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TMI Blog2025 (1) TMI 286X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. - M.S. KARNIK AND VALMIKI MENEZES, JJ. For the Petitioner: Mr Percy Pardiwala, Senior Advocate with Mr Pranav Kakodkar, Advocate. For the Respondent Nos. 1 and 2: Ms Susan Linhares, Standing Counsel with Ms Epsy Fernandes, Advocate. JUDGMENT: (PER M.S. KARNIK, J.) Both petitions are decided by a common judgment. Writ Petition No. 198/2016 relates to a notice dated 30.09.2014 issued under Section 148 of the Income Tax Act, 1961 for the Assessment Year 2010-11 by respondent no. 1. Writ Petition No. 199/2016 relates to the Assessment Year 2011-12. 2. By these petitions under Article 226 of the Constitution of India, the petitioner Vedanta Ltd. (formerly known as Sesa Sterlite Limited/Sesa Goa Limited) prays for the following reliefs: (a) this Hon'ble Court may be pleased to issue a Writ of Certiorari or a writ in the nature of Certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India calling for the records of the Petitioner's case and after examining the legality and validity thereof quash and set aside the notice dated 30th September 2014 issued by Respondent No. 1 under section 148 of the Act to reopen the assessment f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s being the Codli (600 TPH) unit, the Amona unit and the Chitradurga unit. A separate computation of deduction under Section 10B of the Act in respect of each of the three units was attached to the computation. In addition, an audit report in Form 56G in respect of each of the units confirming that the deduction under Section 10B of the Act had been correctly computed was also annexed to the return. 5. Pursuant to a query raised by respondent no. 1 in respect of Assessment Year 2009-10, the petitioner addressed the letter dated 22.11.2011 by which it provided a detailed explanation why the activity carried on by it in each of the said three units constituted manufacture/production of an article or thing and why each of the said three units was eligible to claim deduction under Section 10B of the Act. The petitioner addressed another letter dated 07.12.2011 for Assessment Year 2009-10 in which it provided respondent no. 1 with further details and information relating to the computation of deduction under Section 10B of the Act in respect of the said three units. 6. In relation to the petitioner's claim under Section 10B, respondent no. 1 conducted a survey under Section 133A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned assessment year, the petitioner relied on the conclusions arrived by the Tribunal. 10. During the pendency of the appeal before the CIT(A), the respondent no. 1 wrote a letter dated 17.07.2014 informing that a survey under Section 133A was conducted on the petitioner on 20.03.2014 wherein new evidence has been found showing that the petitioner's claim was not correct and taking into consideration the new evidence, the claim under Section 10B be disallowed. Since the survey under Section 133A was instituted by respondent no. 1 after passing the impugned assessment order on 11.01.2013, the CIT(A) did not consider the submission made by respondent no. 1. 11. The CIT(A) passed an order dated 11.12.2014 by which he accepted the petitioner's claim for deduction under Section 10B of the Act with regard to the said three units. The CIT(A) also held that the activity carried out at Amona, Chitradurga and Codli did amount to manufacture or production. He held that there was no reconstruction of the existing units and the claims pertained to the new units. He relied on the various decisions cited by the Income Tax Appellate Tribunal before concluding that the activity carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Supreme Court in the case of Chowgule Co.P.Ltd. V/s. Union of India and Ors, 1981 AIR (SC) 1014 and the decision of this Court in CIT V/s. Sesa Goa Ltd. (2004) 266 ITR 126? (C) Respondent no. 1 filed a second Miscellaneous Application bearing MA No.30/PNJ/2014 dated 21.08.2014 in which he alleged that there was a suppression of material facts by the petitioner which was noticed during the course of survey/post-survey enquiries in respect of setting of the EOU units. (D) Various allegations were made by respondent no. 1 on the basis of such material to demonstrate that Amona unit is an amalgamated / reconstructed unit from the existing two dry plants and one wet plant for beneficiation. New materials were also sought to be placed with respect to Chitradurga unit. The Tribunal was requested to consider the additional evidence produced by respondent no. 1 to rectify its order suitably. The petitioner filed detailed written submissions before the Tribunal dealing with the allegations raised by respondent no. 1. (E) The said Miscellaneous Application was dismissed by the Tribunal vide its order dated 07.01.2015. The Tribunal held that the decision in the order dated 08.03.2013, that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made thereunder in consonance with the constitutional provisions. Subsequent thereto some Writ Petitions are filed which may not be relevant to a decision in this case. (H) Respondent No. 2 - The Commissioner of Income-tax after receipt of the order dated 08.03.2013 of the Tribunal for the Assessment Year 2009-10 filed an appeal under Section 260A of the Act being Tax Appeal Nos.13 and 14 of 2013 in this Court in which the finding of fact of the Tribunal that the said three units are new units was challenged. This Court admitted the appeals on 23.09.2013. Respondent no. 1 also took recourse to filing Miscellaneous Applications before the Tribunal for the Assessment Year 2009-10 reiterating the submission that the petitioner is not entitled to deduction under Section 10B of the Act in respect of the profits from 100% EOUS. 15. Then the decisions of this Court which have a bearing on the issues involved in the present petition need to be noticed, which are as follows: (i) WP No. 102/2016 and other connected matters dated 09.07.2019 in the case of Shantadurga Transport Company Pvt. Ltd. V/s. ACIT Anr., (ii) WP No. 233/2015 and 883/2016 dated 19.01.2024 in the case of Sociedade de Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year). 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 the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to 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: Provided further that nothing contained in the first proviso shall apply in a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year: Provided also that the Assessing Officer may assess or reassess such income, other than ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CIT(A) had passed an order under Section 263 revising the assessment originally framed and directing the Assessing Officer to consider the report filed by the SFIO and submissions of the petitioner thereon. Thereafter, the Assessing Officer has passed an order under Section 143(3) on 20.03.2013 accepting that having regard to the supplementary report furnished by SFIO there was no basis in the allegation that the petitioner was under invoicing its exports. The Assessing Officer has also found that the petitioner has not under invoiced its exports on the basis of the allegations made in the Shah Commission report. This circumstance also is not in support of the Revenue. 21. As indicated in the earlier part of this judgment, pursuant to the passing of the assessment order by respondent no. 1 on 11.01.2013, the appeal filed by the petitioner before the CIT(A) was allowed. The CIT(A) vide its order dated 11.12.2014 accepted the petitioner's claim for deduction under Section 10B of the Act with regard to the said three units. Against the order of CIT(A), respondent no. 1 filed an appeal before the Tribunal as the claim under Section 10B was accepted by CIT(A). The Tribunal passe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as before the Tribunal was whether the petitioner was entitled to a deduction under Section 10B as claimed. 36. The question whether the petitioner can claim deduction under Section 10B was decided by the Tribunal. The tax appeal of the Revenue was pending in this Court. The Assessing Officer as well as the CIT(A) had already taken a view that the petitioner is not entitled to deduction under Section 10B. During the pendency of the tax appeal before this Court, a fresh survey was conducted and on the basis of the materials which were found during the survey in 2014. The re-assessment is sought to be justified for the purpose of denying the claim of the petitioner for deduction under Section 10B. Thus, the reasons of the Assessing Officer in support of his finding may be several but what is relevant is the subject matter of the tax appeal. It is here that according to us the third proviso to Section 147 will spring into effect. The third proviso says that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. 37. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x appeal filed by the Revenue is that the assessee's claim for deduction under Section 10B has been upheld. According to us, in such a situation, if the reassessment proceedings are allowed to continue, the same would virtually amount to having an effect of sitting in appeal over the orders passed by this Court as well as the Tribunal. This cannot be countenanced. Though it is the allegation that fresh evidence was unearthed during the course of fresh survey in March 2014, it indicates that the new units were in fact not new units but an amalgamation of the existing units. The exercise really is to rely on these materials in support of the findings earlier recorded by the Assessing Officer which was already subject matter of challenge before the competent forum. 39. In Poonam Builders V/s. ACIT 162 Taxmann 238, the assessee therein had claimed a deduction under Section 80IB (10) which was denied to it in the course of an assessment framed under Section 153A read with 153C of the Act. This denial was challenged by the assessee therein before the CIT(A) on two grounds, viz., that such denial could not be done in the course of an assessment framed under section 153A read with sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Chitradurga units were not new units. The subject matter of Tax Appeal was the entitlement of the petitioner to a claim for deduction under Section 10B of the profits that are derived from its export oriented undertakings situated at Amona, Chitradurga and Codli. It is this claim which was adjudicated by the appellate authorities in the original assessment proceedings. Respondent no. 1 wants to reassess this claim by relying on certain additional evidence found in the course of the survey which according to him supports its case that the deduction under Section 10B could not be allowed. According to us, such a course of action cannot be countenanced as it would be in the teeth of the third proviso to Section 147. 41. For the reasons stated above, in our opinion, respondent no. 1 has acted wholly without jurisdiction when he has sought to assume jurisdiction to reassess the petitioner's income so as to once again disallow a claim for deduction under Section 10B. 23. In the present case, we find that the claim under Section 10B was restored to the file of the CIT(A) by an order of the Tribunal dated 10.09.2015. The CIT(A) was directed to examine the same in the light of the let ..... X X X X Extracts X X X X X X X X Extracts X X X X
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