TMI Blog2012 (2) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... hese proceedings is to (i) a notice issued - by the Assessing Officer on 9 August 2010 under Section 148 of the Income Tax Act 1961 seeking to reopen the assessment for Assessment Year 2004-05; ii) an order dated 14 November 2011 rejecting the objections of the Petitioner; and (iii) an order of reassessment dated 21 November 2011 disallowing the exemption under Section 10A for Assessment Year 2004-05. The Petitioner filed its return of income for Assessment Year 2004-05 declaring a nil income after claiming a deduction of Rs.23.93 Crores under Section 10A of the Income Tax Act 1961. An order of assessment was passed under Section 143(3) on 29 December 2006. The Assessing Officer allowed a deduction under Section 10A in the amount of Rs.23.93 Crores. The Assessing Officer did not specifically deal with the eligibility of the Petitioner to claim a deduction under Section 10A in the course of the assessment year. On 9 August 2010 a notice was issued to the Petitioner under Section 148. The following reasons have been disclosed for reopening the assessment for Assessment Year 2004-05: "During the course of the assessment proceedings for A. Y. 2006-07, it has been established on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stant Commissioner of Income Tax1; (iii)The Assessing Officer had made an enquiry during the course of the assessment proceedings for Assessment Year 2004-05 in response to which the Petitioner had submitted relevant information in regard to the eligibility of the petitioner to claim a deduction under Section 10A. Hence, the assessment cannot be reopened beyond a period of four years. 3. On the other hand, it has been urged on behalf of the Revenue that (i) As a matter of law, it is open to an Assessing Officer to reopen an assessment on the basis of material which emerges in the course of the assessment proceedings for a subsequent assessment year. This has been held to be permissible in the judgments of the Supreme Court in Sri Krishna (P.) Ltd. v. ITO2 and Ess Ess Kay Eigineering Co. (P.) Ltd. v. CIT3 which were followed in a judgment of a Division Bench of this Court in Multiscreen Media (P.) Ltd. v. Union of India4. The judgment in Siemens Information System (supra) was also considered in the subsequent judgment of the Division Bench of this Court in Multiscreen Media; (ii) During the course of the assessment proceedings for Assessment Year 2004-05 a bare reading of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gineering3, the Supreme Court held in a civil appeal arising out of the judgment of the Punjab and Haryana High Court in an income tax reference, that there was material on the basis of which the Assessing Officer could proceed to reopen the case and it was not a case of a mere change of opinion. Merely because the case of the assessee was accepted as correct, in the original assessment for the assessment year in question, that would not preclude the income tax officer to reopen the assessment for the earlier year on the basis of a finding of fact made on the basis of fresh material in the course of an assessment for the next assessment year. A similar principle of law was enunciated in a judgment of a Division Bench of this Court in Anusandhan Investments Limited v. M.R. Singh, Deputy CIT5 where the Court noted that it is a well established position in law that an assessment can be reopened on the basis of information contained in an assessment of a subsequent year. These decisions were followed by another Division Bench of this Court in Multiscreen Media (supra). In its judgment in Multiscreen Media, the Division Bench after considering the judgment of this Court in Siemens Infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/09/09 that Revenue recognition is different and reconciliation cannot be made. Again it says in letter dated 12/11/09 that, any attempt to reconcile will lead to misleading results and says that it will take time of eight weeks i.e. beyond the limitation date. Interestingly more than 8 weeks had passed by that time since the submission letter dated 04/09/09. Since both these taxes are location wise, the reconciliation would have shown the overlapping of receipts/expenses. For Delhi Unit III (Gurgaon) it is the first year of claim of deduction, and it is held that it is only an expansion of existing units. Further the facts discussed in this order were also not disclosed by the assessee in earlier years. Therefore it cannot be said that the assessee had disclosed fully and truly all material facts in those years in respect of units which started in earlier years. Therefore those units are also not eligible for 10A deduction." 6. Now it is on the basis of the material which has come on the record in the course of the assessment proceedings for Assessment Year 2006-07, based on the disclosures of the assessee and the order of assessment for that year, that the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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