9911796707
TMI Blog2023 (3) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2012-13 wherein, it had claimed deduction under Section 80 JJAA under Chapter VI - A of the Income Tax Act, 1961, in respect of Rs.17,93,76,639/-, which represented additional wages paid to the software engineers who were understood and treated as ''workmen'' by the appellant for the purpose of claiming the benefits under Section 80 JJAA of the Income Tax Act, 1961. 3. The appellant's return was taken up for scrutiny and notice under Section 142 of the Income Tax Act, 1961 was issued on 01.01.2016. The 2nd respondent raised a query as to why a large deduction has been claimed under Chapter VI-A of the Income Tax Act. The appellant submitted a detailed reply to the said notice on 18.02.2016, wherein, reference was made to the provisions of Section 80 JJAA and submitted that the deduction under Section 80JJAA of the said Act is made only upon satisfying / complying with the conditions set out therein. The appellant stated that he had paid additional wages to the extent of Rs.59.79 Crores to new regular workmen employed during the year which has been debited in the Profit and Loss Account under the Head ''Salaries and Wages'' and claimed deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has claimed deduction u/s.80JJAA amounting to Rs.17,93,76,639/-. It was noticed that the assessee had treated many persons as a workmen, who were working in managerial or administrative capacity such as Senior Project Lead, Senior consultant, etc. As these employees are not regular ''workmen'', as contemplated in the Industrial Dispute Act (hereinafter read as I.D.Act), 1947, the payment made do not qualify for the deduction u/s.80JJAA of the I.T.Act. Further, the assessee failed to substantiate whether the said employees were actually receiving wages from the company less than Rs.6500 per month. As the said conditions (iii) &(iv) of the Section 2(s) of I.D.Act are not satisfied, the said payments do not qualify for deduction u/s.80JJAA of the I.T.Act. The intention of the legislature as per the finance Act, 2013 was to provide deduction on the wages paid to blue collar workers employed in industrial undertakings & not to white collar employees like the employees of the assessee company. Therefore, the payments made as wages to such employees who do not come under the purview of I.D.Act are also eligible for deduction u/s.80JJAA of the I.T.Act. Hence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'', and submitted that the Income Tax Appellate Tribunal had held that the applicability of wage limit of Rs.6500/- per month as per Industrial Disputes Act was applicable only to those employees employed in Supervisory capacity, while the deductions are claimed by the appellant in respect of employees who were not performing any supervisory, managerial or administrative functions. It was submitted that the above view had been upheld by the Bangalore and Chennai Income Tax Appellate Tribunal and thus judicial discipline requires the respondent to follow the same. 7. The 2nd respondent proceeded to reject the objections of the appellant dealing with each one of the objections raised vide letter dated 29.11.2017. The 2nd respondent submitted that the question of change of opinion would be an embargo against exercise of powers of reassessment only if an opinion was formed in the first place and an attempt was being made to change the same in exercise of the powers of reassessment. However, in the absence of any express finding in relation to the claim of deduction under Section 80JJAA, the defence of change of opinion may not be available to the appellant, while challenging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e restrictions contained in Sec.147 of the Income Tax Act, would not govern or control the issuance of notice under Section 148. b) The only requirement for issuance of notice under Section 148 is that it ought to be within the time limit prescribed under Section 149 of the Income Tax Act, 1961. c) The decision of the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd., v. Income Tax Officer and others reported in (2003) 1 SCC 72 only enables the assessee to seek reasons for reopening after filing the returns and the communication of reasons is merely to allow an assessee to participate in the reassessment proceedings by giving an effective reply. Importantly, the learned Single Judge proceeds to hold that over ruling of the objection in response to the notice u/s.148 is not an order u/s.147 of the Income Tax Act, 1961. d) That the learned Judge after comparing and contrasting the provisions of Section 34 of the Income Tax Act, 1922, vis-a-vis., 148 of the Income Tax Act, 1961, concludes that for issuing a notice u/s.148 of Income Tax Act, the Assessing Officer has to only satisfy the requirements of Sec.149 of the Income Tax Act. e) That Section 148 of Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iously and in conjunction and not disjunctively as being independent of each other as interpreted and understood by the learned Judge. d) It also appears to us that the judgment of the Supreme Court which mandates furnishing of reasons for reassessment when sought for, with an opportunity to the assessee to question the assumption of jurisdiction and casting an obligation on the assessing authority to dispose of such objection was not meant to be an empty formality or ritual without a purpose, but, was directed to ensure that the assessees do not have to go through the rigmarole of the entire process of reassessment, if the very assumption of the jurisdiction is bad. e) It is trite law that any proceeding which is lacking jurisdiction is a nullity and the discretion of judicial review would be exercised if it is shown that the proceedings are lacking jurisdiction. The learned Judge ought to have seen that the challenge to the proceedings dated 24.11.2017 was on the premise that the very assumption of jurisdiction was bad as it was on the basis of mere change of opinion which the Supreme Court has consistently held would not confer jurisdiction to exercise the powers of reassess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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