THE DY CIT CIR-4, MUMBAI v. M/S. AKASH LAND DEVELOPERS, MUMBAI

ITA 7351/MUM/2008 | 2002-2003
Pronouncement Date: 29-10-2010 | Result: Dismissed

Appeal Details

RSA Number 735119914 RSA 2008
Assessee PAN AACFA2289B
Bench Mumbai
Appeal Number ITA 7351/MUM/2008
Duration Of Justice 1 year(s) 9 month(s) 28 day(s)
Appellant THE DY CIT CIR-4, MUMBAI
Respondent M/S. AKASH LAND DEVELOPERS, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 29-10-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted A
Tribunal Order Date 29-10-2010
Date Of Final Hearing 22-09-2010
Next Hearing Date 22-09-2010
Assessment Year 2002-2003
Appeal Filed On 31-12-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI R V EASWAR PRESIDENT AND SHRI J SUDHAKAR REDDY ACCOUNTANT MEMBER I T A NO: 7350/MUM/2008 AND 7351/MUM/2008 (ASSESSMENT YEAR: 2001-02 AND 2002-03) DEPUTY COMMISSIONER OF INCOME TAX APPELLANT CIRCLE 4 THANE VS M/S AAKASH LAND DEVELOPERS RESPONDENT TAL. VASAI DIST. THANE 401 303 (PAN: AACFA2289B) I T A NO: 224/MUM/2009 AND 225/MUM/2009 (ASSESSMENT YEAR: 2001-02 AND 2002-03) M/S AAKASH LAND DEVELOPERS APPELLANT TAL. VASAI DIST. THANE 401 303 VS DEPUTY COMMISSIONER OF INCOME TAX RESPONDENT CIRCLE 4 THANE ASSESSEE BY: DR K SHIVARAM & MR AJAY R SINGH RVENUE BY: MRS M KHARE O R D E R R V EASWAR PRESIDENT: THESE ARE CROSS APPEALS RELATING TO THE ASSESSMENT YEARS 2001-02 AND 2002-03. SINCE THEY WERE HEARD TOGETHE R THEY ARE DISPOSED OF BY A COMMON ORDER. 2. THE ASSESSEE IS AN INDIVIDUAL CARRYING ON BUSINE SS AS BUILDER AND DEVELOPER IN THE NAME AND STYLE OF M/S AAKASH LAND DEVELOPERS. 3. ASSESSMENT YEAR 2001-02: - WE MAY TAKE UP THE ASSESSEES APPEAL FIRST FOR DISPOSAL. THE GROUNDS ARE SIX IN NUMBER ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 2 AND THEY ARE DIRECTED BOTH AGAINST THE JURISDICTION OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT 1961 AND THE MERITS OF THE CLAIM MADE UND ER SECTION 80- IB(10) IN RESPECT OF THE PROJECT NAMELY GAGAN VI HAR COMPLEX CONSISTING OF EIGHT BUILDINGS UNDERTAKEN BY THE AS SESSEE. 4. WE MAY FIRST TAKE UP GROUND NO.5 WHICH CHALLENG ES THE JURISDICTION TO REOPEN THE ASSESSMENT. THE ORIGINA L ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED ON 26.03.2004 DE TERMINING THE TOTAL INCOME AT ` NIL AND ACCEPTING THE CLAIM FOR DEDUCTION UNDER SECTION 80-IB(10) IN RESPECT OF THE GAGAN VIHAR HOU SING COMPLEX. THEREAFTER NOTICE WAS ISSUED UNDER SECTION 148 OF THE ACT ON 27.12.2006. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT WERE ENCLOSED ALONG WITH THE NOTICE. THE REASONS COPY OF WHICH ARE GIVEN AT PAGE 15 OF THE PAPER BOOK ARE AS UNDER :- AY 01-02 REASONS FOR THE BELIEF THAT THE INCOME HAS ESCAPED ASSESSM ENT THE ASSESSEE IS A BUILDER & DEVELOPER. IN THE ASSESSMENT PROCEEDINGS FOR THE AY 03-04 U/S 14393) THE AO DID NOT ALLOW THE DEDUCTION U/S 80IB( 10) OF THE IT ACT 1961 CLAIMED BY THE ASSESSEE AS THE ASSESSEE HAD NO T FULFILLED THE CONDITIONS AS LAID DOWN UNDER THE PROV ISIONS OF SECTION 80IB(10). THE ASSESSEE HAD CONSTRUCTED RESIDENTI AL CUM COMMERCIAL COMPLEX VIOLATING ONE OF THE PRE CONDI TION LAID DOWN U/S 80IB(10)(A) OF THE IT ACT 1961. THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A)-II THANE AGAINST THE OR DER U/S 143(3). THE CIT(A) ALLOWED PROPORTIONATE DEDUCTION U/S 80IB(10). THE DECISION OF THE CIT(A) WAS NOT ACCEPTE D AND SECOND APPEAL TO THE ITAT WAS FILED PLACING RELIANCE ON THE DECISION OF THE ITATS IN THE CASE OF M/S LAUKIK DEVELO PERS VS. DCIT CIR-3 THANE. THE ASSESSMENT OF THE ASSESSEE FOR AY 01-02 WAS COMPLETED U/S 143(3) ON 26/03/04 AND THE CLAIM OF T HE ASSESSEE FOR DEDUCTION U/S 80IB(10) WAS ALLOWED IN THE ASSESSMEN T ORDER. IN VIEW OF THE FACT THAT THE ASSESSEES CLAIM FOR DEDU CTION U/S 80IB(10) IS CONTESTED BEFORE THE ITAT RELYING ON THE D ECISION OF THE ITAT IN THE CASE OF M/S LAUKIK DEVELOPERS VS. DCIT CIR-3 THANE I HAVE REASONS TO BELIEVE THAT THE INCOME OF THE ASSESSEE CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND TH E ASSESSEE HAS BEEN ALLOWED EXCESSIVE RELIEF UNDER THE ACT. ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 3 ACCORDINGLY PROVISIONS OF SECTION 147 ARE PROPOSED TO BE INVOKED IN THE ASSESSEES CASE FOR AY 01-02. AS PER THE PROVISIONS OF SECTION 151(1) SANCTION FOR ISSUE OF NOTICE U/S 148 IN RESPECT OF ASSESSMENT YEAR 01-02 IS REQUIRED FROM CIT-III THANE. THE PROFORMA ALONG W ITH THE REASONS RECORDED IS PUT UP FOR APPROVAL. IN THE REASSESSMENT PROCEEDINGS THE ASSESSING OFFIC ER TOOK THE VIEW THAT THE ASSESSEE WAS NOT ENTITLED TO THE DEDU CTION UNDER SECTION 80-IB(10) OF THE ACT. ONE OF THE REASONS G IVEN BY THE ASSESSING OFFICER WAS THAT OUT OF THE TOTAL PROJECT OF EIGHT BUILDINGS TWO BUILDINGS WERE HAVING 31 SHOPS MEASURING 5286.2 0 SQ. FT. OF BUILT-UP AREA. THE ASSESSING OFFICER ACCORDINGLY H ELD THAT SINCE THE PROJECT COMPRISED OF COMMERCIAL AREA WHICH WAS IN V IOLATION OF THE SECTION THE ASSESSEES CLAIM CANNOT BE ACCEPTED. IN COMING TO THE CONCLUSION THE ASSESSING OFFICER CONSIDERED THE ASS ESSEES OBJECTIONS IN DETAIL AND REJECTED THEM. HE ALSO NO TICED THAT SECTION 80-IB(10) WAS AMENDED WITH EFFECT FROM 01.04.2005 B Y INTRODUCING CLAUSE (D) WHICH ALLOWS FOR THE CONSTRUCTION OF SH OPS AND COMMERCIAL ESTABLISHMENTS NOT EXCEEDING FIVE PER CE NT OF THE AGGREGATE BUILT-UP AREA OF THE HOUSING PROJECT OR T WO THOUSAND SQUARE FEET WHICHEVER IS LESS. HE OPINED THAT THE AMENDMENT WAS NOT APPLICABLE TO THE ASSESSMENT YEARS PRIOR TO 200 5-06. IN THIS VIEW HE DISALLOWED THE CLAIM FOR DEDUCTION OF ` 48 51 592/- UNDER SECTION 80-IB(10) OF THE ACT. 5. THE ASSESSEE APPEALED TO THE CIT(A) AND CHALLENG ED BOTH THE JURISDICTION TO REOPEN THE ASSESSMENT AND THE D ISALLOWANCE OF THE CLAIM FOR DEDUCTION ON MERITS. DETAILED WRITTE N SUBMISSIONS WERE ALSO FILED BEFORE THE CIT(A) IN RESPECT OF BOT H THE GROUNDS. THE CIT(A) DOES NOT APPEAR TO HAVE GONE INTO THE QU ESTION OF THE ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 4 JURISDICTION OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT. ON MERITS HE HELD RELYING ON SEVERAL ORDERS OF THE TR IBUNAL INCLUDING THE MUMBAI BENCHES THAT THE ASSESSEE WAS ELIGIBLE FOR PROPORTIONATE DEDUCTION IN RESPECT OF RESIDENTIAL U NITS AND THE DEDUCTION CLAIMED IN RESPECT OF COMMERCIAL UNITS WA S NOT IN ORDER. HE THUS ALLOWED THE ASSESSEES APPEAL IN PART. 6. THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRI BUNAL. AS REGARDS THE JURISDICTION TO REOPEN THE ASSESSMENT I S CONCERNED IT IS SEEN THAT THE NOTICE UNDER SECTION 148 WAS ISSUED O N 27.12.2006 WHICH IS BEYOND THE PERIOD OF FOUR YEARS FROM THE E ND OF THE ASSESSMENT YEAR. ACCORDING TO THE PROVISO TO SECTI ON 147 WHERE AN ASSESSMENT UNDER SECTION 143(3) IS SOUGHT TO BE REOPENED UNDER SECTION 147 NO ACTION CAN BE TAKEN TO REOPEN THE ASSESSMENT AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEA BLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO FILE A RETURN UNDER SECTION 139 OR SECT ION 142(1) OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATE RIAL FACTS NECESSARY FOR THE ASSESSMENT. IN JUDGING WHETHER THE NOTICE ISSUED UNDER SECTION 148 IS WITHIN THE JURISDICTION OF THE ASSES SING OFFICER WE HAVE TO LOOK AT THE REASONS RECORDED BY THE ASSESSI NG OFFICER UNDER SECTION 148(2) OF THE ACT. WE HAVE ALREADY E XTRACTED THE REASONS FOR REOPENING THE ASSESSMENT. A PERUSAL TH EREOF SHOWS THAT THERE IS NO ALLEGATION THEREIN THAT THE ASSESS EE FAILED TO FILE THE RETURN UNDER SECTION 139 OR SECTION 142(1) OR SECTI ON 148. ALL THAT THE REASONS DISCLOSE IS THAT THE ORDER OF THE CIT(A ) ALLOWING ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 5 PROPORTIONATE DEDUCTION TO THE ASSESSEE UNDER SECTI ON 80-IB(10) FOR THE ASSESSMENT YEAR 2003-04 HAS NOT BEEN ACCEPTED B Y THE DEPARTMENT AND SECOND APPEAL TO THE TRIBUNAL WAS FI LED PLACING RELIANCE ON AN ORDER OF THE TRIBUNAL MUMBAI BENCH IN THE CASE OF M/S LAUKIK DEVELOPERS VS. DCIT IN ITA NO: 532/MUM/ 2006 DATED 10.07.2006. THE REASONS FURTHER DISCLOSED THAT IT IS FOR THIS REASON ALONE THAT THE ASSESSING OFFICER HAS FORMED THE BEL IEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THERE IS NO ALLEGATION IN THE REASONS RECORDED THAT THE ASSESSEE HAS FAILE D TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT. IN THE CASE OF GRINDWELL NORTON LTD. VS. JAGDISH PRASA D JANGID ASSISTANT COMMISSIONER OF INCOME TAX AND OTHERS (20 04) 267 ITR 673 (BOM) IT WAS HELD BY THE BOMBAY HIGH COURT THA T WHERE THE ASSESSMENT IS REOPENED AFTER A PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR IT IS NECESSARY FOR THE ASSESSI NG OFFICER TO SHOW IN THE REASONS RECORDED THAT THERE WAS A FAI LURE ON THE PART OF THE ASSESSEE TO FILE THE RETURN OR TO DISCLOSE M ATERIAL FACTS IN THE RETURN. IT WAS HELD THAT IN THE ABSENCE OF ANY SUC H ALLEGATION IN THE REASONS RECORDED THE REOPENING OF THE ASSESSMENT B EYOND THE PERIOD OF FOUR YEARS CANNOT BE SUSTAINED. IN BHAVE SH DEVELOPERS VS. ASSESSING OFFICER & OTHERS (2010) 34 DTR (BOM) 125 THE HONBLE BOMBAY HIGH COURT WAS CONCERNED WITH THE RE OPENING OF AN ASSESSMENT TO WITHDRAW THE CLAIM FOR DEDUCTION U NDER SECTION 80-IB(10) AS IN THE CASE BEFORE US. IT WAS FOUND THAT THE REASONS RECORDED AND DISCLOSED TO THE ASSESSEE DID NOT CONT AIN A FINDING TO THE EFFECT THAT THE ASSESSEE FAILED TO DISCLOSE FUL LY AND TRULY ALL ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 6 MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. ACCORDINGLY IT WAS HELD THAT THE CONDITION PRECEDENT TO THE VALID EXERCISE OF THE POWER OF REO PENING THE ASSESSMENT WAS NOT FULFILLED. THE REOPENING WAS HE LD TO BE INVALID. IN THE CASE OF MISTRY LALJI NARSI DEVELOPMENT CORPO RATION VS. ASSISTANT COMMISSIONER OF INCOME TAX & ORS. (2010) 229 CTR (BOM) 359 IT WAS HELD THAT THE JURISDICTIONAL COND ITION PRECEDENT TO THE EXERCISE OF THE POWER TO REOPEN THE ASSESSMENT BEYOND FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR IS THE FA ILURE OF THE ASSESSEE TO FILE A RETURN OF INCOME OR FURNISHED FU LLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. IT WA S HELD THAT IF THE JURISDICTIONAL CONDITION IS NOT SATISFIED THE REOPE NING WILL BE INVALID. THAT WAS ALSO A CASE OF SECTION 80-IB(10). THUS AL L THE THREE JUDGMENTS OF THE HONBLE BOMBAY HIGH COURT APPLY TO THE FACTS OF THE PRESENT CASE WHERE THE REASONS RECORDED BY THE ASSESSING OFFICER DO NOT DISCLOSE THAT THE JURISDICTIONAL CON DITION PRECEDENT FOR EXERCISING THE POWER TO REOPEN THE ASSESSMENT WAS S ATISFIED. THE REASONS ONLY SHOW THAT THE ASSESSING OFFICER PROPOS ED TO APPLY AN ORDER OF THE TRIBUNAL IN ANOTHER CASE AND QUESTION THE DECISION OF THE CIT(A) IN THE ASSESSEES OWN CASE FOR THE ASSES SMENT YEAR 2003-04. THIS DOES NOT AMOUNT TO FAILURE OF THE AS SESSEE TO DISCLOSE ALL MATERIAL AND PRIMARY FACTS FULLY AND T RULY. IT ONLY REFLECTS A NEW THINKING OR A CHANGE OF OPINION ON THE PART O F THE ASSESSING OFFICER BASED ON AN ORDER OF THE TRIBUNAL IN ANOTHE R ASSESSEES CASE. THUS WE HOLD ACCEPTING THE SUBMISSIONS OF T HE LEARNED COUNSEL FOR THE ASSESSEE THAT THE REASSESSMENT IS WITHOUT ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 7 JURISDICTION. WE ARE AWARE THAT THE QUESTION OF JU RISDICTION WAS NOT DECIDED BY THE CIT(A) BUT THAT BEING A PURE QUESTIO N OF LAW ON THE FACTS ALREADY ON RECORD AND GOING TO THE ROOT OF TH E MATTER WE HAVE DECIDED THE ISSUE OURSELVES AFTER HEARING BOTH THE SIDES. THUS GROUND NO.5 IN THE ASSESSEES APPEAL IS ALLOWED. 7. STRICTLY SPEAKING IT IS NOT NECESSARY TO DISPOS E OF THE OTHER GROUNDS ON THE MERITS OF THE MATTER BUT SUFFICE TO NOTICE THAT THE TRIBUNAL HAS IN THE ASSESSEES OWN CASE FOR THE ASS ESSMENT YEAR 2004-05 IN ITA NOS: 5395/MUM/2007 & 4780/MUM/2007 DATED 22.10.2009 SENT BACK THE ISSUE TO THE ASSESSING OF FICER AS THERE WAS A DISPUTE ABOUT THE BUILT-UP AREA OF THE COMMER CIAL / SHOPPING COMPLEX WHICH WAS CONSTRUCTED AS PART OF THE HOUSIN G PROJECT. THE LEARNED COUNSEL FOR THE ASSESSEE ARGUED IN THE ALTE RNATIVE THAT IF THE JURISDICTION ISSUE IS DECIDED AGAINST THE ASSESSEE THE MATTER SHOULD BE RESTORED TO THE ASSESSING OFFICER ON THE SAME LI NES AS FOR THE ASSESSMENT YEAR 2004-05. HOWEVER SINCE WE HAVE HE LD THAT THE REASSESSMENT IS WITHOUT JURISDICTION THESE GROUNDS BECOME ACADEMIC. 8. IN THE RESULT THE ASSESSEES APPEAL IS ALLOWED ON THE QUESTION OF LACK OF JURISDICTION TO REOPEN THE ASSE SSMENT. 9. THE DEPARTMENTS APPEAL RAISES SIX GROUNDS OUT OF WHICH GROUND NOS. 5 AND 6 ARE GENERAL AND REQUIRE NO DECI SION. THE OTHER GROUNDS ARE TO THE EFFECT THAT NO ALLOWANCE C AN BE GRANTED FOR COMMERCIAL PORTION OF THE HOUSING PROJECT AS WAS DO NE BY THE CIT(A). THE APPEAL OF THE DEPARTMENT BECOMES INFRU CTUOUS IN THE LIGHT OF OUR DECISION IN THE ASSESSEES APPEAL QUAS HING THE ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 8 REASSESSMENT PROCEEDINGS AS BEING WITHOUT JURISDICT ION. IT IS THEREFORE DISMISSED AS SUCH. 10. ASSESSMENT YEAR 2002-03: - IN RESPECT OF THIS YEAR THE ASSESSEES APPEAL IS ON THE SAME LINES AS IN THE AS SESSMENT YEAR 2001-02. GROUND NO.5 CHALLENGES THE JURISDICTION O F THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT UNDER SECTION 147 OF THE ACT AND THE OTHER GROUNDS ARE DIRECTED AGAINST THE DECISION OF THE CIT(A) TO RESTRICT THE DEDUCTION UNDER SECTION 80-IB(10) PROP ORTIONATELY. 11. THE BRIEF FACTS RELATING TO GROUND NO.5 ARE AS FOLLOWS. THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) WAS MADE O N 29.03.2004 ACCEPTING THE ASSESSEES CLAIM FOR DEDUCTION OF ` 83 47 743/- UNDER SECTION 80-IB(10) IN RESPECT OF GAGAN VIHAR HOUSING COMPLEX. THEREAFTER NOTICE WAS ISSUED UNDER SECTION 148 OF T HE ACT ON 27.12.2006. THE NOTICE IS WITHIN THE PERIOD OF FOU R YEARS FROM THE END OF THE ASSESSMENT YEAR WHICH IS THE ASSESSMENT YEAR 2002- 03. THE ASSESSING OFFICER ENCLOSED THE REASONS REC ORDED FOR REOPENING THE ASSESSMENT TO THE NOTICE AND A COPY O F THE REASONS ARE AVAILABLE AT PAGE 12 OF THE PAPER BOOK. THE RE ASONS ARE THE SAME AS FOR THE ASSESSMENT YEAR 2001-02. THE ARGUM ENT THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO FILE A RETURN OF INCOME OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT AND THEREFORE THE REOPENING OF THE ASSESSMENT IS NOT VALID IS NOT AVAILABLE TO THE ASSESSEE IN THIS APPEAL BECAUSE THE NOTICE OF REOPENING HAS BEEN ISSUED WITHIN THE PERI OD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR RULIN G OUT THE APPLICABILITY OF THE FIRST PROVISO TO SECTION 147. THAT PROVISO APPLIES ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 9 ONLY WHERE THE NOTICE IS ISSUED AFTER A PERIOD OF F OUR YEARS. THE RESULTANT POSITION IS THAT WHERE NOTICE UNDER SECTI ON 148 IS ISSUED WITHIN THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR IT IS NOT NECESSARY FOR THE ASSESSING OFFICER TO PR OVE ANY OF THE JURISDICTIONAL FACTS NAMELY THAT THERE WAS A FAIL URE ON THE PART OF THE ASSESSEE TO FILE THE RETURN OF INCOME OR TO DIS CLOSE FULLY AND TRULY ALL MATERIAL FACTS. EVEN SO THE CONTENTION OF THE ASSESSEE IS THAT NO NOTICE UNDER SECTION 148 CAN BE ISSUED WITHIN THE P ERIOD OF FOUR YEARS BASED MERELY ON A CHANGE OF OPINION. THE CON TENTION IS THAT THE REASONS RECORDED IN THIS YEAR SHOW THAT IT WAS BASED ON A SUBSEQUENT INTERPRETATION OF LAW MADE BY THE TRIBUN AL IN ANOTHER ASSESSEES CASE WHICH AMOUNTS TO A MERE CHANGE OF OPINION. 12. IN SUPPORT OF THE ABOVE CONTENTION THE ASSESSEE HAS CITED SEVERAL AUTHORITIES ALL OF THE HONBLE BOMBAY HIGH COURT. IN THE CASE OF SESA GOA LTD. VS. JOINT COMMISSIONER OF INC OME TAX AND OTHERS (2007) 294 ITR 101 (BOM) THE PANAJI BENCH O F THE HONBLE BOMBAY HIGH COURT HELD THAT WHERE A REASSESSMENT IS INITIATED IN THE LIGHT OF A SUBSEQUENT JUDICIAL DECISION IT CAN NOT BE CONSIDERED AS A CASE OF NON-DISCLOSURE OF FULL AND TRUE MATERI AL FACTS BUT SHOULD BE CONSIDERED AS A CHANGE OF OPINION ON THE BASIS OF THE SUBSEQUENT DECISION AND THE NOTICE OF REASSESSMENT BASED ON THE CHANGE OF OPINION CANNOT BE UPHELD. IN SIEMENS INF ORMATION SYSTEM LTD. VS. ASSISTANT COMMISSIONER OF INCOME TA X AND OTHERS (2007) 295 ITR 333 (BOM) THE FACTS WERE NEAR IDENT ICAL TO THE ASSESSEES CASE. THERE IT WAS A CASE OF A CLAIM MA DE BY THE ASSESSEE UNDER SECTIONS 10A AND 10B OF THE ACT FOR THE ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 10 ASSESSMENT YEAR 2001-02. THE ASSESSING OFFICER AFT ER APPLYING HIS MIND TO THE CLAIM PASSED AN ORDER UNDER SECTION 143 (3) ON 23.03.2004 ACCEPTING THE CLAIM. SUBSEQUENTLY THE A SSESSEES ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04 WHERE A SIMILAR CLAIM WAS MADE BY THE ASSESSEE WAS COMPLETED ON 28.02.200 6 BUT IN THIS ASSESSMENT THE CLAIM OF THE ASSESSEE WAS NEGAT IVED. BASED ON THE VIEW OF THE ASSESSING OFFICER IN THE ASSESSM ENT YEAR 2003- 04 THE ASSESSING OFFICER REOPENED THE ASSESSMENT Y EAR 2001-02 BY ISSUE OF NOTICE ON 13.03.2006 WHICH WAS WITHIN THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR 2001 -02. THE NOTICE WAS CHALLENGED BEFORE THE HONBLE BOMBAY HIG H COURT BY A WRIT PETITION FILED BY THE ASSESSEE. IT WAS HELD B Y THE HONBLE HIGH COURT THAT THE ASSESSING OFFICER WHO COMPLETED THE ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04 HAD TAKEN A DIFFERENT V IEW OF THE ASSESSEES CLAIM ON THE SAME SET OF FACTS WHICH EXI STED IN THE ASSESSMENT YEAR 2001-02 AND ON THE INTERPRETATION O F THE SAME PROVISIONS OF LAW. THE ASSESSING OFFICER HAD ALSO RELIED ON AN ORDER OF THE TRIBUNAL IN THE CASE OF NAVIN BHARAT I NDUSTRIES LTD. VS. DEPUTY CIT (2004) 270 ITR (AT) 1 (BOM). THE HIGH C OURT HELD THAT THE ORDER OF THE TRIBUNAL IN THE ABOVE DECISION BY ITSELF OR IN CONJUNCTION WITH A CHANGE OF OPINION AS TO THE TRUE CONSTRUCTION OF THE PROVISION OF LAW COULD NOT ALSO GIVE RISE TO R EASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMEN T. ACCORDINGLY THE NOTICE WAS QUASHED. IT MAY BE NOTI CED THAT IN THE CASE BEFORE US ALSO THE ASSESSING OFFICER HAD RELIE D ON AN ORDER OF THE TRIBUNAL IN THE CASE OF M/S LAUKIK DEVELOPERS ( SUPRA) WHERE A ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 11 DIFFERENT VIEW HAD BEEN EXPRESSED BY THE TRIBUNAL A ND THAT WAS THE BASIS FOR REOPENING THE ASSESSMENT. THE RATIO OF T HE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SIEMEN S INFORMATION SYSTEM LTD. (SUPRA) SQUARELY APPLIES SINCE IT HAS B EEN OBSERVED BY THE HIGH COURT THAT ANY ORDER OF THE TRIBUNAL EXPRE SSING A DIFFERENT VIEW BY ITSELF OR IN CONJUNCTION WITH A CHANGE OF O PINION AS TO THE TRUE CONSTRUCTION OF THE PROVISION CANNOT CONSTITUT E REASON TO BELIEVE WITHIN THE MEANING OF SECTION 147. IN THE CASE OF ASTEROIDS TRADING AND INVESTMENTS P. LTD. VS. DEPUTY COMMISSI ONER OF INCOME TAX (2009) 308 ITR 190 (BOM) IT WAS HELD TH AT THE POWER TO REOPEN THE ASSESSMENT CANNOT BE USED LIKE THE PO WER OF REVIEW TO REOPEN AN ASSESSMENT IN THE ABSENCE OF ANY NEW MATERIAL BROUGHT ON RECORD AND IF A NOTICE IS ISSUED TO REOP EN THE ASSESSMENT WITHOUT ANY NEW MATERIAL AND ONLY ON THE BASIS OF A DIFFERENT OPINION IT CANNOT BE HELD TO BE VALID. A SIMILAR DECISION WAS RENDERED BY THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF ASIAN PAINTS LTD. VS. DEPUTY COMMISSIONER OF INCOME TAX AND ANOTHER (2009) 308 ITR 195 (BOM). IN THIS CASE ALS O THE ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04 WAS COMP LETED ON 14.03.2006 ALLOWING DEDUCTIONS FOR CERTAIN ITEMS OF EXPENDITURE. NOTICE UNDER SECTION 148 WAS ISSUED ON 27.12.2006 O N THE GROUND THAT THE EXPENDITURE WAS WRONGLY ALLOWED AND THERE FORE THE ASSESSMENT HAD TO BE REOPENED. IT MAY BE SEEN THAT IN THE CITED CASE ALSO THE NOTICE WAS ISSUED WITHIN THE PERIOD O F FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. NEVERTHEL ESS IT WAS HELD THAT AN ASSESSMENT CANNOT BE REOPENED WITHOUT ANY N EW FACT OR ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 12 NEW MATERIAL OR NEW INFORMATION HAVING COME ON RECO RD AND MERELY ON THE BASIS OF A FRESH APPLICATION OF MIND TO THE SAME SET OF FACTS WHICH WERE PRESENT WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT. FINALLY IN THE C ASE OF AVENTIS PHARMA LTD. VS. ASSISTANT COMMISSIONER OF INCOME TA X AND OTHERS (2010) 323 ITR 570 (BOM) THE HONBLE BOMBAY HIGH C OURT AFTER REFERRING TO THE JUDGMENT OF THE SUPREME COURT IN C IT VS. KELVINATOR OF INDIA LTD. (2010) 320 ITR 561 (SC) HELD THAT TH E POWER TO REOPEN AN ASSESSMENT IS NOT AKIN TO A REVIEW AND THE EXIST ENCE OF TANGIBLE MATERIAL IS NECESSARY TO ENSURE AGAINST ARBITRARY E XERCISE OF THE POWER. IN THAT CASE THE ASSESSMENT YEAR INVOLVED W AS 2004-05 AND THE NOTICE OF REOPENING WAS ISSUED ON 16.03.200 9 WITHIN THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. IT WAS HELD THAT THE NOTICE WAS INVALID BECAUSE THERE WAS NO TANGIBLE MATERIAL BEFORE THE ASSESSING OFFICER TO HOLD THE B ELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THAT T HE NOTICE WAS PROMPTED BY A MERE CHANGE OF OPINION. 13. THE AFORESAID FOUR JUDGMENTS ALL OF THE HONBL E JURISDICTIONAL HIGH COURT ARE DIRECTLY ON THE QUESTION RAISED BEF ORE US BY THE ASSESSEE IN GROUND NO.5. THE REASONS RECORDED FOR REOPENING THE ASSESSMENT ARE ON THE SAME LINES AS THOSE RECORDED FOR THE ASSESSMENT YEAR 2001-02. THEY DO NOT SHOW THAT ANY FRESH TANGIBLE MATERIAL OR NEW FACT OR INFORMATION HAS CO ME ON RECORD AFTER THE COMPLETION OF THE ORIGINAL ASSESSMENT. A LL THAT HAS BEEN STATED IS THAT THERE IS AN ORDER OF THE TRIBUNAL IN THE CASE OF M/S LAUKIK DEVELOPERS (SUPRA) IN WHICH A DIFFERENT VIE W A VIEW IN ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 13 FAVOUR OF THE DEPARTMENT HAS BEEN TAKEN AS TO THE P ROVISIONS OF SECTION 80-IB(10) AND THEREFORE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THIS IS NOTHING BUT A CHANGE O F OPINION ON THE SAME SET OF FACTS BASED ON A DIFFERENT AND SUB SEQUENT INTERPRETATION OF LAW. ON THIS ISSUE THE JUDGMENT IN THE CASE OF SIEMENS INFORMATION SYSTEM LTD. (SUPRA) IS DIRECTLY ON POINT. RESPECTFULLY FOLLOWING THE SAID JUDGMENT WE HOLD T HAT THE REASSESSMENT WAS WITHOUT JURISDICTION. GROUND NO.5 IS THUS ALLOWED. 14. SO FAR AS GROUND NOS. 1 TO 4 ARE CONCERNED THE Y ARE AGAINST THE DECISION OF THE CIT(A) ON THE MERITS OF THE CLA IM UNDER SECTION 80-IB(10). IN VIEW OF OUR DECISION THAT THE REASSE SSMENT ITSELF IS INVALID THESE GROUNDS NEED NOT BE ADJUDICATED UPON . 15. THE ASSESSEES APPEAL IS THUS ALLOWED. 16. THE APPEAL OF THE DEPARTMENT IS IDENTICAL TO IT S APPEAL FOR THE ASSESSMENT YEAR 2001-02. IN LINE WITH OUR DECISION FOR THAT YEAR THE SAID APPEAL IS DISMISSED AS INFRUCTUOUS. 17. TO SUM UP THE ASSESSEES APPEALS ARE ALLOWED A ND THE DEPARTMENTS APPEALS ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH OCTOBER 2010. SD/- SD/- (J SUDHAKAR REDDY) (R V EASWAR ) ACCOUNTANT MEMBER PRESIDENT MUMBAI DATED 29 TH OCTOBER 2010 SALDANHA ITA NO: 7350 & 7351/MUM/2008 ITA NO: 224 & 225/MUM/2009 14 COPY TO: 1. M/S AAKASH LAND DEVELOPERS SUMATI SADAN PURANDARE WADI BAZAR WARD NR SARASWAT BANK VIRAR (E) TAL. VASAI THANE 401 303 2. DCIT CIRCLE 4 THANE+ 3. CIT-III THANE 4. CIT(A)-II THANE 5. DR F BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR ITAT MUMBAI