TMI Blog2012 (4) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... total income of ₹ 2,65,46,989. The return of income, filed by the petitioner company, had been processed, under section 143(1) of the Act. 3. It had been further stated that the respondent, after scrutinizing the entire records, including the agreement, had completed the assessment, by an order, dated 5.12.2008, issued under section 143(3) of the Act, disallowing the entire exemption relating to the deduction, under section 80-IB(10) of the Act. Aggrieved by the said order, the petitioner company had filed a first appeal, before the Commissioner of Income Tax (Appeals), who had confirmed the order of the respondent. Thereafter, the petitioner company had filed a further appeal, before the Income Tax Appellate Tribunal. The Income Tax Appellate Tribunal had passed an order, dated 31.3.2009, in ITA No. 156/08-09, partly allowing the appeal. The Commissioner of Income Tax had filed an appeal against the said order, under section 260A of the Act, before this Court, in T.C. No. 1060 of 2010, and the said case is still pending on the file of this Court. As such, the question as to whether the petitioner company is entitled to claim deduction, under section 80-IB(10) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed, by an order, dated 5.12.2008, under section 143(3) of the Act, after considering all the issues relevant to such assessment. Therefore, the re-opening of the assessment, by the respondent, under section 147 of the Act, is a case of change of opinion, on a concluded scrutiny assessment, on the same set of facts, contrary to the decision of the Supreme Court, in CIT v. Kelvinator of India Ltd. (2010) 32 (I) ITCL 555 (SC) : (2010) 320 ITR 561(SC) : (2010) 187 Taxman 312(SC). 8. It had been further submitted that, for the purpose of invoking Section 147 of the Act, after the expiry of four years, from the end of the relevant assessment year, the income chargeable to tax should have escaped assessment, by a reason of the failure on the part of the assessee to disclose, fully and truly, all the material facts necessary for the assessment, in respect of the relevant assessment year. From the reasons recorded it is apparent that the reassessment is sought to be reopened only on the ground of the explanation to Section 80-IB(10), which has been substituted by the Finance (No. 2) Act, 2009, with retrospective effect, from 1.4.2001. 9. In the communication dated 15.3.2011, is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court of Gujarat had held as follows: 39. Examining the facts of the present case in the light of the above principles enunciated by the Supreme Court, a bare perusal of the reasons recorded indicates that there is not even a whisper as regards any failure on the part of the petitioner to disclose fully and truly all material facts, nor is it possible to infer any such failure from the reasons recorded. Merely because of the fact that the assessee had asserted that it is a developer in the returns filed by him, it cannot be said that there is any failure on the part of the petitioner to disclose fully and truly all material facts. At best, the petitioner has made a claim along with supporting documents, namely, development agreements for construction of housing projects, etc. and based upon the said documents, the Assessing Officer had formed an opinion and granted deduction under section 80-IB(10) of the Act. As to whether in a given set of facts, the assessee is a developer or a works contractor is a matter of inference. Hence, the assertion that the petitioner is a developer, without anything more cannot be said to be an incorrect disclosure of facts, as is sought to be conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. A mere change of opinion, by the assessing authority, on the finding of a new fact, by such authority, cannot be a reason for the re-opening of the concluded assessment. As such, in the present case, no such reason exists for the re-opening of the concluded assessment, in respect of the assessment year 2006-2007. Therefore, the impugned notice, dated 1.3.2011, issued under section 148 of the Act, and the consequential proceedings, dated 25.11.2011, issued by the respondent, are illegal and void. 19. In the counter affidavit filed on behalf of the respondent, it has been stated that the assessment, in respect of the assessment year 2006-2007, under section 143(3) of the Income Tax Act, 1961, had been completed, vide assessment order, dated 5.12.2008. In the said assessment order the deduction was disallowed on the ground that the petitioner had violated the condition that the flats should be below 1500 square feet, and that the flats were not part of an exclusive residential project. The reason for disallowance was that the provision governing the claim of deduction, under section 80-IB of the Act, does not permit commercial areas, especially, when such areas exceed 2000 s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not lapsed. The re-opening of the assessment had been done only on the basis of the fresh facts gathered after the original assessment. Therefore, the contention of the petitioner that the re-opening of the original assessment is as a result of the change of opinion, cannot be accepted for the reason that no opinion was formed on the issue of eligibility of the deduction, under section 80-IB of the Act, in view of the retrospective effect of the amendment made in the said Section, with effect from the year, 2001. Thereafter, the deduction was not allowable in respect of an undertaking for the execution of housing projects, on works contract. The explanation to Section 80-IB(10) of the Act introduced in sub-Section 10 of Section 80-IB, by the Finance Act, 2009, with retrospective effect, from 1.4.2001, reads as follows: For the removal of doubts it is hereby declared that nothing contained in this sub section shall apply to any undertaking which executes the housing project as a works contract awarded by any person (including the Central or State Government. Thus, it is evident from a reading of the regular assessment order, passed under section 143(3) of the Act, that the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in stating that fresh facts had not come to light for the re-opening of the assessment. The Supreme Court, in Phool Chand Bajrang Lal v. ITO (1993) 203 ITR 456 (SC) : (1993) 69 Taxman 627(SC), had held, in similar facts and circumstances, that when the assessing officer gets fresh information, which were not available at the time of the original assessment, which enables him to form a reasonable belief that certain income had escaped assessment, because of the omission or failure of the petitioner to disclose full and true facts, reassessment proceedings could be validly initiated. 28. It had been further submitted that, as per the explanation to Section 147 of the Act, mere submission of particulars does not amount to furnishing of full and true disclosure. In Consolidated Photo Finvest Ltd. v. Asstt. CIT (2006) 11 (I) ITCL 245 (Del-HC) : (2006) 281 ITR 394(Del) : (2006) 151 Taxman 41(Del), it had been held that a matter in issue can be validly determined only upon application of mind, by the authority determining the same. Such application of mind can be seen by the reasons given by the authority concerned. The legal position that a mere change of opinion cannot be a basis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... open to the petitioner to contend that the respondent had issued the notice, for the passing of a reassessment order, based on a mere change of opinion. The respondent is empowered to pass a reassessment order based on new grounds, which were not available at the time of the passing of the original assessment order. 31. In reply, the learned counsel appearing on behalf of the petitioner had submitted that the case of the respondent should stand or fall based on the reasons stated in the notice issued by the respondent for the re-opening of the assessment, under section 147 of the Act. When it had been stated that it had been gathered, from the contents of the construction agreement, that the assessee was operating only as a contractor and not as a builder, in the light of the explanation to Section 80-IB(10) of the Income Tax Act, 1961, introduced by the Finance Act, 2009, with retrospective effect, from 1.4.2001, it would not be open to the respondent to re-open the assessment on the ground that the assessee had not disclosed the relevant facts, fully and truly, at the time of the passing of the original assessment order. No such reason has been shown in the notice issued by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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