9911796707
TMI Blog2024 (1) TMI 289X X X X Extracts X X X X X X X X Extracts X X X X ..... as examined in the scrutiny proceedings and it was only when the AO was satisfied that the assessment order dated 30.01.2014 was framed. The logical sequitur of this assessment order was that the petitioner obviously had truly and fairly disclosed all material facts. There is not a whisper in the reasons to believe which would point in the direction that the petitioner had failed to disclose truly and fairly all material facts. Since the reassessment proceedings were triggered after four years, the AO ought to have indicated as to what were those material facts which the petitioner had failed to disclose. Thus, the impugned proceedings are flawed on various grounds, i.e., borrowed satisfaction, reasons to believe not adverting to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner had filed its Return of Income (ROI) for the aforementioned AY on 28.09.2011. The ROI was selected for scrutiny and, accordingly, notice was issued under Section 143(2) of the Act. The petitioner was also issued a notice under Section 142(1) of the Act, which was accompanied by a questionnaire. A perusal of the questionnaire shows that a whole host of queries were raised by the AO. 6. The record shows that the petitioner filed a reply to the queries raised, which included its response to the exemption claimed for the period in issue under Section 80-IC of the Act. 6.1 Once the AO was satisfied, an assessment order under Section 143(3) of the Act was framed on 30.01.2014. Via this assessment order, the petitioner s ROI, pegged at R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en otherwise on merits, the deduction under Section 80-IC of the Act was correctly claimed by the petitioner. 10. The objections raised by the petitioner in the commencement of the reassessment proceedings did not find favour with the AO and, accordingly, via order dated 11.10.2018, the objections were rejected. The rejection of the objections impelled the petitioner to approach this court by way of the instant writ petition. 11. Mr Arvind Kumar, learned counsel who appears on behalf of the petitioner, has made the following broad submissions: (i) The reassessment proceedings were triggered after a lapse of four years. Even then, the petitioner had fully and truly disclosed all material facts. The AO had not brought on record any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 14. According to us, what has clearly emerged is that the reassessment proceedings against the petitioner had been triggered based on the audit objections. Therefore, in the fitness of things, it would be proper to set down not only the audit objections but also the response of the concerned AO at the relevant time as to why audit objections were not sustainable: The assessment of M/s Akums Drugs Pharmaceutical s Limited for the assessment year 2011-12 was completed after scrutiny in January 2014 determining an income of Rs. 37,15,44,272/- under normal provisions after allowing the deduction of Rs. 27,67,09,081 under section 80IC. Audit scrutiny revealed that assessee had six units out of which five units were eligible for deduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dit objection raised by audit party is not acceptable and may kindly be dropped. 15. As would be evident from the extracts set forth hereinabove, the deduction claimed by the petitioner amounting to Rs. 7,01,22,868/- was flagged by the auditor as notional losses, which were available for the preceding AYs, i.e., AY 2008-09, AY 2009-10 and AY 2010-11, and were not set-off. 16. According to the auditor, had those notional losses had been set-off, the income for the eligible Unit-III would have been Nil instead of Rs. 7,01,22,868/-, which was claimed as deduction. 17. It is on this basis that the auditor concluded that there was a short levy of tax amounting to Rs. 3,12,12,704/-. It appears that the auditor, perhaps, had missed th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to assessment year 2010-11 under section 80IC. Further it is noticed that notional lossess of Rs. 33,37,06,761/- (Rs. 3,83,58,139/- + 24,73,26,938 and Rs. 4,80,21,684/- pertaining to assessment year 2008-09, 2009-10 and 2010-11 respectively) for Unit-III were available to be set off. After setting off available lossess, income of Unit-III, should have been assessed at Nil, instead of Rs. 7,01,22,868/- for the purposes of claiming deduction under section 80IC. For the purpose of claim of deduction under section 80IC intra head or inter head adjustment are not permissible. The assessee has claimed deduction under Section 80 IC on amount of Rs. 7,01,22,868/- besides permissible deduction to the assessee for other units. On perusal of detail ..... X X X X Extracts X X X X X X X X Extracts X X X X
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