TMI Blog2019 (8) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... is very apparent that the AO, at the stage of finalisation of assessment, had very clearly addressed the issue as to whether the transaction of sale of shares of an Indian company to a foreign company, in the facts and circumstances of the present case, constituted an export and consequently the proceeds were deductible u/s 80HHC. Both, the Commissioner (Appeals), as well as the ITAT, have recorded concurrent findings of fact that the aforesaid action on the part of the AO amounts to 'acting under dictation'. The material on record does indicate that there was no independent application of mind on the part of the AO and the notice proposing reassessment was issued reeling under the dictation from the CIT who was, admittedly, his superior officer. In such circumstances, there is no good ground to interfere with the impugned Judgment and Order. According to us, is a clear case of the AO merely changing his opinion or having a second thought on the basis of materials on record and that too reluctantly and reeling under the dictation from the superior officer. Accordingly, we are satisfied that there is no case made out to interfere with the impugned Judgment and Order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of deduction u/s. 80HHC on the sale proceeds received in convertible foreign exchange on the sale of 1,70,032 shares of M/s. Chowgule Steamships Ltd. to M/s. International Finance Corporation, Washington, USA, though the business of the assessee company is only buying and selling of shares and not involved in any trading or manufacturing of goods or merchandise as per the provisions of Sec. 80HHC? 3. The challenge in this Tax Appeal is to the Judgment and Order dated 3rd August, 2007 made by the Income Tax Appellate Tribunal (ITAT) in proceedings ITA No.228/PNJ/2002 (impugned Judgment and Order). By the impugned Judgment and Order, the ITAT has confirmed the order dated 5/8/2002 made by the Commissioner (Appeals) quashing the re-opening of assessment by the Assessing Officer in respect of the return of income filed by the Respondent-Assessee for the Assessment Year 1995-96. 4. In this case, the Respondent-Assessee filed return of income for the Assessment Year 1995-96 on 29/3/1996. By order dated 2nd June, 1997, the Assessing Officer completed the assessment under Section 143(3) of the Income Tax Act, 1961 (IT Act). However, on 17/2/2000, a notice was issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o law relating to and/or having a bearing on the assessment, the Assessing Officer is perfectly competent to reopen the assessment. She submits that this is the view taken by the Hon'ble Supreme Court in the case of Larsen and Toubro Limited vs. State of Jharkhand and others 2017 (13) SCC 780. 10. Ms. Razaq submits that this Court in the case of IPCA Laboratories Ltd. vs. Gajanand Meena, Deputy Commissioner of Income-tax [2001] 251 ITR 420 (Bombay) had sustained a notice for reopening of assessment where the Assessee had claimed excessive deduction under Section 80HHC. She submits that the view taken by the Commissioner (Appeals) and the ITAT is contrary to the law laid down by the Hon'ble Supreme Court in Larsen and Toubro Limited (supra) and by this Court in IPCA Laboratories Ltd. (supra). For all these reasons, she submits that the substantial questions of law at (A) and (B) are liable to be answered in favour of the Revenue and against the Respondent-Assessee. 11. Ms. Razaq submits that in the present case, the ITAT has not even adverted to the issue as to whether the Assessee, who is admittedly an investment company, was justified in claiming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and order warrants no interference whatsoever. 15. The rival contentions now fall for our determination. 16. In the present case, as noted earlier, return filed by the Assessee claiming deduction under Section 80HHC of the IT Act was initially accepted by the Assessing Officer in terms of Section 143(1) (a) of the IT Act. The return was, thereafter, selected for scrutiny by issuing notice under Section 143(2) and Section 142(1) of the IT Act. In fact, notice dated 21.06.1996 was issued to the Assessee under Section 142(1) of the IT Act, by which the Assessing Officer required the Assessee to justify its claim of sale of shares to parties outside India as qualifying to be regarded as 'export' and consequently deductible under Section 80HHC of the IT Act. The Assessing Officer required the Assessee to furnish details along with receipt of convertible foreign exchange, details of custom clearance, Reserve Bank of India clearance, if any, in relation of the transactions in question. By a further letter dated 27th June, 1996, the Assessing Officer also required the Assessee to furnish particulars, including the name and other details of the foreign company to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transaction was screened not only in the context of the Companies Act, 1956, but also from the context of Foreign Exchange Regulation Act, 1973 since, there was no definition of 'export' under the IT Act. Despite a strong reply to the audit objection, the Assessing Officer, upon receipt of letter dated 16th February, 2000 from the Commissioner of Income Tax requiring him to take 'remedial action forthwith', vide notice dated 17th February, 2000 i.e. on the very next day, issued a notice under Section 148 of the IT Act, seeking to reopen the assessment. 22. Both, the Commissioner (Appeals), as well as the ITAT, have recorded concurrent findings of fact that the aforesaid action on the part of the Assessing Officer amounts to 'acting under dictation'. The material on record does indicate that there was no independent application of mind on the part of the Assessing Officer and the notice proposing reassessment was issued reeling under the dictation from the Commissioner of Income-tax who was, admittedly, his superior officer. In such circumstances, there is no good ground to interfere with the impugned Judgment and Order. 23. In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vations in Larsen and Toubro Limited (supra), upon which considerable emphasis was placed by Ms Razaq, would assist the case of the Revenue. In fact, in paragraph 21 of the report relied upon by Ms. Razaq, the Apex Court has noted that mere change of opinion or having second thought about it by the competent authority on the same set of facts and materials on record does not constitute information for the purposes of reopening of assessment. This, according to us, is a clear case of the Assessing Officer merely changing his opinion or having a second thought on the basis of materials on record and that too reluctantly and reeling under the dictation from the superior officer. Accordingly, we are satisfied that there is no case made out to interfere with the impugned Judgment and Order. 26. The decision of this Court in the case of IPCA Laboratories Ltd. (supra) also turns on its own facts, where the Assessing Officer had overlooked the meaning of the word 'profit' as appearing in Section 80HHC(3)(c) of the IT Act. It is in that context that the Division Bench of this Court held that reopening of the assessment was not based upon a mere change of opinion. T ..... X X X X Extracts X X X X X X X X Extracts X X X X
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