TMI Blog2015 (11) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... present case, the reassessment proceedings u/s. 147 r.w.s. 148 have been initiated by the Assessing Officer merely on the basis of change of opinion which is not permissible under law. At the time of scrutiny assessment all the information was available before the Assessing Officer. The Assessing Officer had an opportunity to examine and raise query. A perusal of the assessment order passed u/s. 143(3) shows that the Assessing Officer was well aware of the fact about the amalgamation of the companies with the assessee company. The Assessing Officer had raised certain queries on the depreciation claimed by the assessee on ‘license to collect toll’ in respect of amalgamating companies. Thus, it is evident that the Assessing Officer had knowledge about the amalgamation of the companies as well as issues relating thereto. A perusal of the reasons for reopening further strengthen our view wherein the Assessing Officer has categorically stated, ‘On perusal of the material available on record…..’ the Assessing Officer has reasons to believe that the amalgamating companies does not satisfy the definition of Industrial Undertaking u/s. 72A. From the documents on record, it is writ large ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Ltd., Ashoka Infra Pvt. Ltd., Ashoka Vastu Pvt. Ltd., Ashoka Vastushilp Pvt. Ltd., Ashoka Shilpvikas Pvt. Ltd. and Ashoka Construction Engineers Pvt. Ltd. were amalgamated with the assessee company w.e.f. 01-04-2003. The assessee filed revised return of income on 30-10-2005 declaring total income as Nil. During the scrutiny assessment proceedings various issues were raised including issue arising from the amalgamation of various companies with the assessee company. The Assessing Officer computed the tax liability of the assessee under MAT provision i.e. u/s. 115JB as ₹ 70,15,438/-. 2.1 Thereafter the Assessing Officer issued notice u/s. 148 on 06-03-2007 on the ground that the assessee company and the amalgamating companies are not industrial undertaking within the meaning of section 72A of the Act. Therefore, the assessee is not eligible to claim carry forward and set off of accumulated losses and unabsorbed depreciation allowance of the amalgamating companies under the provisions of section 72A of the Act. It was stated that the Assessing Officer has reasons to believe that the assessment has been made by allowing excessive loss and depreciation allowance under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no allegation by the Assessing Officer that the assessee has failed to make true and full disclosure. A perusal of reasons for re-opening which are at pages 205 and 206 of the paper book would make it amply clear that reassessment proceedings have been initiated on the basis of material already available on record. The assessee had filed revised return of income on 30-10-2005 to give effect to the order of Hon'ble Bombay High Court sanctioning the scheme of amalgamation of M/s. Ashoka Info Pvt. Ltd., Ashoka Infra Pvt. Ltd., Ashoka Vastu Pvt. Ltd., Ashoka Vastushilp Pvt. Ltd., Ashoka Shilpvikas Pvt. Ltd. and Ashoka Construction Engineers Pvt. Ltd. with the assessee company. During the scrutiny assessment proceedings, the assessee had provided all the material documents to the Assessing Officer. The Auditor in his report had categorically stated about the scheme of merger approved by the Hon'ble High Court of Bombay and the fact that the audited financial statements were adjusted in accordance with the approved scheme of merger. During the assessment proceedings, the question of revaluation of assets on amalgamation was raised by the Assessing Officer which was duly an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.2 The ld. AR raised an additional ground that the Commissioner of Income Tax (Appeals) has erred in not allowing the benefit of set off and carry forward of brought forward business losses and unabsorbed depreciation of the amalgamating companies in the hands of the assessee company. The ld. AR further submitted that without prejudice to the grounds raised in the appeal, if the set off and carry forward business losses and unabsorbed depreciation of the amalgamating companies is not allowed to the assessee then the correct WDV of the block of assets in the hands of the assessee should be allowed to be carry forward to the next year. The ld. AR submitted that although this ground has been raised for the first time before the Tribunal, it is a legal ground and can be raised at any stage. To support his submissions, the ld. AR placed reliance on the decision of the Hon'ble Bombay High Court in the case of CIT Vs. Pruthvi Brokers and Shares Pvt. Ltd. reported as 349 ITR 336 (Bom). 4. Shri Rajesh Damor representing the Department vehemently supported the orders of Commissioner of Income Tax (Appeals) submitted that the assessee has not made full and true disclosure during t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of scrutiny assessment proceedings, the assessee had given the details of the nature of business carried on by the amalgamating companies. The assessee had not only given primary information but the detailed information during the scrutiny assessment proceedings. The reassessment proceedings have been initiated only on the change of opinion and that to on the basis of information which is already on record. The allegation that the assessee has failed to furnish complete information or has passed the information in piecemeal is without any base. As regards the case laws relied upon by the ld. DR, the ld. AR submitted that the facts in the case of ACIT Vs. Appollo Hospitals Enterprises Ltd. (supra) are entirely distinguishable. No fresh tangible material was available with the Assessing Officer to initiate reassessment proceedings in the present case. The ld. AR contended that even the judgments rendered in the case of Honda Siel Power Products Ltd. (supra), CIT Vs. Usha International Ltd. (supra) and Export Credit Guarantee Corporation of India Ltd. Vs. Addl. CIT (supra) the facts are distinguishable and thus the said judgments are not applicable in the present case. 5.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer on 06-03-2007 issued notice u/s. 148 to the assessee. The reasons for reopening show that the provisions of section 147 r.w.s. 148 has been invoked on the basis of material already available on record. The relevant extract of the reasons for reopening communicated to the assessee reads as under: Reasons for Re-opening: As per terms of Scheme of Amalgamation (merger) sanctioned by order Dt. 03rd December, 2004 of Hon. High Court of Mumbai following companies (merged companies) has been amalgamated with the Ashoka Buildcon Ltd. w.e.f. 01/04/2003 (a) Ashoka Vastu Private Ltd. (b) Ashoka Vastushilp Pvt. Ltd. (c) Ashoka Shilpvikas Pvt. Ltd. (d) Ashoka Info Pvt. Ltd. (e) Ashoka Infra Pvt. Ltd. (f) Ashoka Construction Engineers Pvt. Ltd. Section 72A of the I.T. Act, 1961 deals with carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc. Subsection (1) of section 72A, in case of amalgamation of a company owning an industrial undertaking with another company, allows carry forward and set off of accumulated loss and unabsorbed depreciation allowance provided t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve relief under this Act. (ii) Excessive toss or depreciation allowance or any other allowance under this Act has been computed. As the assessee has given set off to brought forward losses and depreciation, he has paid the taxes u/s 115 JB, the Minimum Alternate Tax. Assessee is showing his book profit amounting to ₹ 91257740/- on which tax liability comes to ₹ 7015438/-. As A.O, has reason to believe that the assessee is not entitled to give set off to brought forward tax and depreciation, provision of MAT as per section 115JB will not apply to assessee. After disallowing the set off of brought forward losses and depreciation, assessee's tax liability comes to ₹ 2,88,38,334/-. In view of the above mentioned reasons the assessment for A, Y. 2004-05 is reopened and notice u/s 147 is issued to the assesses on 01/03/2007. Sd/- (V.R. PATIL) Asstt. Commissioner of Income Tax, Circle-2, Nashik 8. Thus, it is evident that that the reassessment proceedings were not initiated on the basis of fresh tangible material but on the basis of material available on record in the hands of Assessing Officer. Further, a perusal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in the case of CIT Vs. Kelvinator of India Ltd. (supra) has held: 14. It is well settled principle of interpretation of statute that entire statute should be read as a whole and the same has to be considered thereafter chapter by chapter and then section by section and ultimately word by word. It is not in dispute that the Assessing Officer does not have any jurisdiction to review its own order. His jurisdiction is confined only to rectification of mistake as contained in Section 154 of the Act. The power of rectification of mistake conferred upon the ITO is circumscribed by the provisions of Section 154 of the Act. The said power can be exercised when mistake is apparent. Even mistake cannot be rectified where it may be a mere possible view or where the issues are debatable. Even the Income-tax Appellate Tribunal has limited jurisdiction under Section 254(2) of the Act. Thus when the Assessing Officer or Tribunal has considered the matter in detail and the view taken is a possible view the order cannot be changed by way of exercising the jurisdiction of rectification of mistake. 15. It is a well settled principle of law that what cannot be done directly cannot b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order and took recourse to the provisions of section 147 to rectify his mistake. The Hon'ble Court held that the Assessing Officer cannot take advantage of his own wrong and reopen the assessment under the provisions of section 147. The Legislature has not conferred power on the Assessing Officer to review its own order. Therefore, the power u/s. 147 cannot be used to review the order. In the said case during the assessment the assesses had claimed deduction of provision for estimated liability of arrears of wages payable to workmen at its Ankleshuar plant and contribution by way of reimbursement of capital loss incurred by provident fund, gratuity and superannuation funds. A notice-cum-questionnaire was issued to the petitioner in the course of assessment proceedings investigating into the aforesaid issue and eventually the deduction was allowed. Later, notice .under section 148 was issued which related to the deduction allowed in relation to the said two items of expenditure. The assessee raised objection contending that it had made a full and true disclosure of the material facts in the computation of income. The objections were, however, rejected. The Hon'ble Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .. the Assessing Officer has reasons to believe that the amalgamating companies does not satisfy the definition of Industrial Undertaking u/s. 72A. From the documents on record, it is writ large that the reassessment proceedings have been initiated on the change of opinion which is impermissible under the Act. Therefore, reopening of assessment is bad in law and subsequent proceedings arising there from are not sustainable, accordingly, are liable to be set aside. 14. The second issue raised in the appeal of the assessee is with regard to disallowance of deduction claimed by the assessee u/s. 80IA(4). Since, the reassessment proceedings u/s. 147 r.w.s. 148 have been set aside. This issue, as well as, the additional ground of appeal raised by the assessee have become academic and hence does not require adjudication. ITA No. 1255/PN/2013 15. Now, we proceed on to the appeal of Revenue. The Revenue in its appeal has assailed the findings of Commissioner of Income Tax (Appeals) in allowing the employee share of contribution to PF and ESIC after due date under the respective Acts. It is an undisputed fact that the assessee has contributed towards PF and ESIC before due date o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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