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TMI Blog2012 (11) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... 011 - - - Dated:- 9-11-2012 - Shri U.B.S. Bedi, Judicial Member And Shri T.S. Kapoor, Accountant Member Appellant by : Shri Sumant Chadha, Shri Veenu Agarwal Ms. Aakansha Goel. Respondent by : Ms. Shumana Sen, DR. ORDER TS Kapoor, This is an appeal filed by the assessee against the order of Ld CIT(A) dated 24.1.2011. The grounds raised by the assessee are as under:- 1. The Ld CIT(A) has erred both on law as well as on facts and circumstances of the case by not Accepting that the reopening of the assessment is bad in law, made after the expiry of four years and all the conditions as laid down in the proviso to sec. 147 for reopening the assessment are not applicable to the circumstances of the appellant. The notice u/s 148 was issued after the expiry of four years and hence barred by the time limitation as provided in section. The Ld CIT(A) has erred both on law as well as on the facts and circumstances of the case by hooding that the escapement of income is by reason of failure on the part of the assessee to disclose fully and truly all material facts in respect of deduction u/s 80JJAA. 2. Without prejudice to above the Ld CIT(A) has erred b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 08, the assessee was informed that during the previous year 1999-2000 and 2000-01 regular workmen totaling 48 + 5 respectively were employed by it and since the number of regular workmen employed during the previous year was less than 10% of the existing number of 220 workmen, no deduction was allowable in respect of additional wages paid to regular workmen. Therefore, the deduction of ₹ 44,95,566/- wrongly allowed needs to be withdrawn. In response to the above, the assessee company filed its reply on 8.9.208 wherein it explained that deduction claimed u/s 80JJAA of the Act was in accordance with the provisions of the Act and also challenged the reopening of the case u/s 147 of the Act which was after the end of four years from the relevant assessment year. The assessee company also filed an application u/s 144A of the Act and made a request to quash the proceedings against the assessee company being unjustified and bad in the eyes of law. The Assessing Officer, however, completed the re-assessment u/s 147, 143(3) on 29.12.2008 and made an addition on account of disallowance of deduction u/s 80JJAA of the Act. 3. Dissatisfied with the order, the assessee company filed app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in workmen was more than 10% of 220 workmen and accordingly deduction was correctly claimed and allowed by the Assessing Officer in original assessment order. The assessee further submitted before Ld CIT(A) that the purpose of enacting section 80JJAA as given in clause 39 of Finance No.2 Bill of 1998 was to provide an incentive in the form of special deduction against business profits of the company and the provision was intended to encourage employers to further generate more employment opportunities. Thus, if the contention of Department was to be taken as correct then it will defeat the whole purpose of enacting section 80JJAA of the Act. Therefore, it was argued that additional wages paid to workmen employed for less than 300 days in 1999-2000 were eligible for deduction during succeeding year when they completed their 300 days of working. 4. The Ld CIT(A) after going through the submissions of the assessee did not agree with the contentions of the assessee and upheld the reopening of case u/s 147 of the Act and upheld the disallowance made by the Assessing Officer. 5. Aggrieved the assessee filed appeal before this Tribunal. 6. At the outset, the Ld AR submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the assessee s explanation are rejected. On merits, he argued that as on 31.3.2000 there were 220 workmen, five were added in the current year who had completed 300 days of working in the current year and 48 were employed during preceding year who had completed 300 days of working during the year under consideration. He invited our attention to page 12 and invited our attention to clause 39 of Finance No.2 Bill of 1998 wherein the speech of Hon'ble Finance Minister regarding insertion of section 80JJAA was placed. In view of the speech of Hon'ble Finance Minister the Ld AR argued that the legislature had used the word employed during the year and not appointed during the year and in view of that he argued that workmen shall be new regular workmen in the year in which he had completed 300 days of working. He further argued that if the deduction was meant to be allowed only in the year in which workmen had joined the undertaking and worked for at least 300 days in the same year, then for the purpose of deduction u/s 80JJAA, the assessee must appoint the workmen by 4th June of the relevant year because the wages paid to the workmen appointed after 4th June of relevant year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 80JJAA but does not discuss it in the assessment order and at the end allows deduction as claimed by the assessee without raising any query in this regard. It is established law that reopening after four years is legal if the assessee had not provided all material facts along with return of income and or during assessment proceedings. The proviso to section 147 reads as under:- Section 147: Provided that where an assessment under sub section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of relevant assessment year unless any income chargeable to tax has escaped assessment for such assessment year by reasons of the failure on the part of assessee to make a return u/s 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. 10. In the present case, though assessee had furnished audit report in Form No.10DA as required u/s 80JJAA but a perusal of audit report placed at page 37 of paper book would reveal that an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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