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TMI Blog2012 (6) TMI 107X X X X Extracts X X X X X X X X Extracts X X X X ..... r company had filed its return of income for the assessment year 2004-2005, admitting a total income of Rs.67,71,840/-. The return of income, filed by the petitioner company, had been processed, under Section 143(1) of the Act. 4. It had been further stated that the respondent, after scrutinizing the entire records, including the agreement, had completed the assessment, by an order, dated 28.12.2006, issued under Section 143(3) of the Act, disallowing the entire exemption relating to the deduction, under Section 80IB(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 29.4.2008, in ITA No.853/200607, 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.153 of 2010, and the said case is still pending on the file of this Court. As such, the question as to whether the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , illegal and void. He had further submitted that the assessment, for the assessment year 2004-2005, had been completed, by an order, dated 28.12.2006, 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 Commissioner of Income Tax, Delhi Vs. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC). 9. 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 re-opened only on the ground of the explanation to Section 80IB(10), which has been substituted by the Finance (No.2) Act, 200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said case is very similar to the present case before this Court. In the said case, the High 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, withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... failure on the part of the petitioner to disclose all material facts, fully and truly, for the passing of an assessment order. 19. 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 2004-2005. Therefore, the impugned notice, dated 16.3.2011, issued under Section 148 of the Act, and the consequential proceedings, dated 25.11.2011, issued by the respondent, are illegal and void. 20. In the counter affidavit filed on behalf of the respondent, it has been stated that the assessment, in respect of the assessment year 2004-2005, under Section 143(3) of the Income Tax Act, 1961, had been completed, vide assessment order, dated 28.12.2006. 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 go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. As such, the contention of the petitioner that the proceedings initiated by the respondent is barred by limitation is liable to be rejected. 24. In fact, the time limit prescribed for the re-opening of the assessment, which is six years from the end of the relevant assessment year, had 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 80IB 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 80IB(10) of the Act, introduced in sub-Section 10 of Section 80IB, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the re-opening of the assessment is the amendment to Section 80IB(10) of the Act, which says that the benefit of the deduction shall not be allowed, in respect of an undertaking which executes housing projects, as a works contract. 29. It had been further stated that the petitioner is wrong 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 vs Income-Tax Officer And Another, (1993) 203 ITR 456 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, re-assessment proceedings could be validly initiated. 30. 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 and Finvest Vs. Asst. Commissioner of Income Tax (2006) 281 ITR (Del.) 394, it had been held that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntroduced, in Section 80IB of the Act, in the year, 2009, with effect from 1.4.2001, the respondent had proposed to reassess the income of the petitioner, by issuing a notice, under Section 147 of the Act. Therefore, it would not be 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. 33. 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 80IB(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 respo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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