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TMI Blog2018 (2) TMI 2114X X X X Extracts X X X X X X X X Extracts X X X X ..... tset. As far as the admissibility of additional grounds are concerned, being of the view that the issue raised in the additional grounds, can be decided on the basis of facts and materials available on record and do not require investigation into fresh facts, we admit the additional grounds for adjudication. 3. Brief facts necessary and relevant for deciding the additional ground are that the assessee is a partnership firm engaged in the business of builders and developers of housing projects. For the assessment year under dispute, the assessee filed its return of Income on 31.10.2007 declaring 'nil' income after claiming deduction u/s. 801B(10). Assessment in the case of the assessee was originally completed u/s. 143(3) of the Act vide order dated 23.12.2009 accepting the income returned by the assessee. Subsequently, the Assessing Officer re-opened the assessment u/s. 147 of the Act on the reasoning that the assessee was not eligible to claim deduction u/s 801B(10) as its housing project on which the said deduction was claimed was not completed on or before 31.03.2009. Accordingly, the Assessing Officer issued notice u/s. 148 of the Act to the assessee. In response to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, undisputedly assessment in case of the assessee for the impugned assessment year was originally completed u/s. 143(3) of the Act on 23.12.2009. It is also a fact on record that the notice u/s. 148 of the Act was issued by the Assessing Officer on 17.09.2012. Therefore, there is no doubt that the notice u/s. 148 of the Act was issued after the expiry of four years from the end of the relevant assessment year. Section 151(1) of the Act postulates sanction by prescribed authority for issuance of notice u/s. 148 of the Act by the Assessing Officer. As per the proviso to section 151(1) of the Act as existed during the relevant assessment year, in case of an assessee where assessment u/s. 143(3) has already been completed, no notice u/s. 148 can be issued after expiry of four years from the end of the relevant assessment year, unless, the Principal Chief Commissioner or the Chief Commissioner or Principal Commissioner or Commissioner is satisfied on the reasons record by the Assessing Officer that it is a fit case for issue of such notice. From perusal of the notice issued u/s. 148 of the Act dated 17.09.2012, a copy of which is placed at page 37 of the paper-book, it is very much ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we admit the additional grounds for adjudication. 9. Briefly, the facts are, in the impugned assessment year, the assessee filed its return of income on 08.09.2008 declaring nil income after claiming deduction u/s. 80IB(10). The assessment in the case of the assessee was completed originally on 30.12.2010 u/s. 143(3) of the Act accepting the income returned. Subsequently, the Assessing Officer being of the view that the housing project for which the assessee claimed deduction u/s. 801B(10) was not completed within the cut-off date i.e., 31.03.2009, is not eligible to avail deduction u/s. 80IB(10). Since, according to the Assessing Officer, allowance of assessee's claim of deduction u/s. 801B(10) has resulted in escapement of income, he reopened the assessment u/s. 147 of the Act by issuing notice u/s. 148 on 17.09.2012. Ultimately, the Assessing Officer completed the assessment, vide order dated 31.12.2013 u/s. 143(3) r.w.s. 147 of the Act, disallowing the deduction claimed u/s. 801B(10). 10. The learned CIT(A) also upheld the disallowance while deciding the appeal filed by the assessee. 11. Challenging the validity of the re-opening of assessment, the learned AR submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. The learned DR submitted, sufficiency of reasons recorded by the AO for re-opening of assessment cannot be challenged. 13. We have considered rival submissions and perused materials on record. We have also examined the case laws cited before us. Undisputedly, in the present case, assessment in case of the assessee was originally completed after scrutiny under section 143(3) of the Act vide order dated 30% December 2010. Though, the re-opening of assessment under section 147 of the Act for the impugned assessment year is before the expiry of four years from the relevant assessment year, however, the validity of the reopening of assessment has to be tested keeping in view the following factors. Firstly, whether the issue on which the assessment was re-opened as per the reasons recorded was examined at the time of original assessment; secondly, whether the formation of belief that income has escaped assessment has a live link with the materials on record and thirdly, whether the re-opening of assessment under section 147 of the Act is on the basis of some tangible material. Before proceeding further on the issue, it is necessary to look into the reasons for re-opening of assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 143(3) of the Act has examined the issue relating to assessee's claim of deduction under section 801B(10) of the Act relating to housing project. Notably, the assessee in the return of income filed for the impugned assessment year has claimed deduction under section 801B(10) of the Act and as required under the statute has also furnished an audit report in form no.10CCB in support of the deduction claimed. In course of the original assessment proceedings, the Assessing Officer when wanted to examine the eligibility of the assessee's claim under section 801B(10) of the Act, the assessee vide letter dated 25" November 2010, has submitted its reply not only answering the queries raised by the Assessing Officer but has also furnished all supporting documentary evidences in support of the claim of deduction. The Assessing Officer while completing the assessment under section 143(3) of the Act on 30" December 2010, allowed assessee's claim of deduction under section 80IB(10) in respect of the housing project after examining the documentary evidences as well as being satisfied with the fact that the assessee has fulfilled the conditions for claiming deduction unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f original assessment the Assessing Officer formed the belief that income chargeable to tax has escaped assessment as the assessee was not eligible to avail deduction under section 801B(10) due to non-completion of the housing project before 31% March 2009. Even, letter dated 17th October 2013 issued by the Assessing Officer during the re-assessment proceedings(paragraph-3), a copy of which is at Page-32 of the paper book, clearly demonstrates that only on re-examining the documents submitted by the assessee in course of original assessment proceedings in support of deduction claimed under section 801B(10), he has formed a belief that the assessee was not eligible to claim such deduction as the housing project was not completed before 31st March 2009. Thus, the aforesaid facts available on record clearly establish that there was no tangible material available before the Assessing Officer at the time of recording reasons for reopening the assessment that income chargeable to tax has either escaped assessment or has been under assessed. It is evident, on re examination of the very same material considered by the Assessing Officer while allowing assessee's claim of deduction under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on re-appraisal of the material available at the time of original assessment the Assessing Officer has reopened the assessment under section 147 of the Act by forming a belief that the assessee is not eligible to claim deduction under section 80IB(10) of the Act due to non-completion of the project within the stipulated time. Thus, consideration of facts and material on record in the light of well settled legal principle leads to the irresistible conclusion that the Assessing Officer has re-opened the assessment on a mere change of opinion without having in his possession any tangible material. Therefore, it amounts to review of the original assessment order passed in case of the assessee, hence, is legally impermissible. Therefore, we are of the considered opinion that re-opening assessment under section 147 of the Act in the instant case is not valid; consequently, the impugned assessment order passed in pursuance thereto is also invalid and has to be quashed. Accordingly, we do so. 17. In view of our decision on the additional grounds as aforesaid, the grounds raised on merit are of mere academic interest, hence, not adjudicated. 18. In the result, assessee's appeal is al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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