TMI Blog2022 (3) TMI 723X X X X Extracts X X X X X X X X Extracts X X X X ..... se [ 2013 (12) TMI 1725 - ITAT PUNE] it is held that notice under section 148 of the Act is bad in law and therefore, the consequential re-assessment is hereby by cancelled. Thus, the grounds of appeal by Revenue are dismissed. - ITA No.2173/PUN/2017 - - - Dated:- 15-3-2022 - Shri Partha Sarathi Chaudhury, JM And Dr. Dipak P. Ripote, AM For the Revenue : Shri S.P.Walimbe - DR For the Assessee : Shri Nikhil S Pathak - AR ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by the Revenue directed against the order of ld.Commissioner of Income Tax(Appeals)-6, Pune dated 01.05.2017 for the Assessment Year 2003-04. The Revenue raised the following grounds of appeal: 1. Whether on the facts and in the circumstances of the case and in law the Ld.CIT(A) is correct in holding the reopening of assessment u/s.147 as bad in law? 2. Whether on the facts and in the circumstances of the case and in law the Ld.CIT(A) is justified in not appreciating that the mistake in the original assessment due to erroneous construction or due to non-consideration of the conditions required to be eligible for claiming deduction u/s 80HHC were subsequently observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant pleads that the reopening would amount to change of opinion and relied on the Supreme Court decision in the case of CIT Vs. Kelvinator of India [2010] 320 ITR 561 (SC). The appellant also relied on the following deicison: a. IPCA Laboratories Ltd Vs. Gajanand Meena DCIT [2001] 251 ITR 416 (Bom). b. Bhor Industries Ltd Vs. ACIT ORS [2004] 267 ITR 335 (Bom). c. Desai Brothers Ltd Vs. ANR [2005] 272 ITR 335 (Bom). d. Hindustan Lever Ltd Vs. R.B.Wadkar, ACIT [2004] 268 ITR 332 (Bom) e. Mangalore Refinery Petrochemicals Ltd Vs. ACIT ORS [2006] 282 ITR 516 (Bom) f. Industan Petroleum Corporation Ltd Vs.DCIT ANR [2010] 328 ITR 534 (Bom) g. Prashant Project Ltd Vs. ACIT ORS [2011] 333 UTR 368 (Bom) h. Titanor Components Ltd Vs. ACIT ORS [2012] 343 ITR 0183 (Bom). 5.1.1 The appellant also relied on the decision of Pune Tribunal in the appellant s own case for A.Y. 2004-05 on identical facts where it was held that the issuance of notice u/s 147 and 148 is bad in law. 4. The ld.CIT(A) vide order dated 01.05.2017 held that reopening is bad in law. The relevant portion of the ld.CIT(A) is as under: 5.2 The appellant s submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt was completed u/s.143(3) of the Income tax Act, 1961 on 20/3/2006 determining total income of ₹ 63,67,32,540/- 2. On verification of case records it is seen that the assessee company had claimed a sum of ₹ 1,53,01,248/- as Professional and Consultancy charges. This amount includes a sum of ₹ 33,26,267/- paid as charges towards Alfa Laval separation. The same was allowed by the A.O. The said expenses could be claimed only in the year when demerges takes place. Since there was no demerger in the said year the allowance of ₹ 33,26,627/- has led to under assessment of income during the said Assessment Year. 3. Further, the assessee company was allowed deduction u/s.80HHC of the Income tax Act, 1961 of ₹ 7,81,53,240/-. The income on account of impact on financial activity amounting to ₹ 1,19,16,552/- should have been excluded from the Profit eligible for deduction u/s.80HHC of the Income tax Act, 1961. Due to the above omission there has been excess deduction u/s.80HHC of the Income tax Act, 1961 amounting to ₹ 16,99,667/-. 4. Both the points leading to short levy of tax of ₹ 18,4,7163/- (₹ 12,22,535/- + ₹ 6,2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the re-opening is based on change of opinion. All the material facts have been disclosed fully and truly before the AO during the original assessment proceedings. The ld.AR categorically stated that in the reasons recorded for reopening, the AO has not stated that assessee has failed to disclose fully and truly all material facts necessary for assessment. Since the reopening is after Four(04) years, as per section 147 of the Act, the assessment can be reopened only when assessee has failed to disclose fully and truly all material facts necessary for the assessment. The ld.AR relied on various case laws. The ld.AR stated that in assessee s own case for the A.Y. 2004-05, the ITAT Pune has held on identical facts that initiation of proceedings the issuance of notice under section 148 of the Act was bad in law. The relevant portion of the Hon ble ITAT order in assessee s own case is reproduced here as under: 13. In this background, one has to examine as to whether the initiation of proceedings under s. 147 of the Act is justified, which would depend on whether there is a failure on the part of the assessee to disclose fully and truly all material facts relating to the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invoking of s. 147 of the Act is sought to be justified. A similar argument has been answered by the Hon'ble Bombay High Court in the case of Titanor Components Ltd. (supra) by stating that there is a difference between a wrong claim made by the assessee after disclosing the full and true material facts and a wrong claim made by the assessee by withholding the material facts fully and truly. According to the Hon'ble High Court, it is only in the latter cases that an AO is entitled to proceed under s. 147 of the Act. In the present case, as we have concluded earlier, assessee has disclosed full and true material facts and even if the original assessment has resulted in allowing of a wrong claim it cannot be proceeded with by the AO under s. 147 of the Act because it is not a case where the claim has been made by the assessee by withholding the material facts fully and truly. 14. Therefore, in the present case, the condition precedent to exercise the jurisdiction to reopen the assessment beyond four years from the end of the relevant assessment year has not been fulfilled as there was no failure on the part of the assessee to disclose fully and truly all material facts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the reasons recorded for reopening, the assessing officer has not alleged that assessee has failed to disclose material facts truly and fully. It is also a fact that reopening has been done based on the record already available at the time of original assessment order. No new information has been received by the assessing officer. The CIT(A) in his order has demonstrated that during original assessment order the assessing officer has considered income on account of financial activity while calculating 80HHC deduction. 8.1 Before us, the AR filed copy of submission dated 10/01/2006 filed by the Assessee during the original assessment proceeding before the assessing officer Addl.CIT Range 8 ( paper book page 60-81). The assessee had submitted all the details during original assessment proceedings. Therefore, the reopening is merely based on Change of Opinion. Therefore, respectfully following the decision of Hon ble Bombay High Court in the case of Titanor Components Ltd. vs. ACIT (writ petition no.71 of 2005) and Hon ble ITAT s decision in assessee own case (ITA 1499/Pun/2012), it is held that notice under section 148 of the Act is bad in law and therefore, the consequential re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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