TMI Blog2018 (5) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... 35(2AB) of the I. T. Act. If the petitioner would have disclosed said fact at the time of scrutiny assessment U/Sec. 143(3) of the I. T. Act and still the assessing officer would have allowed the deduction, then the petitioner would have been justified in challenging the reopening of the assessment. However, the same is not the fact as observed supra. Thus we decline to exercise our writ jurisdiction. However, we make it clear that, we have not dealt with the merits of the contentions qua the requirement of Form No. 3CM to claim deduction U/Sec. 35(2AB) of the I. T. Act. The same would be decided by the assessing officer on its own merit - Decided against assessee. - Writ Petition No. 13871 of 2017, 13872, 13873, 13874 of 2017 - - - Dated:- 26-4-2018 - S. V. GANGAPURWALA AND A. M. DHAVALE, JJ. Shri P. M. Shah, Senior Advocate i/by Shri Subhodh P. Shah, Advocate for the Petitioner in all matters. Shri Alok Sharma, Standing Counsel for the Respondent in all matters. FINAL ORDER (Per S. V. Gangapurwala, J.) : 1. The issue involved in all these writ petitions is based on same facts and involve common question, to avoid rigmarole they are decided together. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s without jurisdiction. The entire issue as to the entitlement of the deduction on expenditure of scientific research U/Sec. 35(2AB) of the I. T. Act is already considered in the earlier original assessment. It was a scrutiny assessment U/Sec. 143(3) of the I. T. Act. The general principle is that, once the assessment is complete, it becomes final. The learned senior advocate further submits that, in the scrutiny assessment a pointed question was asked that is question No. 25 calling upon the petitioner to furnish full details regarding claim of in house expenses U/Sec. 35 (2AB) of the I. T. Act for research and development. The petitioner was also directed to furnish supportive evidence and to explain that these expenses should be allowed. A comprehensive scrutiny was carried out to ascertain entitlement to claim weighted deduction on expenditure of scientific research. The entire available record was scanned thoroughly. On complete satisfaction, the claim of deduction was allowed by the assessing officer. The material which was available before the assessing officer was considered and on the basis of the material the assessing officer was convinced that the deduction is to be al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dgment of the Apex Court in a case of Gemini Leather Stores Vs. Income Tax Officer, Agra reported in (1975) 4 SCC 375 to submit that, after placing primary facts before the assessing officer, it is for the assessing officer to make necessary enquiry and draw proper inferences. The Assessing Officer must disclose in reasons as to which facts were not disclosed by the assessess so as to claim re assessment. To buttress his submissions, the learned senior advocate relies on the judgment of this Court in a case of Hindustan Lever Ltd. Vs. R. B. Wadkar reported (supra) and TAO Publishing Pvt. Ltd. Vs. Deputy Commissioner of Income Tax reported in (2015) 370 ITR 135 (Bom). The learned senior counsel relies on the judgment of this Court in a case of Tata Business Support Services Ltd. Vs. Dy. Commissioner of Income Tax reported in [2015] 232 Taxman 702 (Bom) to submit that, failure to place a version favourable to the revenue cannot be a reason to reopen the assessment. The assessee did not hold back any document, nor failed to supply any information. 10. The learned senior advocate further contends that, order dated 12.07.2017 rejecting the objection is vitiated, as the ob ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out any interruption and successively from the year 2000 and now ending with 31.03.2019. Implicit in it, the fact that the requirement of ongoing scientific research in the in house Research and Development facility is accepted by the prescribed authority. The learned senior counsel further submits that, the approval in Form No. 3CM does not provide for any cut off date. The assessing officer cannot sit in appeal over the approval by D.S.I.R. When there is recognition from the prescribed authority, this by itself is sufficient to hold that the required conditions were satisfied. The concept of cut off date is unknown in the fact and situation. 12. The learned senior advocate further submits that, once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inference of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else far less the assessee to tell the assessing authority what inferences, whether of facts or law should be drawn. After this discovery, the Income Tax Officer had in his possession all the primary facts and it was for h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Civil Appeal No. 6704 of 2013 and the judgment in a case of GKN Driveshafts (India) Ltd. Vs. I.T.O. reported in (2003) 259 ITR 19 (SC). The learned advocate also relies on the judgment of this Court dated 22nd July, 2014 in Writ Petition No. 6900 of 2013 with other connected writ petitions to submit that, the effect of not possessing certificate under Form No. 3CM is best determined by the authorities and would not be considered in a petition under Article 226 of the Constitution of India. The learned advocate relies on the judgment of the Division Bench of this Court at its principal seat at Bombay in Writ Petition No. 373 of 2012 dated April 02, 2012 and states that, full and true disclosure must mean what the statute says. This Court in the said judgment dated April 02, 2012 in W. P. No. 373 of 2012 reproduced observations of the Apex Court in a case of Indian Hume Pipe Co. Ltd. Vs. The Assistant Commissioner of Income Tax, Central Circle 22 and others dated 08th November, 2011 in Writ Petition No. 1017 of 2011 which reads thus : Full and true disclosures must mean what the statute says. These disclosures cannot be garbled or hidden in the crevices of the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction, we would not embark upon the findings about the effect of not possessing certificate in Form No. 3CM. The petitioner can agitate all these grounds at the time of re assessment. We would only restrict ourselves to the question as to whether the assessing officer was justified in reopening the assessment U/Sec. 147 and 148 of the I. T. Act. 19. The returns filed by the petitioner were assessed U/Sec. 143(3) of the I. T. Act. While issuing notice U/Sec. 142(3) of the I. T. Act, a specific query was raised by the Assessing Officer with regard to the deductions claimed by the petitioner U/Sec. 35(2AB) of the I. T. Act on account of expenditure incurred for inhouse research and development. The petitioner had replied to the said query stating that the company had renewal of recognition of the in house R D unit by the authority and it was renewed from time to time upto March 31, 2016. According to the petitioner the Government of India, Ministry of Science and Technology, Department Scientific and Industrial Research, Technology Bhavan, New Delhi had granted renewal of recognition of in house Research and Development Unit from time to time. The same was with regard to renewal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... require to be established factum of escapement. At the stage of issue of notice the only question that arises is whether on the basis of the material, prima facie, there is escapement. Whether the material would conclusively prove the escapement or not is not the concern at the stage of issue of notice as has been held int he following cases : . Raymond Woolen Mills Ltd. (1999) 236 ITR 34 (SC). . Central Provinces Mananese Ore Co. Ltd. (1991) 91 ITR 66 (SC) . Sri Krishna Pvt. Ltd. (1996) 221 ITR 538 (SC) 5. In the present case, the A.O. has elaborately recorded the reasons before issue of notice u/s. 148 which has been duly supplied. The A. O. has clearly narrated the facts and material on which the 'reason to believe' for escapement of assessment is drawn. The belief is based on relevant material and reasons were formed in good faith. 6. In view of the above facts, your objection is hereby rejected and disposed off. You are, requested, to attend the assessment proceedings without any further loss of time. 22. The reasons for reopening of assessment U/Sec. 148 of the I. T. Act recorded by the Assistant Commissioner of Income Tax are as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not be considered because during this period R D center of the company was not approved u/s 35(2AB) of IT Act, 1961. It is clear from the reply in above letter that the claim of deduction u/s 35(2AB) made by the assessee company for year under consideration is invalid. In view of the above facts, I have reason to believe that the income to the extent of claim of deduction u/s 35(2AB) made by the assessee has escaped assessment in terms of the provisions of Section 147 of the Act which amounts to ₹ 6,53,46,723/ . 23. The recording of reasons while issuing the notice U/Sc. 148 of the I. T. Act and while rejecting objection of the petitioner is with regard to the effect of the petitioner's not possessing Form No. 3CM and the fact that the petitioner had not disclosed this fact at the time of scrutiny assessment U/Sec. 143(3) of the I. T. Act. 24. The petitioner had failed in its duty to report to the assessing officer the Form No. 3CM being available only upto 2009 and thereafter not possessing the said Form No. 3CM and same is again issued only from the year 2016. 25. Considering the above, it cannot be said that the reopening of assessment is only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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