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TMI Blog2016 (12) TMI 1083X X X X Extracts X X X X X X X X Extracts X X X X ..... -2012, the petitioner filed return of income on 29th September 2011 showing the total income of Rs. 4,39,39,870/= alongwith computation of income and audited accounts, accompanied by a report under Section 44AB of the Act. While filing the return of income, the petitioner also claimed deduction under Section 35 of the Act. Alongwith the return, the assessee also disclosed in the Tax Audit Report in Form 3CD, the amount admissible under Section 35 of the Act. Thereafter, the petitioner was served with a scrutiny notice. Specific queries were raised by the Assessing Officer with respect to the claim for deduction made under Section 35 [2AB] of the Act. The assessee was requested to submit a copy of Form 3CM and an order of approval of in-house research and development facility under Section 35 [2AB] of the Act and Form 3CL, which is a report to be submitted by the prescribed authority to the Director General [Income-tax Exemptions] under section 35 [2AB] of the Act, by a communication dated 10th February 2014. The Assessing Officer further informed the assessee that in absence of these forms, the claim for deductions shall be disallowed. It appears that thereafter, vide communication ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not submit the agreement with the prescribed authority for co-operation in such research and development facility and for audit of accounts maintained for such activity; instead the assessee had submitted the DSIR certificate dated 03.08.2010 where in the assessee company was only accorded the recognition to the in-house R&D unit ignoring the essential conditions of the section. Since the assessee neither furnished Form No. 3CL and 3CM nor entered into an agreement with the prescribed authority for co-operation in such research and development facility and for audit of accounts maintained for such activity, the entire weighted deduction of Rs. 3,39,35,325/= claimed under section 35 (2AB) of the Act, is required to be disallowed in the case of the assessee". 4.2 Thereafter, the assessee raised objection against reopening of the concluded assessment for A.Y 2011- 2012 - firstly, on the ground that the re-assessment proceedings have been initiated solely on the basis of audit objection and audit query and not on the basis of subjective satisfaction of the assessing officer and also on the ground that it is a case of change of opinion of the subsequent Assessing Officer. It w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer granted partial relief to the assessee and granted deduction under section 35 of the Act post August 2010. It is submitted that in a scrutiny assessment specific queries were raised by the Assessing Officer with respect to claim of the assessee under Section 35 of the Act which were specifically answered by the assessee and only thereafter, the Assessing Officer granted partial relief to the assessee and granted deduction under Section 35 of the Act post August 2010 [DSIR approval letter date], therefore, relying upon a decision of the Apex Court in case of CIT v. Kelvinator of India Limited [2010] 320 ITR 561 (SC) as well as decision of Division Bench of this Court rendered in case of Transwind Infrastructure P. Limited vs. ITO [2014] 362 ITR 67 (Guj) and another decision of the Division Bench of this Court in case of Siddhi Vinayak Transport v. Assistant Commissioner of Income-Tax, [2014] 362 ITR 72 (Guj), it is requested to quash the impugned reassessment proceedings/ impugned notice. 6. To satisfy ourselves whether re-assessment proceedings have been initiated solely at the instance of audit party and solely on the audit objections, we called for original files from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee claimed deduction under Section 35 of the Act for the whole year, however, the Assessing Officer partially granted relief and granted deduction under Section 35 of the Act post August 2010 period [ie., DSIR approval letter date]. A speaking order came to be passed by the Assessing Officer in paragraph 4 of the assessment order granting deduction under Section 35 of the Act post August 2010. In that view of the matter, the subsequent re-assessment proceedings initiated by another Assessing Officer can be said to be a change of opinion, and therefore, on a mere change of opinion, the re-assessment proceedings cannot be sustained. At this stage, the decision of Division Bench of this Court in case of Siddhi Vinayak Transport v. Asstt. Commissioner of Income-Tax [Supra] is required to be referred to, in which, after considering the decision of the Apex Court in case CIT v. Kelvinator of India Limited [Supra] and the decision of this Court in case of Transwind Infrastructure P. Limited [Supra] in somewhat similar facts and circumstances of this case, the Division Bench of this Court quashed and set-aside the impugned notice issued under Section 148 of the Act. Relevant observ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nation it can be stated that the issue was not at large before the Assessing Officer in the original scrutiny assessment. Any reexamination of such a question at this stage would only amount to change of opinion. Remedy of reopening the assessment, therefore, was simply not available. In the decision of the Supreme Court in case of Commissioner of Income Tax Vs. Kelvinator of India Ltd. reported in [2010] 320 ITR 561 (SC) the Apex Court observed as under: On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words reason to believe failing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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