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TMI Blog2023 (8) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... mely for the assessment year 2012-2013, the claim made by the assessee for deduction at 100% was accepted by the assessing officer after conducting a detailed enquiry and examining all the documents which were produced by the assessee. Thus, what the learned tribunal ought to have noted is that whether the assessing officer/PCIT can revisit the claim which was accepted for the assessment year 2012-2013 while completing the assessment for the year 2013-2014 being the second year of substantial expansion. This aspect of the matter has not been dealt with by the tribunal. As long as the benefit granted under Section 80IC for the first year of substantial expansion remains unaltered, the assessing officer would have no jurisdiction to revisit the same issue in the subsequent assessment years. The assessee had filed the copy of Form 10CCB before the PCIT in response to the show cause notice issued under Section 263 of the Act. The tribunal ought to have seen that the PCIT did not advert to any of the documents produced by the assessee and proceeded to hold against the assessee on a totally different ground than on the ground on which the show cause notice under Section 263 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 263 of the Act? iv) Whether the Learned Tribunal was justified in law in ignoring that the order under Section 263 of the Act was passed beyond the scope of the notice under Section 263 of the Act? 2. We have heard Mr. J.P. Khaitan, learned Senior Advocate assisted by Mr. Saurabh Bagaria, Mr. Rites Goel and Mr. Arindam Halder, learned Advocates for the appellant assessee and Mr. Prithu Dudheria, learned Senior Standing Counsel for the respondent revenue. 3. The appellant assessee filed its return for the Assessment Year under consideration, AY 2013-14 on September 28, 2013 declaring total income of Rs. 30,38,300/-. The case was selected for scrutiny and assessment was completed under Section 143(3) of the Act by order dated March 28, 2016 determining the total income of the assessee of Rs. 1,72,45,790/-. The assessee claimed a deduction under Section 80IC of the Act in respect of its Unit IV being the 7th year of such claim and 2nd year from the date when the assessee made substantial expansion. The date of substantial expansion as mentioned in Form 10CCB is November 13, 2012 relevant to the Financial Year 2011-12 and AY 2012-13. The assessee would state ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer had accepted the substantial expansion and completed the assessment under Section 143(3) after giving 100% deduction and the same is not in dispute. The assessee also enclosed the copy of the assessment order for the Year 2012-13. Further, the assessee pointed out that the Assessing officer had also correctly accepted the substantial expansion which had been accepted in the initial order and completed the assessment in the 3rd year of expansion, AY 2014-15, by giving 100% depreciation the copy of the assessment order for the AY 2014-15 was also enclosed along with the reply as well as Form 10CCB for the AY 2014-15. Thus, the assessee contended that the Assessing Officer had rightly given the deduction of 100% not only in the relevant assessment year but also in the initial year and in the subsequent years as it was a case of substantial expansion and prayed for dropping the proceedings initiated under Section 263 of the Act. The PCIT by order dated February 6, 2018 did not agree with the submissions made by the assessee. By holding that the Assessing Officer has not made any enquiry to ascertain the genuineness of the claim of the assessee regarding substantial expansio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order) as on first day of previous year in which substantial expansion took place was shown as Rs. 34,51,527.69/-. The value of increase in the plant and machinery in the year of substantial expansion was mentioned as Rs. 32,55,178.54/-. In Serial No. 30 of the said Form the deduction claimed under Section 80IC was mentioned as Rs. 1,55,71,528.28/-. In Annexure A to the said Form it was mentioned that the claim of deduction under Section 80IC was in Unit IV at 100% being the 6th Year of substantial expansion. The Assessing Officer issued another notice dated March 10, 2015 stating that during the assessment proceedings it was observed that Unit IV was allowed to avail the benefit under Section 80IC as per the Entrepreneur s memorandum Part II dated October 21, 2008 issued by the Member Secretary, Single Window Clearance Agency, Himachal Pradesh wherein the commercial production was taken on record from July 6, 2006. It was further mentioned that in the said notification, the Member Secretary has intimated the assessee that their registration will stand deregistered if they fail to employ at least 70% bonafide Himachalis. Therefore, the Assessing Officer requested the assessee to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir reply dated July 03, 2014 enclosing all relevant documents, thereafter another show cause notice was issued on March 10, 2015 for which the assessee submitted their reply dated March 15, 2015 enclosing all the requisite documents and after thorough enquiry and being satisfied that the claim of deduction was genuine, the assessing officer had granted the benefit of such deduction and the said order has attained finality. 7. It was pointed out by the assessee before the learned tribunal that during the course of the assessment for the year under consideration, A.Y. 2013-2014, the assessing officer will have no power to revisit the genuineness of the claim for the substantial expansion which was already settled in the first year of substantial expansion namely A.Y. 2012-2013. Though such detailed contention was raised by the assessee, we find that the tribunal has not dealt with the same. More importantly, the tribunal has not noted the crucial and important facts that the assessment year under consideration is the second year of substantial expansion and for the first year of substantial expansion namely for the assessment year 2012-2013, the claim made by the assessee for de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 80I of the Act is available to the assessee in respect of the assessment year referred to as the initial assessment year, relevant to the previous year in which the industrial undertaking begins to manufacture or produce articles of things. It was further held that the such deduction is also available for the 7th assessment year immediately succeeding the initial assessment year; when an assessee is held to be eligible for deduction in the initial assessment year, the same cannot be denied in the subsequent assessment years on the ground of ineligibility since the state of facts which enable the assessee to claim to be eligible for deduction under Section 80I of the Act occur in the previous year relevant to the initial assessment year and have to be examined in the initial assessment year. The Hon ble Division Bench took into consideration the decision of the Hon ble Supreme Court in Radhasoami Satsang Saomi Bagh, Agra Versus Commissioner of Income Tax (1992) 193 ITR 321 (SC) wherein it was held that unless there is a material change in justifying the revenue to take a different view the earlier view which has been settled and accepted for several years should n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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