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TMI Blog2020 (9) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... and TCA Nos.973 & 974 of 2013 have been filed against the order passed in ITA No.2121/Mds/2011 (for the assessment year 2005-06) and Cross Objection No.17/Mds/2012. 4. The brief facts relevant to the case of TCA.No.972 of 2013 are as follows:- 4.1. The assessee is a company promoted as a joint venture by M/s TIDCO & M/s ELCOT and both are Government of Tamil Nadu Undertakings. Assessee is engaged in developing, operating and maintaining information technology parks and the name of the park developed, maintained and operated during the relevant previous year was "Tidel Park". Assessee has obtained approval for setting up industrial park from the Ministry of Industry, Government of India. CBDT had also notified it as an industrial park under section 80IA(iii) of the Act. 4.2. For the relevant Assessment Year, the assessee filed its return declaring an income of Rs. 76,67,750/- and claimed deduction of Rs. 6,73,15,795/- under section 80-IA (4)(iii) of the Income Tax Act. Thereafter the assessment was completed on 10.03.2006 under section 143(3) of the Act. On 26.03.2008, assessee was served with a notice proposing to reopen the assessment. The assessee, in its reply filed on 17.04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt to disclosure required under section 147 of the Act, rejected the claim of the assessee. 4.5. Against the said order, the Assessee went on appeal to the CIT(A), assailing the re-assessment as well as the denial of deduction under section 80-IA of the Act. According to the assessee, reopening of assessment, which was based on a change of opinion and that too, after four years from the end of the relevant Assessment Year, was not proper. The CIT(A) allowed the appeal of the assessee on the ground that there was no failure on the part of the assessee to disclose fully and truly the material facts required for the assessment and thus held that the reassessment proceedings was invalid. 4.6. Aggrieved by the order of the CIT(A), the Revenue had filed an appeal before the ITAT which had rejected the appeal on the grounds that there was no tangible material with the Assessing Officer for taking a different view and that resorting to reopening of assessment was based on change of opinion which was not possible and thus, the very basis for assumption of jurisdiction for reopening of assessment was absent and upheld the finding of CIT(A) and dismissed the appela filed by the Revenue. 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3B in the original assessment completed on 17.03.2010? 2.Whether on the facts and circumstances of the case, the assessee is eligibile for deduction under Section 80IA on the lease rental income from Industrial Park to be assessed under the head Profits and gains of Business or Profession?" 6.2. The appellant/department in TCA.Nos.973 & 974 of 2013 suggested the following substantial questions of law:- "1.Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in invalidating the reopening of the assessment? 2.Whether on the facts and in the circumstances of the case, the assessee is eligibile for deduction under Section 80IA on the lease rental income from Industrial Park to be assessed under the head Profits and gains of Business or Profession?" 7. The learned counsel appearing for the appellant submitted that the deduction under Section 80IA could be available only for the profits derived from developing, operating and maintaining facilities of the nature mentioned therein and could not be applied for rentals received from property. Therefore, he contended that in the present case, the lease rentals received by the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial park units, which is eligible for deduction. Therefore, the lease rentals received could be treated as business income and not as an income derived from the house properties. In this regard, the Counsel referred this Court's Judgment in the case of CIT vs. M/s. Elnet Technologies Ltd., passed in TCA.Nos.2336 & 2623 of 2006, dated 09.10.2012. 11. The learned counsel also referred to another Judgment, which was rendered by a co-ordinate bench of this Court in the case of CIT vs. Chennai Properties and Investments Ltd. He contended that the income of lease rental laid on and from the house properties could be considered only as income from the business and not as income from the house properties. He further submitted that it is well a settled principle that the lease rental income derived from the Software Park could be considered only as income from the business and not income from the house properties as contended by the department. 12. The learned counsel for the respondent/assessee contended that the assessment has been completed on 31.03.2008, for the assessment year 2003-04, whereas the notice for re-assessment proceeding under Sections 147 and 148 of the Act has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anything in the order as to what was the object of the assessee company etc., It shows that the Assessing Officer, without application of mind, had passed the re-assessment order, with assumption, presumption and surmise, which will not be permissible under any of the statute. We also tried to find something in statutes to support the finding of the Assessing Officer, but found none. 17. Further, both the CIT(A)-VI and the Tribunal have thoroughly scrutinised the entire facts and passed the order. The original assessment order was passed by the Assessing Officer after taking into consideration of all the material facts. During the course of the re-assessment proceeding also, the Assessing Officer has not found any tangible material by which income has escaped from the assessment. Therefore, we are of the opinion that without any application of mind, the Assessing Officer re-opened the assessment under the pretext that income has escaped assessment and passed the reassessment order under Section 147, which is a patent error committed by the Assessing Officer. Under these circumstances, we do not find any merit in all these three appeals filed by the Revenue and the same are liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealment on material facts on the part of the Assessee. The department tried to provide its second opinion, under that pretext the original assessment proceedings of the Assessing Officer was sought to be re-opened without providing any opinion with respect to the rental income. We would stress upon to state that the department should not have come to the conclusion and re-opened the assessment under Sections 147 and 148 of the Act under the pretext that the Assessing Officer has not provided any opinion. In fact, the Assessing Officers cannot make any assessment without forming any opinion and pass the assessment order. Therefore, the question of the Assessing Officer failing to provide any opinion does not arise. Accordingly, on this point also, the appeals of the department are liable to be dismissed. 22. At this juncture, we would like to stress that the re-assessment proceedings under Section 147 of the Act do not provide for re-assessment on a mere change of opinion. The re-assessment on a mere of change of opinion is not permissible under law. Such change of opinion amounts to review of the order of the assessment, which is not permissible under law. In support of our opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he said expression and deleted the word "opinion"on the ground that it would vest arbitrary powers in the Assessing Officer. We quote herein below the relevant portion of Circular No.549, dated 31.10.1989, which reads as follows:- "7.2. Amendment made by the Amending Act, 1989 to reintroduce the expression 'reason to believe' in section 147.- A number of representations were received against the omission of the words 'reason to believe' from section 147 and their substitution by the 'opinion' of the Assessing Officer. It was pointed out that the meaning of the expression, 'reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing , is of the opinion'. Other provisions of the new section 147, however, remain the same." " 23. In view of the reasons stated ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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