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TMI Blog2018 (9) TMI 2151X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessment Year 2006-07. The return was processed u/s. 143(1) of the Act on 05.11.2007 on returned income. The case was selected for scrutiny and the assessment u/s. 143(3) of the Act was completed on 26.12.2008 on a total income of Rs. 3,10,09,060/- after disallowing deduction u/s. 80IA of the Act of Rs. 30,81,045/- in respect of 'Bus shelters' and 'Foot over bridges'. Aggrieved against the order passed by the AO u/s. 143(3) on 26.12.2008, the assessee preferred an appeal before the CIT(A), who allowed relief to the assessee in respect of its claim of deduction u/s. 80IA to the tune of Rs. 30,81,045/-. Thereafter, the AO after the lapse of four years was of the opinion that there is an escapement of income which is likely to exceed more than one lakh rupees, therefore, after obtaining necessary approval from the CIT, the AO issued notice u/s. 148 for re-opening the case u/s. 147 of the Act. Thereafter, the AO passed order u/s. 147/251/143(3) dt. 20.03.2014 determining total income of Rs. 4,35,74,779/- which included disallowance of deduction u/s. 80IA of the Act of Rs. 2,04,42,842/- towards road medians which was previously allowed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s section applies to any enterprise which has entered into an agreement with the Central Govt. or State Govt. or a local authority or any other statutory body for (i) developing or (ii) operating & maintaining or (iii) developing, operating & maintaining a new infrastructure facility. Explanation below clause (4) of 80IA defines the infrastructure facility which inter-alia includes (a) road including toll road, a bridge or a rail system; (b) a highway project including housing or other activities being an integral part of highway project. Further to claim any deduction u/s 80IA as it is mandatory to submit a copy of from 10CCB. Moreover as per notification no.240/2002 dated 06.09.02 a copy of the agreement between the Govt. or local authority and the enterprise developing or operating or maintaining infrastructure was required to be produced for availing any deduction u/s. 80IA. However it was noticed that in the instant case copy of form 10CCB (which indicates the year of commencement of the business claiming 80IA or other details) and also the copy of contract agreement between the enterprise and the authority were absent in the assessment record. In the instant case it cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 250000 as managerial salary. The mistake resulted in underassessment of business income by Rs. 250000 involving undercharge of tax of Rs. 84150." 7. We note that the original assessment was framed u/s. 143(3) of the Act on 26.12.2008 and the period of four years from the end of the relevant assessment year has undisputedly expired as the notice conveying the intention of AO to reopen u/s. 148 of the Act was issued on 26.02.2013, so the reopening of original assessment framed u/s. 143(3) on 26.12.2008 was after expiry of 4 years and so the proviso to sec. 147 of the Act comes into play and the procedural safeguard provided to by the Parliament has to be satisfied before the AO ventures to reopen such an assessment. So, first let us look at sec. 147 of the Act which is as under: "Income escaping assessment. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded to reopen the completed assessment u/s. 143(3),(supra) we need to examine from the reasons recorded by the AO as to whether there is any whisper/averment to the effect which fact/material that assessee has not truly and fully disclosed any facts or material to assess the income of the assessee in the original assessment. In a similar case the Hon'ble Bombay High court in the case of Hindustan Lever Ltd. Vs. ACIT 268 ITR 332 (Bom) has laid the law on the issue as under: "The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure on the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) rightly took note that the assessee's case was reopened after a lapse of more than four years from the relevant assessment year since notice u/s. 148 of the Act was issued on 26.02.2013 and since the Ld. CIT (A) rightly made a finding that since the regular assessment was completed under scrutiny u/s. 143(3) of the Act vide assessment order dated 26.12.2008, the AO in the reasons recorded has not made in allegation to the effect that assessee failed to disclose fully and truly all material facts necessary for the assessment of the assessee in the regular assessment proceedings. Therefore, the reopening without the AO spelling out in the reasons recorded to reopen the alleged failure on the part of the assessee the facts which it did not disclose fully and truly at the regular assessment stage vitiates the reopening. We note that in the case of Hindustan Lever Ltd vs R.B. Wadekar (supra) it has been emphasized by the Hon'ble Bombay High Court that reasons recorded by the AO must contain the finding with regard to the alleged failure on the part of the assessee to disclose fully and truly all material facts. It has also been observed by the Hon'ble High Court that the 'Reasons' rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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