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2017 (4) TMI 1591 - HC - Income TaxReopening of assessment u/s 147 - assumption of jurisdiction under Section 147 - HELD THAT:- As in the present case, it is more than apparent that the Assessee never intended to question the assumption of jurisdiction under Section 147 at any stage from the time of assessment or even thereafter. It is only at the stage of admission of the Tax Case (Appeal) that the issue was raised, even then, as an additional issue. When, from December 2008 the Assessee has accepted and was quite content with the jurisdiction assumed under Section 147, we do not think it fit to permit the Assessee to raise the question now, merely for the asking. The provisions of Section 260 A read with the proviso thereto, no doubt empower the Court to consider any question, even one not raised before it, upon the Court recording its satisfaction that the case ‘involves’ such an issue. The use of the word 'involves' does not in our view extend to all and every legal issue arising in a case, but only those that the assessee demonstrates, has been contested by it at a stage proximate to the raising of the said issue by the department. Acceptance of jurisdiction without demur at every single stage of the proceeding, assessment and appeals, has to be taken to be final and inviolable. In the facts and circumstances as we have noticed above, we reject the prayer of the appellant to contest the issue of re-opening under Section 147 of the Act raised before us by way of revised substantial question of law. Business expenditure - as per revenue Appellant has not set up or commenced the business and accordingly expenditure incurred are not allowable as business expenditure - HELD THAT:- The stage wise activities engaged in by the assessee over the relevant previous year indicates that it has traversed beyond the stage of exploratory activity and was, in fact, engaged in activity that was integral to the profit earning apparatus and we hold so. Yet another aspect is that the stand of the assessee for the previous year to the effect that it had already commenced business, was accepted by the department. The fact that such acceptance was only by way of Intimation u/s 143(1) and has not been confirmed under scrutiny, is, in our view, not material for the reasons set out in para 18 of this order. The definition of 'previous year' as extracted earlier is applicable to, and leads to the inference that the assessee had in fact, commenced business in the Financial year 2003-04, Assessment year 2004-05. One cannot countenance a situation where there is a consecutive 'setting-up of business' year after year, which would be the absurd consequence that the stand taken by the department in the present year will lead to. - Decided in favour of assessee.
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