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2014 (12) TMI 978 - HC - Income TaxNotice for reopening of assessment u/s 148 - Deduction u/s 80M claimed on the dividend received as a shareholder – Invocation of provisions of section 115-O - Held that:- During the subject AY 2003-04, Section 115O of the Act was not in the Act - It only came into force from the AY 2004-05 – in Godrej Agrovet Limited Versus The Deputy Commissioner of Income Tax [2010 (2) TMI 27 - BOMBAY HIGH COURT] it has been held that u/s 147 of the Act, the AO has a power to reopen the assessment by issuing a notice for the same provided that he has reason to believe that income escaped assessment - The reopening of an assessment cannot be on a mere change of opinion - the basis of reopening of the assessment was the payment of dividend u/s 115 O - Section 80M as it stood during the AY 2003-04 allowed an assessee to claim deduction u/s 80 M of the Act so long as the amount of dividend received is less than the amount of dividend distributed before the due date of filing the return of income - the AO seeking to deny the benefit of tax u/s 80 M on account of Section 115O, has proceeded on an extraneous ground - Section 115O of the Act could not have been invoked to disallow the deduction available u/s 80 M of the Act in the AY 2003-04. The date of filing of return was 31st October, 2003 and the assessee had distributed the dividend on 6th October, 2003 - all conditions necessary for claiming deduction on the dividend received u/s 80M of the Act including the monetary cap of being less than the dividend distributed was satisfied - Thus, AO could not have had any reason to believe that income chargeable to tax has escaped the assessment for AY 2003-04 - It was not open to the AO to invoke provisions of Section 115 O which were not in the Act for the AY 2003-04 to deny the benefit of deduction u/s 80M. The deduction being claimed by the assessee u/s 80 M is not on the amounts which have been distributed as dividend by the assessee to its shareholders and on which the tax is paid u/s 115 O of the Act - The deduction u/s 80M of the Act claimed is on the dividend received by the Petitioner as a shareholder – thus, Section 115 O (5) of the Act will have no application – thus, the notice issued u/s 148 is set aside – Decided in favour of assessee.
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