TMI Blog2019 (7) TMI 1997X X X X Extracts X X X X X X X X Extracts X X X X ..... al mistake. Moreover, the Ld. DR has also invited our attention to the copy of the order sheet entry dated 15.12.2015 to show that the copy of the reasons recorded was duly supplied to the assessee. Even the assessee has also placed on record the copy of the application dated 11.12.2015 moved by the Chartered Accountant of the assessee to supply the copy of reasons recorded, which were duly supplied to the assessee. Whether assessment reopened after the expiry of four years from the end of the relevant assessment year and that there was no failure on the part of the assessee to disclose fully and truly all material facts? - A perusal of the reasons recorded by the A.O. reveals that the A.O. has disputed eligibility of the assessee to claim deduction u/s 35AD of the Act. During the assessment proceedings for assessment year 2012-13, the A.O. noticed that the assessee had claimed deduction u/s 35AD of the Act while the assessee had been running its business for so many years. A.O. was of the view that the deduction u/s 35AD of the Act could be allowed only for prior period of commencement of the specified business. There is no allegation that the assessee had not fully and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a, CA For the Revenue : Shri Ashish Gupta, CIT (DR) ORDER PER SANJAY GARG, JUDICIAL MEMBER: The present appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals), Panchkula [(hereinafter referred to as CIT(A) ] dated 20.10.2016, passed u/s 250(6) of the Income Tax Act, 1961 (in short Act ). 2. The assessee in this appeal has taken the following grounds of appeal: 1. That on the facts and in the circumstances of the case the Learned CIT (A) Panchkula has erred in law and facts in upholding the contention of the learned AO for wrong initiation of the proceedings u/s 148 of the Act for the assessment year 2010-11 when the reasons to believe have been recorded for the assessment year 2014-15 and no reasons to believe supplied for the assessment year 201011. 2. That on the facts and in the circumstances of the case the Learned CIT (A) Panchkula has erred in law and facts in upholding the contention of the learned A O for wrong initiation of the proceedings u/s 148 of the Act without compliance of the proviso to Section 147 as there is no allegation in the reasons recorded to issue the notice u/s 148 that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28.10.2015 is bad in the eyes of law and be declared as null and void. 2. That reasons for initiating proceedings u/s 147 of the Income tax Act, 1961 to issue notice u/s 148 were not supplied to the appellant for which the sanction was obtained from the Principal CIT Panchkula on 15.10.2015. Ground No. 1: 4. Ground No.1 is a legal ground, vide which the assessee has contested the validity of reopening of the assessment by the A.O. invoking the provisions of section 147 read with section 148 of the Act alleging that the A.O. has recorded the reasons to believe that the income of the assessee has escaped assessment for assessment year 2014-15, whereas on the basis of said reasons recorded, the assessment for the year under consideration i.e. assessment year 2010-11 has been reopened. That even the reasons to believe have not been supplied to the assessee. 5. We have heard the rival contentions on this issue. The Ld. DR in this respect has invited our attention to page Nos.4 to 8 of the Paper Book filed by him and submitted that the A.O. has recorded the reasons that the income of the assessee has escaped assessment for assessment year 2010-11 i.e. the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en done validly in this case as it has come to the knowledge of the A.O. that the income of the assessee had escaped assessment. 6. We have considered the rival contentions. As per the 1st proviso to section 147 of the Act, the reopening/re-assessment can be resorted to only if the income chargeable to tax has escaped assessment on account of any of the following failure on the part of the assessee : a) Making return u/s 139 or in response to notice u/s 142 or notice u/s 148. b) To disclose fully and truly all material facts necessary to assessment. 7. The undisputed facts in this case are that: a) The impugned assessment year is assessment year 2010-11 b) Initially, the assessment u/s 143(3) for the said year had been made vide order dated 27.03.2013 c) Notice u/s 148 was issued on 28.10.2015. 8. It is evident from the above that re-assessment proceedings were initiated after the expiry of four years from the end of the relevant assessment year and assessment u/s 143(3) had already been framed on the assessee. In such factual circumstances, it is only in the conditions stipulated in the 1st proviso to section 147 that the re-assessment proceedings can be re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year. Hence, it cannot be said that no information had come to the knowledge of the A.O. or that it was a case of change of opinion. Though before forming the opinion, the A.O. has also noted that the aforesaid issue escaped the attention of the A.O. for the year under consideration and the A.O. was of the view that the assessee was not entitled to the aforesaid claim of deduction u/s 35AD of the Act. In view of this, it cannot be said that it is a case of change of opinion or that no tangible information had come into the possession of the A.O. to form the belief of escapement of income for the year under consideration. 10. Following the above decision in the own case of the assessee for subsequent assessment years, these grounds of appeal are accordingly, dismissed. Ground No.5: 11. Vide ground No. 5, the assessee has pleaded that the A.O. has made the assessment in question without disposing off one of the preliminary objections i.e. preliminary objection No. 6 taken by the assessee. The Ld.Counsel for the asssessee himself has placed on the file the order dated 17.2.2018 of the A.O. on the preliminary objections. We find that the plea taken by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holly and exclusively, for the purposes of any specified business, shall be allowed as deduction during the previous year in which he commences operations of his specified business, if (a) the expenditure is incurred prior to the commencement of its operations; and (b) the amount is capitalised in the books of account of the assessee on the date of commencement of its operations. 12. A perusal of the above provisions of Section 35AD of the Act reveals that assessee is eligible to claim deduction in respect of capital expenditure if the same is incurred wholly and exclusively for the purpose of any specified business carried out by him during the previous year in which such expenditure is incurred. However, in cases where such expenditure is incurred prior to the commencement of its operations by the assessee and amount is capitalized in the books of account of the assessee on the date of commencement of operations, then such expenditure is allowable as deduction in the previous year in which the assessee commences operations of his specified business. 13. In our view, the lower authorities have wrongly interpreted the relevant provisions of the Act. There ..... X X X X Extracts X X X X X X X X Extracts X X X X
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