TMI Blog2019 (7) TMI 748X X X X Extracts X X X X X X X X Extracts X X X X ..... material facts necessary for its assessment, the basic requirement for taking action u/s 147 of the Act as postulated in the first proviso thereto, is not satisfied. Moreover, as discussed hereinabove, during the course of scrutiny assessment, the Assessing Officer had examined the claim for deduction under section 80IB(10) in detail, therefore, merely because he did not examine such claim from the angle of clauses (e) and (f) thereof, would not be a valid ground for reopening the assessment as it would amount to a mere change of opinion . Under the circumstances, the assumption of jurisdiction by the Assessing Officer u/s 147, by issuing notice u/s 148 is invalid, which renders the impugned notice unsustainable. - Decided in favour of assessee. - R/SPECIAL CIVIL APPLICATION NO. 20078 of 2018 - - - Dated:- 29-4-2019 - MS HARSHA DEVANI AND MR BHARGAV D. KARIA, JJ. For The Petitioner (s) : MR MANISH J SHAH (1320) For The Respondent (s) : MR.VARUN K. PATEL (3802) ORAL JUDGMENT ( PER : HONOURABLE MS.JUSTICE HARSHA DEVANI) 1. By this petition under article 226 of the Cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in response to the notice under section 148 of the Act. Thereafter, the petitioner received notices dated 20.08.2018 under sections 143(2) and 142(1) of the Act. The notice under section 142(1) of the Act was also accompanied by an annexure wherein, the respondent had reproduced the reasons recorded for reopening the assessment. 4. In response to the said notice, the petitioner raised its objections vide letter dated 09.12.2018. By an order dated 11.12.2018, the respondent rejected the objections raised by the petitioner. Being aggrieved, the petitioner has filed the present petition. 5. Mr. Manish Shah, learned advocate for the petitioner, submitted that in this case, the Assessing Officer seeks to reopen the assessment for assessment year 2012-13 by issuing the impugned notice dated 28.03.2018, which is clearly beyond a period of four years from the end of the relevant assessment year and, therefore, in the absence of any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment, the assumption of jurisdiction on the part of the Assessing Officer is invalid. 5.1 It was submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al or the spouse or to the minor children of such individual. It was submitted that in this case as many as seven residential units have been allotted in contravention of clauses (e) and (f) of section 80IB(10) of the Act and hence, the Assessing Officer was wholly justified in reopening the assessment as income chargeable to tax had escaped assessment. 6.1 It was submitted that the burden lies upon the assessee to claim only such deduction as is admissible, whereas in this case, the assessee has claimed deduction under section 80IB(10) of the Act despite the fact that more than one residential unit had been sold either to the same individual or to an individual and his spouse, which proves that the assessee has made a false claim. Referring to Explanation 1 to section 147 of the Act, it was submitted that the said explanation provides that production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. It was submitted that in this case, Explanation 1 would be attracted, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount to a full and true disclosure as envisaged under section 147 of the Act and, therefore, Explanation 1 to section 147 of the Act would be clearly attracted in the present case. It was submitted that therefore, the Assessing Officer has not committed any error in seeking to reopen the assessment of the petitioner beyond a period of four years from the end of the relevant assessment year. 7. In rejoinder, Mr. Manish Shah, learned advocate for the petitioner, invited the attention of the court to Form No.3CD, which is a statement of particulars required to be furnished under section 44AB of the Act and more particularly, to item No.26 thereof, which relates to deductions under Chapter VIA of the Act. Reference was made to Form No.10CCB, which is the audit report under section 80IB of the Act and more particularly, to item No.23 thereof, which relates to development and construction of housing projects, to submit that details as required under the Act and the rules had been duly furnished by the petitioner. It was submitted that there is no column in the said forms, which require the petitioner to state as to whether the purchasers are related parties. It was submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was no true and full disclosure is that the assessee had furnished untrue audit report in Form No.10CCB certified on 25.08.2012 stating the deduction claimed under section 80IB(10) of the Act. 9. In this case, the assessment year is 201213 and the notice under section 148 of the Act has been issued on 28.03.2018, which is clearly beyond a period of four years from the end of the said assessment year. Since earlier an assessment was framed under section 143(3) of the Act, the first proviso to section 147 of the Act would come into play which inter alia provides that no action can be taken under that section unless income chargeable to tax has escaped assessment by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 10. Therefore, the question that arises for consideration is whether there was any failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment. In this regard it may be pertinent to note that in the objections raised by the petitioner, it had requested the Assessing Officer vide it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... true material facts necessary for its assessment for the year under consideration as the reopening itself is based on the material furnished by the petitioner during the course of scrutiny proceedings pursuant to the Assessing Officer having called for the details, there is not even a whisper in that regard in the order disposing of the objections. Thus, the Assessing Officer has not dealt with the sole objection raised by the petitioner and has sidestepped the entire issue. 11. In the affidavitinreply filed by the respondent in response to the petition, it is stated that the petitioner had wrongly claimed deduction under section 80IB(10) of the Act with respect to the project in question. It is further averred that the material fact namely, selling of more than one residential unit to spouse and the same individual was never disclosed by the assessee in the original return or at the time of scrutiny assessment and that from the reply of the assessee, it is not clear that the assessee had sold more than one residential unit to spouse and to the same individual in contravention of section 80IB(10) of the Act. 12. In the context of the allegation that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Chapter VIA and had also enquired from the petitioner as to whether it has fulfilled the necessary criteria required for deduction under section 80IB(10) of the Act and to submit details and copies. In response to such notice, the petitioner replied that deduction claimed under Chapter VIA was ₹ 86,23,123/. It appears that pursuant to the details called for by the Assessing Officer, the assessee, vide letter dated 15.10.2014, inter alia furnished the following details: ( i) Statement in tabular form showing the details of buyers of Springwood Residency 1 Project of the entire 10 towers (160 flats, i.e. 96 3BHK and 64 2BHK flats) sold by Royal Infrastructure during the entire period of the Project i.e. F.Y. 2006-07 to F.Y. 2012-13 as desired by him in the last hearing held on 13.10.2014 and marked as Annexure3. ( ii) Brochure of Springwood Residency 1 Project and marked as Annexure6. ( iii) Audit Report in Form 10CCB for A.Y. 201213 and marked as Annexure7. 15. The petitioner had also furnished a statement showing the details of buyers, which included their names and addresses with PAN, income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 18. On a plain reading of section 80IB(10) of the Act, it is amply clear that one of the basic requirements for being eligible to claim deduction under section 80IB(10) of the Act as stipulated under clauses (e) and (f) thereof is that not more than one residential unit in the housing project can be allotted to any person not being an individual and in a case where a residential unit in a housing project is allotted to a person being an individual, no other residential unit in such housing project is allotted to the individual or his spouse, etc. Though the Assessing Officer had the opportunity to call for information as regards compliance of clauses (e) and (f) of section 80IB(10) of the Act, he, however, did not deem it fit to call for specific information to that effect from the petitioner and proceeded to assess the petitioner on the basis of the material before him. Under the circumstances, when the petitioner had disclosed all the material facts necessary for his assessment, but the Assessing Officer failed to consider the claim for deduction under section 80IB(10) of the Act in the context of clauses (e) and (f) thereof, it cannot be said that there was any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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