TMI Blog2018 (2) TMI 1635X X X X Extracts X X X X X X X X Extracts X X X X ..... ot sustainable when the proceedings u/s 154 were pending on the same issue. Accordingly, we set aside the initiation of proceeding u/s 147/148 and consequential reassessment order. As we have set aside the initiation of proceeding u/s 147/148 and consequential reassessment order, therefore, the other grounds raised on the merits becomes infructuous. Decided in favour of assessee - ITA No. 92/JP/2015 And ITA No. 206/JP/2015 - - - Dated:- 20-2-2018 - SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri P.C. Parwal (C.A.) For The Revenue : Shri Varindera Mehta (CIT) ORDER PER BENCH: These cross appeals are directed against the order dated 31.12.2014 of ld. CIT (A), Jaipur for A.Y. 2008-09. The assessee has raised the following grounds as under:- 1. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the validity of order passed u/s 147. 2. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in confirming the disallowance of claim of deduction u/s 80IA in respect of other income on the ground that same is not derived from an eligible business. 3. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36,34,565/- in respect of two units. The assessee again raised the objections against the notice issued u/s 148 but the AO did not accept the objection of the assessee and passed the reassessment order u/s 143(3) r.w.s. 147 on 09.01.2014. The assessee challenged the validity of reopening of the AO before the ld. CIT(A) but could not succeed. 3. Before us, ld. AR of the assessee has submitted that the assessee vide its letter dated 17.09.2013 explained that in the course of assessment proceedings complete details of working of deduction u/s 80IA along with the audit certificate were filed. In these details the loss in respect of two units was separately reflected and the assessee even has not claimed deduction u/s 80IA of ₹ 3,01,41,548/- in respect of 7 units though there is no withdrawal of notification. Thus, ld. AR has submitted that the assessee pointed out that even when the earlier loss of Rs. ₹ 1,36,34,565/- in respect of two units is set off against the profits of these two units in this year, the eligible deduction would be ₹ 96.76 Crores as against ₹ 95.12 Crores allowed by the AO. Hence, the assessee contended that there is no escapement so as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdiction and debatable issue and limitation of scope of section u/s 154 of the Act, therefore, the AO dropped the proceeding u/s 154 and initiated the appropriate proceeding u/s 148 of the Act. He has further submitted that there is no dispute that in computation of deduction u/s 80IA of the Act the assessee did not adjust the earlier year loss of ₹ 1,36,34,565/- in respect of two units and therefore it was detected by the AO after completion u/s 143(3) of the Act. The New fact came to the knowledge of the AO are sufficient to form the belief that income assessable to tax has escaped assessment to the extent of loss of Rs. ₹ 1,36,34,565/- was not adjusted against the profit before claiming the deduction u/s 80IA of the Act. He has relied upon the orders of the authorities below. 5. We have considered the rival submissions as well as relevant material on record. The scrutiny assessment u/s 143(3) was completed on 22.12.2010 whereby the AO accepted the claim of deduction u/s 80IA of ₹ 95,11,66,038/-. Thereafter, the AO issued a notice u/s 154/155 of the Act dated 8.06.2012 to rectify the mistake of not adjusting the loss of the previous year of Rs. ₹ 1,36, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... idered while working out eligible amount of deduction u/s 80IA then eligible deduction works out to ₹ 96,76,73,021/- (98,13,07,585- 1,36,34,564) against which assessee has claimed deduction u/s 80IA at ₹ 95,11,66,037/- only. Since assessee has already claimed deduction u/s 80IA at lesser amount as compared to computed by your good self, thus there is no need to make any adjustment u/s 154/155. Thus, the assessee clearly explained that the profit of the assessee eligible deduction u/s 80IA is ₹ 96,76,73,021/- even after the adjustment of the said loss of ₹ 1,36,34,564/-. Hence, the deduction allowed in the assessment order of ₹ 95,11,66,037/- is not a mistake as stated in the notice u/s 154 of the Act. The AO then issued notice u/s 148 of the Act on 21.11.2012 by recording the reasons as under:- Reasons for initiating proceedings u/s147 and issue of notice u/s 148 of the I.T. Act, 1961 in the case of M/s Rajasthan State Industrial Development Investment Corporation Ltd., Jaipur (PAN No. AABCR4695 A.Y. 2008-09. The assessment in case was completed u/s 143(3) on 22.12.2010. Later it has been noticed that the assessee has worked out D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es India Ltd. vs. ACIT(supra) while dealing with an identical issue of jurisdiction of the AO has held in paras 28 o 30 as under:- 28. As already pointed out, in respect of the assessment year 2003-04, the first respondent herein issued notice under Section 154 on 20.7.2006, wherein, the Officer proposed to disallow the claim under Section 80 HHC, provision for bad debts and diminution of value of current investment and income tax debited in respect of Section 115 JB assessment and on the regular assessment under Section 143(3) in respect of the alleged mistake in granting deduction under Section 80 IB, for income tax and wealth tax debited in the profit and loss account and the share issue expenses and FRN issue expenses written off to be disallowed, being capital in nature. 29. A reading of the notice under Section 154 of the Act and the reassessment notice dated 11th May 2009 shows that there is absolutely no material difference on the issues sought to be considered under these notices, except the fact that while in the proceedings under Section 154, the notice is based on the view that there was a mistake apparent on the face of the record warranting a rectificatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the finality, either by dropping the same or passing any order in the said proceeding. As per the reasons recorded by the Assessing Officer as the assessee did not respond to the notice issued under section 154, the Assessing Officer initiated the proceedings under section 147 and in consequence issued the notice under section 148. It is also admitted fact that except the return of income of the assessee and its enclosures, no other extra material or information was in possession of the Assessing Officer. It is true that the assessee filed the return of income in response to the notice issued by the Assessing Officer under section 148 of the Act showing the rental income as an income from house property, but the assessee has every right to challenge proceeding initiated by the Assessing Officer under section 147 of the Act. Now it is well-settled principle by different judicial pronouncements that there cannot be any 'estoppel' against the statutory provisions. Admittedly, in this case, the mandate of section 147 is not fulfilled for the reasons that the Assessing Officer himself was not sure whether the issue in controversy could be the subject-matter of section 154 or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reason to believe that the income has escaped assessment, start reassessment proceedings under section 147 of the Act. In other words, the Assessing Officer cannot again start reassessment proceedings on the basis of the same reasons. 43. The Assessing Officer has not disclosed the reasons for the Assessing Officer to still believe that income that was the subjectmatter of rectification had still escaped assessment though that was not due to any obvious mistake, borne out from existing records. 44. The judgment in GKN Driveshafts (India) Ltd. v. ITO reported in [2003] 259 ITR 19, cited by Mr. Bhowmik was rendered by the Supreme Court in the particular facts of that case. The Supreme Court held (page 20) : We see no justifiable reason to interfere with the order under challenge. However, we clarify that when a notice under section 148 of the Income-tax Act is issued, the proper course of action for the noticee is to file a return and if he so desires, to seek reasons for issuing notices. The Assessing Officer is bound to furnish reasons within a reasonable time. On receipt of reasons) the noticee is entitled to file objections to issuance of notice and the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd then taking recourse to an appeal upon reassessment. 49. In Raymond Woollen Mills Ltd. v. ITO reported in [1999] 236 ITR 34 (SC) cited by Mr. Bhowmick, the Supreme Court was satisfied on facts that jurisdiction to reassess had validly been assumed. 50. If there are reasons to believe that income has escaped assessment, and jurisdiction to issue notice of reassessment under section 148 of the Income-tax Act has been exercised, the court ought not to weigh the sufficiency of the reasons in exercise of its extraordinary writ jurisdiction under article 226 of the Constitution of India. 51. The court may, however, in exercise of its power of judicial review examine whether the conditions precedent for exercise of jurisdiction to reopen assessment at all exist. In the absence of any new and/or fresh materials, on the basis of which the Assessing Officer could have formed the opinion that income has escaped assessment, the Assessing Officer lacked jurisdiction to reopen assessment. 52. The reassessment notice has been issued for virtually the same reasons for which rectification proceedings had earlier been initiated but dropped. The Assessing Officer has not di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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