For the
assessment year 2005-06, the assessee filed its return of income declaring
total income of Rs.2.04 crores( rounded off). In the return filed, the assessee
had claimed deduction of Rs.2.22 crores under Section 80IA of the Act and also
of Rs.3.82 crores under Section 80IB of the Act. The petitioner, however,
subsequently filed a revised return and revised its total income to Rs.2.87
crores claiming deduction of Rs.2.11 crores under Section 80IA of the Act and
Rs.3.10 crores under Section 80IB of the Act. After thorough scrutiny the
Assessing Officer granted the deduction, particularly, that claimed by the
assessee in its revised return with respect to Section 80IA of the Act.
The Assessing
Officer thereafter issued a notice on 16.3.2011 stating that he had reason to believe
that income chargeable to tax for the assessment year 2005-06 has escaped
assessment.
Assessing
Officer also supplied the reasons recorded for reopening the assessment in which
it is stated that :-
On verification of the records, it is
noticed that the assessee has filed form No.10CCB showing the total sale of
Rs.5,76,29,462/- and the profit derived on it is Rs.2,11,87,992/- and the
assessee has claimed deduction u/s 80IA @ 100% of the profit of the industrial
undertaking at TWAD, Tamilnadu. The explanation to Section 80IA has been
substituted by the Finance (No.2) Act, 2009, w.e.f. 01.04.2000 which is as
under:-
“For the removal of doubts, it is hereby
declared that nothing contained in this section shall apply in relation to
business referred to in subsection(4) which is the nature of a work contract
awarded by any person ( including the central and State Government) and
executed by the undertaking for enterprise referred to in subsection.”
The petitioner
raised objection to such proposal of the Assessing Officer to reopen the assessment
previously framed after scrutiny. The Assessing Officer, however vide his order
dated 14.12.2011 disposed of such objections. Shortly thereafter, the Assessing
Officer also passed a fresh order of assessment on 20.12.2011. He disallowed
the entire deduction claimed by the assessee under Section 80IA of the Act. At
that stage, the petitioner has approached this Court challenging the very
reopening of the assessment and making grievance that the Assessing Officer
consumed nearly 6 months time for disposing of the objections raised by the
petitioner and thereafter proceeded to pass the final order of assessment in
less than 2 weeks, thereby giving no opportunity to the petitioner to avail of
its legal remedies.
Petitioner
submitted that the assessment previously framed was reopened beyond the period
of 4 years. The reasons recorded do not even suggest that the Assessing Officer
had reason to believe that income chargeable to tax had escaped assessment for
the reason of the assessee failing to disclose truly and fully all material
facts.
The suggestion of
the Revenue that the assessee failed to disclose the nature of works executed
and that the same was executed only as works contractor and not as a developer,
cannot be accepted for two reasons. Firstly, the reasons recorded do not refer
to such a ground. Secondly, when the assessee filed the return of income, the
Explanation in question was not in picture. It would not be possible to expect
the assessee to comply with the requirements of such Explanation by making disclosures
in this regard which Explanation did not form part of the statute book when he
filed his return.
Tendency to delay
disposing of the objections and, thereafter at the fag end of final time limit,
to frame the assessment, is noticed in more cases than one. We cannot approve
of such tendency. This we are sure was not the intention of the Apex Court when
the decision in the case of GKN Driveshafts (India) Ltd. vs. Income-Tax Officer
and others reported in [2003]259 ITR 19 was rendered. We are sure this would be
brought to the notice of the Assessing Officers by the Department so that such
instances do not recur in future.
To get the complete Order Contact Administrator
Date of Pronouncement of order 16/01/2012
No comments:
Post a Comment