TMI Blog2024 (5) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... i 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) Thus Escapement of income due to claim of deduction under Section 80IB (10) was certainly a subject matter of appeal and admittedly so and, therefore, in our view, on this income reassessment is not permissible. As held by the Hon ble Apex Court in Abhisar Buildwell (P.) Ltd. [ 2023 (4) TMI 1056 - SUPREME COURT ] Revenue could initiate reassessment proceedings subject to fulfilment of the conditions mentioned in Sections 147/148 of the Act, i.e., so long as it is not hit by the third proviso to Section 147 of the Act. Reopening notice set aside - Decided in favour of assessee. - K.R. SHRIRAM DR. NEELA GOKHALE, JJ. For the Petitioner : Mr. R.A. Dada, Senior Advocate a/w. Mr. Sashi Tulsiyan i/b. Mr. P.C. Tripathi. For the Respondents : Mr. Suresh Kumar. ORAL JUDGMENT (PER K.R. SHRIRAM, J.) : 1. Rule was issued on 10th August 2016 and the order of admission reads as under : Heard. 2. Rule. The respondents waive service. 3. This petition under Article 226 of the Constitution of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed under Section 153A/C read with Section 143(3) of the Act. By the said assessment order, the Assessing Officer disallowed the entire deduction claimed under Section 80-IB(10) of the Act and also deduction of work in progress (WIP) of Rs. 3,94,572/-. 5. Petitioner challenged this order before the Commissioner of Income Tax (Appeals) [CIT(A)]. Petitioner also raised a ground of legality of the assessment made under Section 153A/C read with Section 143(3) of the Act as well as on the merits of the claim of deduction under Section 80-IB(10) of the Act. By an order dated 30th March 2015, the CIT(A) held that the order dated 29th October 2010 passed by respondent no. 1 was invalid. In the said order, the CIT(A), however, did not give any finding on the merits of the matter. 6. Subsequently, respondent no. 1 issued a notice dated 31st March 2015 under Section 148 of the Act proposing to reassess the income of petitioner alleging the same to have escaped assessment. The reason to believe reads as under : Search and seizure action u/s. 132 of the IT Act 1961 was carried out at the residence and business premises of Doshi Group of Mira Road (E), Thane on 16.10.2008 by ADIT (Inv.)-2, Thane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of time. The proviso reads provided also 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 . Mr. Dada submitted that the same issue, which is subject of reopening the assessment, was the subject in the assessment order dated 29th October 2010 which was set aside in appeal and this issue has been raised before the Appellate Authority. Therefore, the issue was subject matter of an appeal and hence, there was a bar on reopening alleging escapement of income involving the same subject. 9. In the order passed by the CIT(A) on 30th March 2015, the CIT(A) has reproduced the grounds of appeal raised by petitioner which read as under : 1. On the facts and in the circumstances of the case, the assessment framed u/s. 153A/C of the Income Tax Act, 1961 by the learned Assessing Officer is illegal as there was no search on the appellant and no incriminating material or evidence was found or seized in case of the appellant during the course of search in case of the members of the group reflecting undisclosed income. 2. On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l - 3 v/s. Abhisar Buildwell (P.) Ltd. 2023 SCC OnLine SC 481, that in case where no incriminating material is found and a notice or an order issued under Section 153A or 153C of the Act is set aside, in case of completed/unabated assessment, the only remedy available to the Revenue would be to initiate the reassessment proceedings under Sections 147/148 of the Act. We agree with Mr. Suresh Kumar that the Hon ble Apex Court has said this is the remedy which the Revenue will have but that has also been qualified by saying subject to fulfilment of the conditions mentioned in Sections 147/148 of the Act . Paragraphs 20 to 23 of Abhisar Buildwell (P.) Ltd. (Supra) read as under : 20. As per the provisions of Section 153A, in case of a search under Section 132 or requisition under Section 132A, the AO gets the jurisdiction to assess or reassess the total income in respect of each assessment year falling within six assessment years. However, it is required to be noted that as per the second proviso to Section 153A, the assessment or re-assessment, if any, relating to any assessment year falling within the period of six assessment years pending on the date of initiation of the search unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of search even where no incriminating material is found during the course of search, even in case of unabated/completed assessment, the AO can assess or reassess the income/total income taking into consideration the other material is accepted, in that case, there will be two assessment orders, which shall not be permissible under the law. At the cost of repetition, it is observed that the assessment under Section 153A of the Act is linked with the search and requisition under Sections 132 and 132A of the Act. The object of Section 153A is to bring under tax the undisclosed income which is found during the course of search or pursuant to search or requisition. Therefore, only in a case where the undisclosed income is found on the basis of incriminating material, the AO would assume the jurisdiction to assess or reassess the total income for the entire six years block assessment period even in case of completed/unabated assessment. As per the second proviso to Section 153A, only pending assessment/reassessment shall stand abated and the AO would assume the jurisdiction with respect to such abated assessments. It does not provide that all completed/unabated assessments shall abate. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his notice subsequently in the course of the proceedings under Section 147 .. for the assessment year concerned . It further states that provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment . Therefore, the Section provides for a clear bar that where an income, which is subject matter of any appeal, reassessment of such income is not permissible. The reason to believe escapement of income provides Notice u/s. 153A/C of the IT Act, 1961 dated 12.7.2010 was issued. During the year under consideration the assessee has shown that the project is completed and in its P L A/c. credited to the total sale consideration and arrived at a profit of Rs. 4,47,30,649/-. The entire profit was claimed as deduction u/s. 80IB (10). The AO has made addition on account of deduction in WIP amounting to Rs. 3,94,572/- and denied the deduction u/s. 80IB (10) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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