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TMI Blog2025 (4) TMI 1628X X X X Extracts X X X X X X X X Extracts X X X X ..... t the learned Judge ought not to have allowed the Writ Petitions insofar as the proceedings for re-assessment have been validly initiated in respect of the subject Assessment Years. The necessity for re-assessment arose from the fact that there had been excess deduction claimed by the assessee under Section 80IB of the Act, as well as other issues. 3. The Writ Petitions had been grossly pre-mature insofar as what had been assailed were only notices under Section 148 relating to reassessment and hence, such a challenge ought not to have been entertained. Though the Assessee had preferred to challenge only the Notices, the re-assessments had, in fact, been completed at the time when the writ petitions had been filed. 4. The procedure for re-assessment under the Income Tax Act, has been elucidated by the Supreme Court in the case of GKN Driveshafts (India) Ltd v Income Tax Officer [(2002) 125 Taxman 963 (SC)] to state that upon receipt of a notice, return of income must be filed. The assessee may also seek the reasons based on which the re-assessment had been initiated. 5. Upon receipt of the reasons, which the assessing officer is bound to disclose to the assessee, objections may ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Principal Commissioner of Income Tax v ITC Ltd [(2024) 163 taxmann.com 294 (Calcutta)] 8. T.K.Salim v Union of India [(2024) 163 taxmann.com 385 (Kerala)] 10. The submissions of Mr.Eashwar, learned Senior Counsel appearing for Mr.T.Vasudevan, learned counsel on record for the respondent are to the effect that the impugned proceedings for reassessment are bad in law as being barred by limitation and an attempt to re-visit and review the decisions taken under scrutiny. 11. He relies on the following decisions in support of the assessee. 1. Calcutta Discount Co., Ltd v Income Tax Officer and another [41 ITR 191 (SC)] 2. Income Tax Officer v Lakhmani Mewal Das [103 ITR 437 (SC)] 3. Commissioner of Income Tax v Kelvinator of India Ltd [320 ITR 561 (SC)] 4. Commissioner of Income Tax v Kelvinator of India Ltd [256 ITR 1 (Delhi FB)] 5. Commissioner of Income Tax v M/s. Hyundai Motor India Ltd (Tax Case (Appeal) No.1441 of 2010 dated 06.09.2019 (MHC)) 6. Principal Commissioner of Income Tax, 6 Chennai v Vatsala Santosh Kamat [2018 (4) TMI 1532] 7.Commissioner of Income Tax v Elgi Finance Ltd [286 ITR 675 (Mad)] 8. Berger Paints India Ltd v Assistant Commissioner of I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of objections 16.07.2009 16.07.2009 31.08.2009 Date of rejection of objection 13.10.2009 13.10.2009 13.10.2009 Date of reassessment order 13.10.2009 13.10.2009 13.10.2009 TABLE II Contents Name of the Unit Rakholi Chinchpada, (CCR Refinery), Silvasa, Union Territory of Dadra Nagar Haveli Nature of business Manufacturers of Nonferrous metals Manufacturers of Nonferrous metals Nature of relief sought Deduction u/s. 80 IB of the Income Tax Act, 1961 Deduction u/s. 80 IB of the Income Tax Act, 1961 Date of grant of Licence 18.03.1998 07.06.1996 Commencement of production 22.02.1999 01.04.1998 First year of claim 2000-01 1999-00 15. As far as the question of maintainability is concerned, useful reference may be had to the procedure for re-assessment in the case of GKN Driveshafts (India) Ltd (Foot Note Supra (1)), extracted below: We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under section 148 of the Income Tax Act is issued, the proper course of action for the notice is to file return and if he so desires, to seek reasons for issuing notices. The Assessing Officer i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re as under: i. Assessee has claimed 100% deduction in respect of Rakholi unit of Rs. 13.22 crores and Chinchipada unit of Rs. 404.42 crores and was also allowed whereas the assessee is eligible for 30% deduction only since as per 10CCB filed for AYs 2003-04 in respect or Rakholi Unit, date of commencement of operation is 18.03.1998 (PY 1997-98 and initial year 1998-99 and hence current being 6th year). Similarly, in respect of Chinchipada unit, date of commencement of operation was 07.06.1996 (PY 1996-97 & initial year being 1997-98 and hence current being 7th year). Hence, the assessee is eligible for 30% deduction only. Excess deduction allowed to be brought to tax. ii. In the P & L account for Chinchpada Unit, assessee has credited interest income of Rs. 7,01,50,976/- and miscellaneous income of Rs. 26,43,366/-. Assessee has netted a sum of Rs. 9,34,01,802/- being interest received. Since these incomes do not form part of income from manufacturing unit, these are not eligible for deduction u/s. 80IB. iii. In the P&L account of Rakholi unit assessee has credited interest income of Rs. 6,067/- and miscellaneous income of Rs, 67,87,792/-. Since these incomes do not form part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ods 2002-03, 2003-04 and 2004-05 required to be re-visited under Section 148 of the Act. 19. It is relevant to note the difference in law as far as assessment years 2002-03 and 2003-04 on the one hand, and 2004-05 on the other is concerned. As far as the first two assessment years are concerned, reassessment proceedings have been initiated beyond the period of four years from the end of the relevant assessment year, thus attracting the application of proviso to Section 147 of the Act which we will presently advert to. 20. For assessment year 2004-05, the re-opening is within the period of 4 years from the end of the relevant assessment year. Hence, as far as assessment years 2002-03 and 2003-04 are concerned, an additional condition that is cast upon the revenue is as set out under the proviso to Section 147 requiring that the Department should establish that the assessee has not made a full and true disclosure of all material aspects in its returns of income at the initial stage. It is only upon this burden being discharged that the Department would be in a position to avail the extended period of limitation from 4 to 6 years. 21. In the interests of clarity, we extract below t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e find merit in the contention that it is only when the Licence to Work had been granted, would the assessee proceed to install machinery and thereafter commence manufacture. Hence the date of grant of Licence can never normally be the date of commencement of business. Hence, there is a clear error in the date set out in column 8 of Form 10 CCB where the date of commencement of production has been is shown to be the date on which the Licence to Work had been granted. 25. It is nobody's case that the date stipulated in error was motivated. In fact, had it been the intention of the assessee to suppress information or to obtain a benefit that it was not eligible for, it would have ensured that there was no mismatch between the particulars in columns 8 and 9 of Form 10 CCB as the very next column, i.e., column 9 reveals the initial year of claim as 2000-01. Hence it is evident that the date 18.03.1998 in column 8 was only an error and nothing more. 26. The same error repeats itself as far as the Chinchpada unit is concerned, except that in column 8 in Form 10 CCB relating to Chinchpada unit, the date of commencement of production is shown as 07.06.1996 which is the date on which the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 151,62,40,203 (The deductions under Chapter VI A is restricted to the extent of profits available) NIL 31. The law requires the assessing officer to specifically record in each assessment year, the year for which the claim of the assessee under Section 80IA/IB was being considered. It is in compliance of this, that the assessing officer has been careful and conscious enough to set out the year of claim in the assessment order itself. 32. It is also relevant that those assessment orders, for the previous years, i.e., 2000-01 and 2001-02, remain undisturbed even at this point of time. We, hence, find that the action of the Assessing Officer to have cherry-picked the assessments for assessment years 2002-03, 2003-04 and 2004-05 alone to disturb the sequence of claim as being wholly misconceived and without any basis whatsoever. 33. It is also likely that if Form 10CCB for the previous two assessment years, ie., 2000-01 and 2001-02 were taken up for verification, the same errors that have featured in column 8 of Form 10 CCB would figure in those Forms as well. 34. However, in the assessment years post 2004-05 as well, the admitted position is that the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer under Section 147 and we have found, in the course of our discussion above that the assumption of jurisdiction by the assessing officer is contrary to the provisions of law. 41. As far as the first two years are concerned, the assessing officer has availed the benefit of larger limitation of 6 years which he is not entitled to, since there has been no untrue or incomplete disclosure by the assessee at the first instance. 42. As far as assessment year 2004-05 is concerned, we find that the grant of deduction is based on the records. There is absolutely no material available to indicate that the original order of assessment is liable to be re-opened. 43. In Kelvinator India Ltd. (Foot Note Supra (7)), which is a matter relating to reassessment within 4 years, the Supreme Court has categorically emphasised the difference between proceedings for re-assessment and proceeding for review holding that the department officer has the power only to re-assess and not review on the same facts. 44. In Mangalam Publications (Foot Note Supra (8)), a recent judgment of the Supreme Court, ITC Limited (Foot Note Supra (10)) and T.K.Salim (Foot Note Supra (11)), the Supreme Court, Calcutta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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