TMI Blog2023 (8) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... its income for the previous years was given in the audit report on requisite form No.10-CCB as required u/s80-IA (7)/80-IC of the Act. Also further revealed from the record produced with regard to A.Y. 2008-09 that the details of the contract which was executed between the Government of Himachal Pradesh and petitioner-assessee had also been provided to the assessing officer which contained information that the contract was for infrastructural development. The assessee is even shown to have appended a note with the return for the year 2008-09 pointing out that a composite agreement had been entered into between the Government of Himachal Pradesh and itself and the work was awarded to it on built, operate and transfer basis. In our opinion, all the primary facts had been disclosed by the petitioner and its duty did not extend beyond the full and truthful disclosure of primary facts and once such facts were put before the assessing authority, the assessee was not required to give any further assistance. Then it was for the assessing officer to make further inquires and draw inferences and if he did not do so at the time of framing original assessment, then it could not be conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s have been preferred by the petitioner M/s Kaveri Infrastructure Pvt. Ltd. (JV) Unipro Techno Infrastructure which is a partnership firm and is an assessee under the Income Tax Act, 1961 (for short the Act ). The subject matter of CWP No.4291 of 2016 pertains to the assessment year (for short A.Y. ) 2008-09, subject matter of CWP No.4387 of 2016 pertains to the A.Y. 2009-10, subject matter of CWP No. 4407 of 2016 pertains to the A.Y. 2010-11 whereas the subject matter of CWP No.4395 of 2016 pertains to A.Y. 2011-12 respectively. Since in all these writ petitions, the facts are identical and similar substantial questions of law have arisen for consideration, therefore, they are heard together and are being decided by this common judgment. 2. The common facts leading to filing of the above-mentioned writ petitions are that the petitioner-Company which is primarily engaged in the development, maintenance and operation of development of infrastructural facilities had been awarded a contract of infrastructure development of providing Lift Water Supply Scheme to PC Habitation of some constituencies in District Hamirpur and District Kangra (Himachal Pradesh) for operation and mainte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years. 3. The respondents filed written statements in all the petitions submitting that the statute permitted re-opening of a case of assessment after four years. The notices dated 27.02.2015 had been validly issued against the petitioner. The petitioner had been given due opportunity to file replies to the same. The objections filed by it were duly considered and were rightly rejected by passing well reasoned speaking orders. There was no jurisdictional defect in granting sanction for re-opening the assessment. There was tangible material on record to show that the income of petitioner for the assessment years 2008-09 to 2011-12 had escaped assessment within the meaning of Section 147 of the Act. It was alleged that the petitioner was infact engaged in works contract and not in development of infrastructure sector as it was provided only works contract service for the Government of Himachal Pradesh and was not making any investment itself and was just performing a part of composite contract with no independence to itself with respect to design and development. It was further alleged that since these facts had come to the notice of the assessing officer only while assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclose all material facts. The impugned notices were issued and impugned order dated 10.02.2016 was passed qua the assessment years 2008-09 to 2011-12 only by way of change of opinion which was not permissible in the eye of law. Therefore, it was urged that the writ petitions filed by the petitioner deserved to be allowed and the impugned notices and order dated 10.02.2016 were liable to be quashed. To fortify her argument, learned counsel for the petitioner placed reliance upon authorities cited as Azim Premji Trustee Company Pvt. Ltd. v. Principal Commissioner of Income Tax-2 and others , (2022) 448 ITR (Karn.), Thanthi Trust v. ITO , (1989) 177 ITR 307 (Madras), Murlidhar Bhagwandas and Co. v. CIT , (1990) 181 ITR 319 (Bom), Commissioner of Income-tax, Delhi v. Kelvinator of India Ltd. , (2010) 320 ITR 561, New Delhi Television Ltd. v. Deputy Commissioner of Income Tax , (2020) 116 taxmann.com 151 (SC) and State Bank of Patiala v. Commissioner of Income-tax, (2015) 59 taxmann.com 391 (Punjab Haryana). 7. Per contra, it was submitted by learned counsel representing the revenue that the assessment for the relevant assessment years had been opened under Section 148 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment. As per proviso 1 to this section, where an assessment under Section 143 (3) or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under Section 139 or in response to the notice issued under Section 142 (1) or Section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. 10. Further as per Section 149 of the Act, no notice under Section 148 shall be issued for the relevant assessment year, if four years have elapsed from the end of the such assessment year. 11. On a collective reading of above sections, it is clear that the right to take action under Section 147 is subject to the following conditions:- (i) The Income Tax Officer should have reason to believe that the income chargeable to tax has escaped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the purpose of assessment. Failure on the part of the assessee to disclose all facts which are material, relevant and germane for the purpose of assessment is a sine qua non for the purpose of re-opening of the assessment. In other words, in the absence of any material to show that the facts which are not fully and truly disclosed by the assessee were material, relevant and germane for the purpose of assessment which had been concluded by the revenue, the revenue does not have jurisdiction and authority of law to re-open the assessment beyond the prescribed period of four years. The burden is on the revenue to show that the escapement has occurred on account of failure on the part of the assessee to disclose the full particulars of the income. It is equally well settled that the assessee is under a duty or obligation to disclose only basic and primary facts relevant to the assessment and thereafter, it is for the assessing officer to make further inquiries and draw inferences but if he does not do so for any reason, then revenue cannot contend that there was any failure or omission on the part of the assessee. 14. In the instant case, the petitioner had been allowed deductio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd once such facts were put before the assessing authority, the assessee was not required to give any further assistance. Then it was for the assessing officer to make further inquires and draw inferences and if he did not do so at the time of framing original assessment, then it could not be contended by the revenue that there was any failure or omission on the part of the assessee or that he had not fully disclosed the facts. It is only after the detailed scrutiny, after considering all the documents and on being satisfied that the assessee was held entitled to claim deduction under Section 80IA of the Act, that the assessment order for the relevant year had been passed. It cannot be stated that the terms of contract and the nature of the contract between them had come to the notice of the assessing officer only while framing assessment for the A.Y. 2012- 13. The entire claim of the petitioner for deduction under Section 80IA of the Act had been examined and allowed by the assessing officer at the time of framing assessment for the relevant previous years. As such, in our opinion, it could not be claimed by the revenue that the assessee had not fully disclosed the facts. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er had reason to believe that there was escapement of income. As discussed above, all the primary facts necessary for the assessment had undisputedly been disclosed by the petitioner qua the A.Y. 2008-09. In our opinion by issuing notice beyond a period of four years from completion of that assessment, the revenue could not take benefit of extended period of limitation. Reliance in this context can be made to Principal Commissioner of Income-tax-2 v. L T Ltd. , (2020) 113 taxmann.com 47 (SC), wherein it was held by Apex Court that re-assessment proceedings initiated after four years from the end of the relevant year only on the basis of change of opinion, are liable to be set aside. Therefore, qua the A.Y. 2008-09 the re-assessment proceedings initiated beyond four years have become liable to be set aside on the ground of change of opinion and being time barred as well. Reliance can also be placed upon New Delhi Television Ltd.'s case (Supra) wherein similar observations were made. 17. Further, revenue was also required to show that there was direct nexus or live link between the material coming to the notice of the assessing officer or there was a formation of reasonab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 80IA of the Act accompanied by requisite audit report. The assessment proceedings were completed after making usual formalities and subsequently notice under Section 148 was issued as the assessing officer was of the opinion that the assessee was a contractor and could not be called a developer of any infrastructural facility and had wrongly claimed deduction under Section 80IA. It was held by High Court of Gujarat that since all the material regarding its activities had already been disclosed by the assessee and in spite of such disclosure, it had been given benefit of exemption under Section 80IA of the Act by the assessing officer, therefore, such notice was liable to be quashed, as the reasoning given by the assessing officer was based on the same material on which the original assessments had been framed. It is explicit from the record of the instant appeals that the assessing officer in this case had re-opened assessments by mere change of opinion with regard to the nature of contract between the assessee and Government of Himachal Pradesh, the contents of which were disclosed by the petitioner at the time of framing of original assessments for previous four consecutive as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently drawing an inference by changing opinion. As such, it emerges that the re-assessment proceedings on account of change of opinion and on the ground that the petitioner-assessee had failed to disclose truly and fully all material facts for assessment before the assessing officer could not be initiated as no reasonable grounds could be disclosed by the revenue for initiating the same. In this regard, we also place reliance upon S.Narayanappa and others v. Commissioner of Income Tax, Bangalore , (1967) 1 SCR 590 (SC), wherein the Apex Court had laid down that if infact there are some reasonable grounds for Income Tax Officer to believe that there had been any non-disclosure as regards any fact, which could have a material bearing on the question of under assessment, that would be sufficient to give jurisdiction to the Income Tax Officer to issue notice under Section 34 (now Section 148). The Income Tax Officer is bound to disclose to the assessee the materials on the basis of which the belief that the income had escaped assessment was entertained. 19. In view of the discussion as made above, we have no hesitation to conclude that the jurisdictional condition precedent as laid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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