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TMI Blog2024 (5) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... consequent to the search under Section 132 of the Act an order dated 20th October, 2010 was passed under Section 153A/C of the Act denying deduction under Section 80IB of the Act. However in appeal the same was set aside by the order dated 30th March, 2015 by the CIT(A). Therefore the basis of the impugned reopening notice is the very issue which was subject matter of appeal which led to the order dated 30th March, 2015 of CIT(A). In the above view, prima facie the impugned notice is hit by the 3rd proviso to Section 147 of the Act. 5. Therefore interim relief in terms of prayer clause (b). 2. Petitioner is an AOP that carries on business as a builder. During the Financial Year 2007-2008, petitioner completed a project named "Harsh Vihar" at Mira Road, Thane. Petitioner filed return of income on 30th September 2008 for Assessment Year 2008-2009 under Section 139(1) of the Income Tax Act, 1961 (the Act). In the return, petitioner had claimed deduction under Section 80-IB(10) of the Income Tax Act, 1961 (the Act) of Rs. 4,47,30,649/- with regard to the residential project developed during the year under consideration. 3. Respondent no. 1 issued a notice dated 2nd August 2010 unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0) amounting to Rs. 4,47,30,649/- on the following reasons. That the project is not as approved project in the hands of the assessee because the commencement certificate is not issued to Mr. Harshad Doshi nor his AOP Poonam Builders. Secondly the first approved plan is dated 27.11.1997 which is before 1.10.1998. Thus by no means, the assessee is eligible to claim the benefit of deduction u/s. 80IB (10). In appeal, the assessee has raised ground that assessment order passed u/s. 153A/C itself is bad in law because the assessee was never subjected to search and no material belonging to the assessee was ever seized. The CIT(A), vide appeal No. CIT(A)-50/IT-139/2010-11 dated 30.03.2015 has allowed the appeal of the assessee. In view of the above, it is evident that the assessee has made wrong claim u/s. 80IB (10) amounting to Rs. 4.47,30,649/- and deduction in WIP amounting to Rs. 3,94,572/-. Therefore, the undersigned has reasons to believe that income chargeable to tax has escaped the assessment by the reason of the failure on the part of the assessee, within the meaning of section 147 of the Act. Therefore, it is a fit case for issue of notice u/s. 148 of the Act for the A.Y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approved project in terms of Income tax Act which may be termed as "an approved project". 4. On the facts and in the circumstances of the case, the learned Assessing Officer erred in concluding that the commencement certificate is not in the name of the appellant. 5. On the facts and in the circumstances of the case, the learned Assessing Officer erred in concluding that the project was not commenced by the appellant within the prescribed time as laid down under the Income Tax Act. 6. On the facts and in the circumstances of the case, the learned Assessing Officer erred in levying interest u/s. 234B and 234C. 10. Mr. Dada, therefore, submitted that since the claim of deduction under Section 80-IB(10) of the Act of Rs. 4,47,30,649/- was the subject matter of appeal, reopening was barred on that claim of deduction. Mr. Dada further submitted that it is immaterial that the CIT(A) may not have given a finding on merits because the proviso does not say "should have been a subject matter of any appeal and decision thereon should have been given". The proviso only says which was "a subject matter of an appeal" and it was restricted to that because an assessee cannot control or dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Commissioner. Therefore, the intention of the legislation seems to be that in case of search only the pending assessment/reassessment proceedings shall abate and the AO would assume the jurisdiction to assess or reassess the 'total income' for the entire six years period/block assessment period. The intention does not seem to be to re-open the completed/unabated assessments, unless any incriminating material is found with respect to concerned assessment year falling within last six years preceding the search. Therefore, on true interpretation of Section 153A of the Act, 1961, in case of a search under Section 132 or requisition under Section 132A and during the search any incriminating material is found, even in case of unabated/completed assessment, the AO would have the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material collected during the search and other material which would include income declared in the returns, if any, furnished by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the case of Saumya Construction (supra) and the decisions of the other High Courts taking the view that no addition can be made in respect of the completed assessments in absence of any incriminating material. 23. In view of the above and for the reasons stated above, it is concluded as under : i) that in case of search under Section 132 or requisition under Section 132A, the AO assumes the jurisdiction for block assessment under section 153A; ii) all pending assessments/reassessments shall stand abated; iii) in case any incriminating material is found/ unearthed, even, in case of unabated/completed assessments, the AO would assume the jurisdiction to assess or reassess the 'total income' taking into consideration the incriminating material unearthed during the search and the other material available with the AO including the income declared in the returns; and iv) in case no incriminating material is unearthed during the search, the AO cannot assess or reassess taking into consideration the other material in respect of completed assessments/unabated assessments. Meaning thereby, in respect of completed/unabated assessments, no addition can be made by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 above, indicate that this was subject matter of the appeal. The grounds, as recorded in the order dated 30th March 2015 passed by the CIT(A), read as under : xxxxxxxxxxxxxxxx 2. On the facts and in the circumstances of the case, the learned Assessing Officer erred in disallowing the claim of deduction u/s. 80-IB(10) of the Income Tax Act, 1961 of Rs. 4,47,30,649/- although all the prescribed conditions as laid down in the Income Tax Act, were fulfilled. 3. On the facts and in the circumstances of the case, the learned Assessing Officer erred in holding that the appellant has not commenced a legally approved project in terms of Income tax Act which may be termed as "an approved project". 4. On the facts and in the circumstances of the case, the learned Assessing Officer erred in concluding that the commencement certificate is not in the name of the appellant. 5. On the facts and in the circumstances of the case, the learned Assessing Officer erred in concluding that the project was not commenced by the appellant within the prescribed time as laid down under the Income Tax Act. 13. Therefore, the escapement of income due to claim of deduction under Section 80IB (10) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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