TMI Blog2008 (3) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... tal at Jubilee Hills, Hyderabad with the respondent and consequent to the amalgamation, the said hospital vested with the respondent. As on 31.3.1999, the said DHCL had an unabsorbed depreciation of Rs.11,60,29,077/-, which vested with the respondent under the Scheme of Amalgamation. For the assessment year 2000-2001, the respondent submitted returns and claimed the benefit of Section 72A of the Income-tax Act (hereinafter referred to as the Act) to have the said unabsorbed depreciation of DHCL as the depreciation of the respondent. By letter in G.I.No.AX1-015/2000-01, dated 7.3.2003, certain particulars were called for from the respondent by the Department and thereupon, the assessment was completed by the Deputy Commissioner of Income-tax, Company Circle-I(1)(the then Assessing Officer), vide assessment order dated 28.3.2003 under Section 143(3) of the Act and the benefit of Section 72-A of the Act was availed by the respondent. It is seen that the respondent has preferred an appeal against certain issues pertaining to set-off of the minimum alternate tax, before the Commissioner of Income-tax (Appeals) III, Chennai under Section 246-A of the Act, and the same was disposed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, which reads as follows: "147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (heareafter in this section and in sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot find any illegality. Further more, when the Department has a reason to believe that the set-off was claimed and availed on a wrong notion by the respondent, since the hospital was not an 'industrial undertaking', we cannot find fault with the impugned action of the appellant. 8. Section 72A of the Act deals regarding the 'carry forward and set off of accumulated loss and unabsorbed depreciation allowance in amalgamation or demerger, etc.' For the sake of better appreciation, we extract hereunder the said Section: "72A: (1) where there has been an amalgamation of a company owning an industrial undertaking or a ship or a hotel with another company or an amalgamation of a banking company referred to in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949) with a specified bank, then, notwithstanding anything contained in any other provision of this Act, the accumulated loss and the unabsorbed depreciation of the amalgamating company shall be deemed to be the loss or, as the case may be, allowance for depreciation of the amalgamated company for the previous year in which the amalgamation was effected, and other provisions of this Act relating to set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king' means any undertaking which is engaged in - (i)the manufacture or processing of goods; or (ii)the manufacture of computer software; or (iii)the business of generation or distribution of electricity or any other form of power; or (iiia) the business of providing telecommunication services, whether basic or cellular, including radio paging, domestic satellite service, network of trunking, broadband network and internet services; or (iv) mining; or (v)the construction of ships, aircrafts or rail systems. (clause (iiia) was inserted by Finance Act, 2002 w.e.f. 1.4.2003) 13. Thus, the legislature has designedly used the expressions and the expression has been so widely defined as not to leave anything necessary out of its comprehension and purview and there is no ambiguity. In the case on hand, there is no dispute regarding the fact that the amalgamation was approved on 18.4.2000 and the amalgamation took place in the assessment year 2000-2001 and that the set-off was claimed by the respondent in the assessment year 2000-2001. Therefore, the above amendment of Section 72A(7)(aa) of the Act is very well applicable to the case on hand. Thus, when the term 'in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be said that the appellant has no right or power to review the earlier erroneous exemption availed by the respondent. It is not the case of the respondent that without giving any opportunity to them, the set-off availed by them was reviewed. In fact, the appellant has given notice to the respondent to explain regarding the set-off availed on an erroneous perception of law earlier. If such wrong claims availed by the assessees, particularly quoting wrong application of law are not allowed to be reviewed, a chaotic situation will arise, putting a big dent to the exchequer, having negative repercussions on the developmental activities of the country. In this factual backdrop of the case, where the reassessment has been ordered not because of a change of opinion, but having found out the illegal gain made by the respondent, the judgment of the Division Bench of the Madhya Pradesh High Court in BADRI PRASAD RAMESHWAR PRASAD vs. COMMISSIONER OF INCOME-TAX [(1996) 219 ITR PAGE 441] relied on by the learned counsel for the respondent also has no application to the facts of the case on hand. 15. It has been argued on behalf of the appellant Department that as against ce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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