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TMI Blog2024 (7) TMI 794X X X X Extracts X X X X X X X X Extracts X X X X ..... hallenged the notice dated 19.03.2020 issued under section 148 of the Income Tax Act,1961 [for short 'the Act'] for A.Y. 2014-15. 5. The petitioner is engaged in the business of manufacturing and cut of polished diamond on job work basis and trading of diamonds and power generation through windmill. 5.1 During the Financial Year 2013-14 relevant to A.Y. 2014-15, the tax audit report of the petitioner contained various disclosures relating to deduction under section 35DD of the Act [i.e. amortization of expenditure in case of amalgamation or demerger], and deduction of Rs. 76,27,934/- under section 80IA(4)(iv) of the Act. 5.2 The petitioner filed return of income for A.Y.2014-15 on 25.09.2014 declaring total income at Rs. 2,76,59,430/- after claiming amalgamation expenses and deduction under section 80IA(4)(iv) of the Act. 5.3 Case of the petitioner was selected for scrutiny assessment. The Assessing Officer called for various details which were duly furnished by the petitioner. The Assessing Officer issued notice dated 19.04.2016 under section 142(1) of the Act calling upon the petitioner to provide copy of balancesheet, Profit and Loss Account, Tax Audit Report etc. which were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2012, to the assessee M/s. FACETS GEMS POLISHING WORKS PRIVATE LIMITED (amalgamated company). Under this situation, the provision of sub section 12 and 12A of Section 80IA of the Act has been triggered for the reason stated hereinabove. ... ... ... ... On perusal of the above circular issued by the CBDT as well as the provisions of the Income Tax Act, 1961 there is no doubt that the assessee company M/s. FACETS GEMS POLISHING WORKS PRIVATE LIMITED(Amalgamated) is formed vide Hon'ble High Court order dated 23.03.2012 and the has made a wrong claim under Chapter VIA of the Income Tax Act,1961 in the return of income filed for the A.Y. 2014-15. The return of income filed for A.Y. 2014-15 and financial statements for the period have been perused. On perusal of the same it is noticed that the assessee company has claimed Rs. 76,27,934/- as deduction under Chapter VI-A. In view of the above facts/ material available on records and after analyzing the same, I have reason to believe that income of the assessee to the extent of Rs. 76,27,934/- has escaped assessment for A.Y. 2014-15 within the meaning of section 147 of the Income Tax Act,1961 as assessee has not made true and full dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not a mere change of opinion, suspicion, gossip or rumor and thirdly, there must be a live link or close nexus between the material before Assessing Officer and the belief he has formed regarding escapement of income. It was submitted that only such belief must lead to a conclusion that income has escaped assessment. However, in the facts of the case, the Assessing Officer has threadbare examined the issue of claim of deduction under section 80IA at the original assessment stage and hence, the respondent has no jurisdiction to issue the notice under section 148 of the Act. 7.3 It was submitted that no new information has come in possession of the respondent after the assessment order under section 143(3) of the Act was passed. It was submitted that the factum of amalgamation is disclosed from various documents such as Tax Audit Report, Audited Annual Accounts as well as computation of income and the order under section 143(3) is also passed in the name of the petitioner which is an amalgamated company. 7.4 Learned Senior Advocate Mr. Tushar Hemani submitted that there is no escapement of income chargeable to tax and even on merits, sub-section (12) and (12A) of section 80IA of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imed deduction under section 80IA by not making full and true disclosure of the material facts resulting into escapement of income to the tune of Rs. 76,27,934/-. It was therefore, submitted that the respondent has rightly exercised the jurisdiction to reopen the assessment beyond the period of four years. 8.2 Learned Senior Standing Counsel Mr. Sanghani submitted that during the regular assessment proceedings, the Assessing Officer has not formed any opinion on the issue under consideration for reopening and therefore, the same would not amount to change of opinion. It was submitted that mere furnishing of financials and details called for does not necessarily amount to disclosure within the meaning of priviso to section 147 of the Act. 8.3 Reliance was placed on the decision of the Hon'ble Bombay High Court in case of Dr. Amin's Pathology Laboratory vs P.N.Parasad, Joint Commissioner of Income Tax and ors. reported in (2001) 252 ITR 673. 8.4 With regard to the contention of the petitioner that escapement of income chargeable to tax since even on merits and sub-section (12) and (12A) of Section 80IA of the Act would not be applicable in the present case. It was submitted by lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the part of the petitioner to fully and truly disclose all material facts relevant for the assessment. 11. In view of such undisputed facts, the reasons recorded for reopening would amount to mere change of opinion of the respondent without there being any live link or nexus with the material relied upon as during the regular assessment proceedings. 12. The Assessing Officer had examined the claim under section 80IA(4)(iv) in detail by raising various queries which were duly answered by the petitioner-assessee. It is true that the specific query with regard to the issue pertaining to claim under section 80IA on account of amalgamation may not have been under consideration of the Assessing Officer, however, the entire claim made by the petitioner for deduction under section 80IA of the Act was before the Assessing Officer which was processed while passing the assessment order under section 143(1)(3) of the Act. 13. In view of the above facts, we are of the opinion that notice for reopening issued beyond the period of four years cannot be sustained. In that view of the matter, it is not necessary to examine the rival contention with respect to validity or otherwise of the claim ..... X X X X Extracts X X X X X X X X Extracts X X X X
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