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TMI Blog2021 (10) TMI 418X X X X Extracts X X X X X X X X Extracts X X X X ..... onfirming the disallowance to the extent of Rs. 5179626/- u/s.80IA of the Income Tax Act, 1961, made by the Ld.A.O. 3. The appellant may be allowed to add, amend, alter or raise additional grounds of appeal. 3. The assessee in ground No. 1 has challenged the validity of the assessment framed under section 147 of the Act. 4. The assessee in the present case is a limited company and engaged in the business of civil construction and infrastructure development. The assessee filed its return of income dated 1st November 2004 claiming deduction of Rs. 84,63,208.00 under the provisions of section 80 IA of the Act which was allowed in the assessment framed under section 143(3) of the Act vide order dated 29th December 2006. 4.1 Subsequently, the AO found that the assessee was not eligible for deduction under section 80 IA(4) of the Act and therefore he initiated the proceedings by issuing notice under section 148 of the Act dated 15th March 2010 on account of escapement of income. The assessee challenged the reassessment proceedings initiated under section 147 of the Act vide letter dated 5th August 2010 which were disposed of by the AO vide order dated 8th October 2010 upholding the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO after referring to the explanation to section 80 IA(4) of the Act which evidences that proceedings were initiated under section 147 of the Act for the explanation to section 80 IA(4) of the Act. 9. We have heard the rival contentions of both the parties and perused the materials available on record. The Hon'ble Gujarat High Court in the case of Sadbhav Engineering Ltd versus DCIT reported in 45 taxmann.com 388 held that there cannot be any reassessment proceedings on the basis of any retrospective amendment made under the provisions of law. Any proceedings initiated based on the retrospective amendment will amount to mere change of opinion. The relevant finding of the Hon'ble High Court reads as under: In the present case, as could be noted from the material on record, the Assessing Officer on a detailed scrutiny had explained the claim made by the Assessing Officer under section 80- IA(4) of the Act. This was also challenged further before the Commissioner (Appeals) and the Tribunal. The sole question, therefore, is whether the reassessment proceedings can be initiated only on the basis of insertion of Explanation which had been substituted by the Finance (No. 2) Act, 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiating the reassessment proceedings. 9.3 Nevertheless, to adjudicate the issue on hand we have referred objection raised by the assessee against the initiation of the reassessment proceedings under section 147 of the Act. The objections were raised vide letter dated 5 August 2010 which are placed on pages 101 to 110 of the paper book. The relevant extract of the objections are reproduced as under: Sir we now refer to the validity of notice u/s 148 with the opinion of the case are as under the assessment u/s 143(3) was completed by the .learned Assistant Commissioner of Income tax after verifying all material .facts and thereafter to issue notice under section 148 is not proper because it is basically a change of opinion. As held in the case of Star India (p) Ltd. Vs. Commissioner of Central Excise. Ref No. (2006) 201 CTR (SC) 63: (2006) 260 ITR 321 (SC) : (2006) 150 Taxman 128 and similarly in the case of Danish Industries Ltd. Vs. income Tax Officer Ref No. (2004) 190 CTR (GuJ) 485: (2004) 271 ITR 340 (Guj): (2004) 140 Taxman 456 reassessment under section 147(a)- full and true disclosure - retrospective amendment, of law. Petitioner had claimed depreciation and investment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 and the following Explanation was inserted:- "For the removal of doubts, it is hereby declared that nothing contained in this section shall apply in relation to a business referred to in sub-section (4) which is in the nature of a works contract awarded by any person (including the Central or Sate Government) and executed by the undertaking or enterprise referred to in sub section (1)." As noted at the outset, the assesses worked as a contractor or a sub-contractor but did not fulfill the conditions prescribed u/s 80IA of the Income Tax Act, 1961; the assessee was found to have wrongly claimed deduction of Rs. 8463208 so the assessee was issued a notice u/s 148 of the Act. 9.5 From the above details, it is transpired that the reopening of the reassessment under section 147 of the Act was challenged by the assessee on the reasoning that explanation inserted to section 80IA(4) of the Act with retrospective effect. Likewise, the objections were disposed of based on the explanation inserted under section 80IA (4) for of the year under consideration. 9.6 Moving further, we note that the proceedings were also initiated under section 147 of the Act in the own case of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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