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TMI Blog2013 (11) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... another at Silvasa. During the Assessment Year 200607, the petitioner unit at Silvasa was entitled to the benefit of deduction under Section 80IB of the Act. 4 On 23 November 2006, the petitioner filed its return of income for Assessment Year 200607 declaring its total income at Rs.1.23 Crores. In its return, the petitioner had also claimed a deduction of Rs.31.99 lakhs under Section 80IB of the Act in respect of its Silvasa Unit. 5 The Assessing Officer took up the petitioner's case for scrutiny assessment and on 29 August 2008 passed an Assessment Order under Section 143(3) of the Act for the Assessment Year 200607. The aforesaid order of Assessment dated 29 August 2008 reduced the claim for deduction under Section 80IB of the Act from Rs.31.99 lakhs to Rs.27.67 lakhs. Besides determining the total income of the petitioner at Rs.1.27 Crores. 6 On 28 March 2013, the Assessing Officer issued a notice under Section 148 of the Act to the petitioner seeking to reopen the assessment for the Assessment Year 200607. This was on the ground that he has reason to believe that the income chargeable to tax had escaped assessment under Section 147 of the Act. On receipt of the notice, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or deduction. Therefore ,deduction of Rs.2767813/allowed to the assessee company was irregular. This has resulted in the under assessment of Rs.2767813/. In view of the above facts, I have reason to believe that income of Rs.27,67,813/chargeable to tax has escaped assessment by reason of failure on the part of assessee to disclose fully and truly all material facts with the meaning of Section 147 of the IT Act, 1961." 7 On 8 July 2013, the petitioner filed its letter dated 28 June 2013 objecting to the reopening of the assessment for Assessment Year 200607. In particular, the petitioner pointed out that the reopening is sought to be done beyond the period of 4 years from the end of the Assessment Year 200607. Thus, the notice for reopening the assessment is without jurisdiction as there has been no failure on its part to disclose fully and truly all material facts necessary for assessment for the Assessment Year 200607. In particular, the petitioner pointed out that the entire claim of the petitioner for deduction under Section 80IB of the Act was examined by the Assessing Officer in detail during the assessment proceedings resulting in the claim being reduced from Rs.31.99 lakhs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mined and in that context, the expenses and income of the Silvasa Unit was also examined leading to reduction of claim for deduction under Section 80IB of the Act from Rs.31.99 lakhs to Rs.27.67 lakhs; and (d) There was no failure on the part of the petitioner to disclose fully and truly all expenses incurred by them in running its two Units and the allocation of expenses between them. 10 As against the above, Mr. Tejveer Singh, learned Counsel appearing for the revenue in support of the impugned notice and order urges the following : (a) There was failure on the part of the petitioner to fully and truly disclose all material facts during the course of Assessment proceedings for the Assessment Year 200607 leading to the Assessment order dated 28 August 2008. In particular, he submits that the petitioner had suppressed expenses incurred in respect of 80IB Unit i.e. Silvasa Unit by debiting its non 80IB unit i.e. Tarapur Unit and failed to disclose this diversion of expenses during the course of the assessment proceedings; (b) This nondebiting of expenses to the Silvasa Unit had resulted in increasing profit to the Silvasa Unit so as to enable enjoyment of the benefit of deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de drawn from those facts as held by the Apex Court in CIT v/s. Calcutta Discount Company 41 ITR 191. At the stage of issuing of a notice to reopen the only question to be considered is whether there is relevant material to form the reasonable belief that income has escaped assessment and not whether the material is sufficient to prove beyond doubt that income has in fact escaped assessment. 12 We shall now consider the rival submissions keeping in mind the settled legal position as mentioned hereinabove. The admitted / undisputed position between the parties is: (a) the assessment sought to be reopened by the impugned notice dated 28 March 2013 is beyond a period of 4 years from the end of the relevant Assessment Year i.e. Assessment Year 200607; (b) during the course of the original Assessment Proceedings the petitioner had claimed benefit of deduction under Section 80IB of the Act in respect of its Silvasa Unit. This claim for deduction under Section 80IB of the Act had been examined and reduced from Rs.31.99 lakhs to Rs.27.67 lakhs; (c) the petitioner had in its accounts viz. profit and loss accounts allocated various common expenses between the non 80IB unit and 80IB unit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e other unit while allocating common expenditure is too obvious an aspect to have not been examined by the Assessing officer particularly when he is considering the quantum of deduction available under Section 80IB to one of the units i.e. Silvasa Unit. Therefore one must necessarily proceed on the basis that while examining the quantum of deduction to be allowed under Section 80IB of the Act (which admittedly the assessment order does consider) the issue of allocation of expenditure for that purposes would necessarily have been examined. Therefore there is no tangible material to lead to a reason to believe that income has escaped assessment but only change of opinion on the part of the Assessing Officer on the material available, thus cannot be a subject matter of reassessment. 15 So far as the second precondition for reopening of assessment beyond the period of four years from the end of the relevant assessment year is concerned viz. failure to disclose fully and truly all materials facts necessary for assessment is concerned there is no dispute that the petitioner had in its accounts viz. profit and loss accounts allocated various common expenses between the non 80IB unit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Honda Siel Power Products Ltd. (supra) where no disclosure of expenses incurred in respect of tax free income was at all made, in this case the petitioner had disclosed the allocation of expenditure between the non 80IB unit and 80IB unit in its profit and loss accounts and would obviously been subject of scrutiny while considering the claim for deduction under Section 80IB of the Act. 17 Thus we are of the view that the petitioner had disclosed fully and truly all material facts necessary for assessment. Even if it is assumed that the expenses were not allocated appropriately between the Tarapur Unit (non 80IB unit) and Silvasa unit(80IB unit) as contended by the revenue, yet the same was accepted by him while considering the deduction under Section 80IB of the Act. To permit the present proceedings for reassessment would be to permit the reopening proceedings on account of change of opinion. If reassessment is allowed, on the basis of said change of opinion, it would amount to review which is not permissible under the law. 18 In view of the above, we are of the view that the notice dated 28 March 2013 under Section 148 of the Act, seeking to reopen the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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