benefit of deduction under Section 80IB of the Income Tax Act, 1961. Details of the plant and machinery installed in Jammu plant along with bills. The Petitioner has furnished all the details. 27. It is only thereafter the assessments were completed for the respective Assessment Years. Therefore, a mere change in opinion of the Assessing Officer subsequent to passing of the assessment orders would be contrary to the law laid down by the Hon ble Supreme Court in CIT Vs. Kelvinator of India Ltd, (2010) 320 ITR 561 and in Income Tax Officer Vs. Techspan India Private Limited, (2018) 6 SCC 685 and in Jeans Knit Private Limited Vs. Deputy Commissioner of Income Tax, (2018) 12 SCC 36. 28. A mere change in opinion of an Assessing Officer does not clothe an Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under Section 139 or in response to a notice issued under sub-section (1) of Section 142 or Section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 35. At the same time, if in the course of such proceedings the respondent comes to a conclusion that there were other grounds on which assessment can be reopened, the respondent can assess or reassess such income in the light of Explanation 3 to Section 147 of the Income Tax Act, 1961. 36. In the light of the above discussion, I direct the petitioner to participate in the proceedings before the respondent. The respondent is however precluded from disturbing the deductions allowed to the petitioner in the respective assessment orders under Section 80IB of the Income Tax Act, 1961. 37. The respondent may however look for such other aspects which may come within the purview of Explanation 3 to Section 147 of the Income Tax Act, 1961 to dema ..... X X X X Extracts X X X X X X X X Extracts X X X X
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