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TMI Blog2021 (5) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the entire claim of the assessee for deduction under Section 80IA of the Act along with the reasons for revising the return of income with respect to claim under Section 80IA of the Act was before the Assessing Officer and such claim was also processed. Such being the facts, in our opinion, the notice for reopening issued beyond four year, cannot be sustained - Decided in favour of assessee. - R/SPECIAL CIVIL APPLICATION NO. 18098 of 2019 - - - Dated:- 24-3-2021 - HONOURABLE MR. JUSTICE J.B. PARDIWALA AND HONOURABLE MR. JUSTICE ILESH J. VORA Appearance: MS VAIBHAVI K PARIKH (3238) for the Petitioner(s) No. 1 MRS MAUNA M BHATT (174) for the Respondent(s) No. 1 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. By this writ application under Article 226 of the Constitution of India, the writ applicant (assessee) has prayed for the following reliefs; (A) quash and set aside the impugned notice at Annexure-A to this petition; (B) pending the admission, hearing and final disposal of this petition, to stay the implementation and operation of the notice at Annexure-A to this petition and stay the further proceedings for the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the return of income with respect to the said claim. It was submitted that the writ applicant had claimed deduction of ₹ 3,72,55,271/- under section 80-IA of the Act in the original return of income whereas such deduction was enhanced to ₹ 9,92,13,248/- in the revised return of income. It was stated therein that in view of provisions of section 80-IA of the Act as well as various judicial pronouncements, deduction under section 80-IA of the Act is to be computed on standalone basis for the initial assessment years and subsequent years without setting off brought forward notional business loss / depreciation of years prior to the initial assessment year against the current year's eligible business income. Revised Tax Audit Report in the Form No.3CD as well as revised Form No.10CCB have also been obtained. In view of the same, the return of income was revised and claim of deduction under section 80-IA of the Act was taken at ₹ 9,92,13,248/- as against ₹ 3,72,55,271/- claimed in the original return of income Copy of letter dated 14.11.14 addressed to the Assessing Officer is annexed and marked as Annexure- E . 2.5 The then Assessing Officer, after co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of income without set off of B/F losses/depreciation and enhanced the deduction u/s. 80IA for ₹ 6,19,57,977/-. In view of the provisions of section 80IA the brought forward loss and depreciation in respect of the aforesaid windmill for earlier years (upto A.Y.2010-11) were required to be set off first and the remaining income to be claimed as deduction. Thus after set off of B/F losses/depreciation there was nil income in case of unit at Sr. No.1 to 8 of table above. Therefore, the deduction was only available for units at Sr. No.9 and 10 of table no.1 which works out to ₹ 3,73,55,623/-. By not doing set off of B/f losses/depreciation resulted in excess allowable of deduction and under assessment of income of ₹ 6,18,57,625/-. 3. In view of the above, it is substantiated that during the year under consideration, the assessee has failed in setting off carried forward losses/depreciation before claiming the deductions u/s.80IA of the Act. The deduction u/s 80IA of the Income Tax Act cannot be allowed to the assessee without setting off of the previous losses/depreciation. Therefore, the aforementioned amount of ₹ 6,18,57,625/- has escaped assessment w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... depreciation allowance or any other allowance under this Act has been computed. 7. In such circumstances, referred to above, the writ applicant is here before this Court with the present application. 8. At the time of issuing notice, the following order dated 15.10.2019 was passed by a Coordinate Bench; 1. Mr. Tushar Hemani, Senior Advocate, learned counsel with Ms. Vaibhavi Parikh, learned advocate for the petitioner, invited the attention of the court to the reasons recorded by the Assessing Officer for reopening the assessment, to submit that the same are based upon the material already on record. It was submitted that in this case, the impugned notice under section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) has been issued in relation to the assessment year 201213, which is clearly beyond a period of four years from the end of relevant assessment year and hence, in the absence of any failure on the part of the petitioner to disclose fully and truly all material facts, the assumption of jurisdiction on the part of the Assessing Officer under section 147 of the Act lacks validity. 2. It was further pointed out that in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t records of A.Y.2010-11 and 2011-12 would indicate that the assessee had incurred loss from the operation of the said windmill units. However, while claiming deduction under Section 80IA from the said unit in A.Y.2012-13, i.e, the year declared by the assessee as the initial assessment year for the said deduction, the assessee had not set off brought forward losses/unabsorbed depreciation of the said unit pertaining to A.Y.2010-11 and 2011-12 against the income of A.Y.2012-13 of the said eligible scrutiny. It is submitted that thereby the assessee enhanced the deduction of ₹ 6,18,57,625/- under Section 80IA of the Act. Mr. Bhatt would submit that the same is contrary to the provisions of sub-section (5) of 80-IA of the Act. 11. Mr. Bhatt would submit that in view of the provisions of Section 80IA of the Act, the brought forward loss and depreciation in respect of the windmill for the earlier years, (upto A.Y.2010-11) were required to be set off first and the balance income could have been claimed as deduction by not setting off the brought forward losses/depreciation resulted in excess allowance of deduction and under assessment of income of ₹ 6,18,57,625/-. In such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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