ACIT-CC-7(3), MUMBAI vs. INFRATECH BUILDERS AND AGRO PRIVATE LIMITED , MUMBAI
Before: SHRI SANDEEP GOSAIN & SHRI GIRISH AGRAWALAssessment Year: 2009-10
PER GIRISH AGRAWAL, ACCOUNTANT MEMBER This appeal filed by the revenue is arising out of the order CIT(A),- 49, ITBA/APL/S/250/2024-25/1072911991(1) Mumbai vide order dated 04.02.2025 against the assessment order passed u/s 143(3)/147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 13.12.2016 for A.Y. 2009-10. 2. Grounds taken by the revenue are as under: 1."On facts and circumstances of the case and in law, the Ld.CIT(A) erred in holding that the reopening of the assessment under Section 147 of the Income Infratech Builders & Agro Pvt. Ltd.
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Tax Act, 1961 is bad in law without considering the fact that the assess had failed to provide 1 the details of payments made to M/S. Bovis India Pvt. Ltd.
and M/S. Bovis Lend Lease India Pvt. Ltd. and no service tax was charged on the payments made to these companies, unlike other similar payments.”
"On facts and circumstances of the case and in law, the Ld. CIT(A) failed to consider the fact that the proviso to Section 147, which restricts reopening beyond four years, does not apply when the assessee has failed to disclose fully and truly all material facts necessary for the assessment.”
"On facts and circumstances of the case and in law, the Ld.CIT(A) erred in holding that the reopening of the assessment under Section 147 of the Income Tax Act, 1961 is bad in law without considering the decision of the Hon'ble Gujarat High Court in the case of HVK International (P.) Ltd. v. Deputy 3 Commissioner of Income-tax, Central Circle [2016] 72 taxmann.com 208 (Gujarat) wherein the Hon'ble High Court held that the examination conducted by the Assessing Officer during the scrutiny assessment does not allow the assessee to argue that the same issue cannot be revisited during the reopening of the assessment.”
"On facts and circumstances of the case and in law, the Ld.CIT(A) erred in holding that the reopening of the assessment under Section 147 of the Income Tax Act, 1961 is bad in law without considering the decision of Bombay High Court in Girilal & Company, ITO (2008) 300 ITR 432 (Bombay) wherein the Hon'ble High Court upheld the reopening of the assessment beyond four years from the end of the assessment year on the ground that the assessee had failed to disclose primary facts during the original assessment proceedings." 5. "On facts and circumstances of the case and in law, the Ld.CIT(A) erred in holding that the reopening of the assessment under Section 147 of the Income Tax 0 Act, 1961 is bad in law without considering the decision of Bombay High Court in Raman & Weil (P.) Ltd. v. DCIT (2015) 56 taxınann.com 86 (Bombay) wherein the Hon'ble High Court observed that the assessee had failed to declare the fact that it did not possess a factory license to manufacture goods, despite claiming deductions under section 80-IB. The Court held that the initiation of reassessment proceedings based on the prima facie view that the assessee Infratech Builders & Agro Pvt. Ltd.
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might not have commenced manufacturing during the relevant year, which would disqualify the assessee from claiming deductions, was justified.”
6. "on facts and circumstances of the case and in law, the Ld.CIT(A) erred in holding that the reopening of the assessment under Section 147 of the Income
Tax Act, 1961 is bad in law without considering the fact the reopening of assessment under Section 147 is not based on a mere change of opinion but on valid grounds of non-disclosure of material facts, which is sufficient to justify reopening as per the law."
7. "The appellant craves leave to add to alter, amend, modify and/or delete any or all of the above said grounds of appeal. The appellant reserves its right to file further submission in the appeal."
2.1. The moot point raised by the revenue in the present appeal is in respect of reopening of the assessment which has been considered as bad in law by the Ld. CIT(A) in view of proviso to section 147 since reopening was done beyond the period of four years from the end of the relevant assessment year and it amounts to change of opinion.
3. Brief facts of the case are that assessee is engaged in the business of land development and real estate construction. It got merged into another company called Lodha Crown Build Mart Pvt. Ltd. with effect from 01.04.2010 vide order dated 24.06.2010 by the Hon’ble High Court of Bombay. Assessee filed its return of income on 30.09.2009 returning total income at Rs.7,67,622/- which was revised on 03.09.2010 with revised total income at Rs.33,60,051/-. Case of the assessee was taken up for scrutiny assessment under section143(3) whereby total income of the assessee was assessed at the revised total income returned by the assessee at Rs.33,60,051/- by passing an order dated 25.11.2011. Subsequently, ld. AO recorded the reasons to believe for initiating the proceedings under sections 147 read with section 148. The reasons recorded by the Ld. AO for initiating the reopening proceedings are Infratech Builders & Agro Pvt. Ltd.
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extracted below for ready reference as these are vital to adjudicate on the issue in terms of the contentions raised by the assessee.
”It is seen from the record that the assessee company had paid professional and consultancy charges to M/s Bovis India pvt. Ltd. of Rs. 85,08,995/ and M/s Bovis lend Lease
India Pvt. Ltd. of Rs. 2,28,65,004/- on which TDS was not deducted and hence the amount of above transactions is to be disallowed u/s 40(a)(ia) of the IT. Act.
In new of the above I leave reason to believe that income to the tune of Rs. 3,13,73,999/
has escaped assessines for the A. Y. 2009-10 within the meaning of sec. 147 of the income tax
Act, 1961.”
1. Ld. AO called for explanation from the assessee in respect of payments made by the assessee to the two parties on which TDS was not done. In this respect assessee furnished the details and claimed that these payments were made to the two parties towards reimbursement of expenses and hence, tax was not deducted on the same. It was pointed out by the assessee that in the course of regular assessment made under section 143(3), it had furnished the details of professional/consultancy charges. It also furnished copy of agreement entered into by the assessee with the two said parties along with copies of ledger account in its books of accounts. It was submitted that these agreements were entered into for exploring collaboration opportunities and the payments were made in respect of reimbursement of expenses incurred by them on behalf of the assessee. 3.2. In this respect, reference was made to the submission dated 24.11.2011 made before the ld. AO, copy of which is placed on record in the paper book containing 96 pages. The contents of this submission made by the assessee in the course of original assessment proceeding pursuant to the query raised by the assessee are extracted below for ready reference: Infratech Builders & Agro Pvt. Ltd.
A.Y.2009-10
“24th November, 2011
The Assistant Commissioner of Income Tax,
Central Circle-42, Mumbai
Aaykar Bhavan, Room No.655,
M. K. Road, Mumbai-400020,
Sub:-Assessment proceeding
Assessment Year 2009-10
P.A.No. :- AABC173928
Dear Sir,
In connection of Income Tax Assessment proceeding for assessment year 2009-
10, we further submit as follows:
1. Partywise details of Consultancy and professional fees paid attached herewith as Annexure-1. 2.1 The Company has entered into Exploratory agreement vide letter dated 11th
August 2008 with Bovis Lend Lease India Private Limited and Bovis India Private
Limited to collaborate and jointly review the feasibility if the potential
Collaboration arrangement with respect to the following.
a. Construction costs, methodology and scheduling required for delivery c projects.
b. The quality and availability of materials and labour to achive delivery of the projects, c. Environmental and occupational health and safety policies.
d. Cost structure if company personnel including employees cost details.
e. Process of establishing a collaboration mechanism including defining organizational and governance structure, key commercial terms and business matters. Pursuant to the above, various expenses and cost that might have been incurred will be shared equally between the Company and Bovis Lend Lease India Private Limited and Bovis India
Private Limited.
2.2 Further the Company has entered into settlement deed with Bovis Lend Lease
India Private Limited and Bovis India Private Limited for amount owing as reimbursement of expenses in connection with Exploratory agreement.
2.3 Enclose herewith letter of understanding, settlement deed, payment receipt, ledger accounts as Annexure-2. We hope that above stated information will meet with your requirements. We shall be please to explain any pertinent aspect.”
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3. With this submission, assessee also furnished an annexure giving details of vendor name, expense amount, service tax and VAT/TDS details and payment dates. In this annexure except for these two parties, for all other vendors, assessee had done TDS and was placed before the Ld. AO in the course of original assessment proceedings. The said annexure is also extracted below for ready reference:
4. It was thus strongly contested by the assessee that this issue which led to the reopening of the proceedings has already been Infratech Builders & Agro Pvt. Ltd.
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considered in the original assessment for which no addition was made.
Thus, reopening on the same issue amounts to change of opinion.
3.5. Furthermore, the assessee contended that reopening of the case is beyond the period of four years as evident from the date of notice issued under section 148 which is dated 28.03.2016 and the year under consideration is A.Y. 2009-10. Accordingly, first proviso to section 147
gets attracted in the present factual matrix which categorically requires that there has to be a failure on the part of the assessee to truly and fully disclose all material facts relevant to the assessment. In the reasons to believe recorded by the Ld. AO, there is no mention about any failure on the part of the assessee to fully and truly disclose all material facts in respect of the issue which led to the invocation of reassessment proceeding. Accordingly, it is strongly contended that the reopening proceeding itself is not in accordance with the provisions of the law.
4. On the above contentions of the assessee, the moot question which arises before us is to decide whether the issue relating to payments made by the assessee to the two parties was examined in the original assessment or not and if it was, then to what extent which otherwise would lead to change of opinion. We have perused the submission made by the assessee before the Ld. AO in the course of original assessment proceedings for which relevant extracts are already reproduced in the above paragraphs. Assessee had corroborated its submission along with relevant documentary evidences demonstrating full disclosure on its part in respect of the impugned transactions.
Allegation by the Ld. AO that assessee had given only a brief write up on this issue is not correct in the light of the details already on record.
It is noted that Ld. AO after taking into consideration the submissions made by the assessee had formed his view and made no disallowance
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while completing the assessment. Also, in the reasons to believe recorded by the Ld. AO, reference is made “to the records” from where he had taken note of the transactions with the two parties on which TDS was not done and therefore, alleged for its disallowance under section 40(a)(ia). Thus, it is noted that there is nothing new which has been brought on record subsequent to the original assessment proceedings for invoking the reopening of the case. The said reopening is on the same set of facts and material which existed at the time of original assessment completed under section 143(3). In this given circumstance, the reasons to believe recorded by the ld. AO for invoking reopening amounts to change of opinion on the same set of facts and material.
4.1. Case of the assessee is fortified by the decision of Hon’ble Supreme
Court in CIT V. Kelvinator of India [2010] 320 ITR 501(SC) wherein it was held that Assessing Officer has no power to review assessment order under the shelter of reopening of assessment under section147/148. It is not open for the Assessing Officer to relook at the same material only because he was subsequently of view that conclusion arrived at earlier was erroneous. This would amount to reviewing the same material to come up with possibly a different conclusion and such an exercise is not permissible.
5. Also, it is a case where the notice under section 148 was issued beyond the period of four years from the end of the relevant assessment year, fact of which is undisputed. Original assessment under section 143(3) was carried out. Thus, case of the assessee falls within the ambit of proviso to section 147 whereby the case can be reopened only if it is established that there was a failure on the part of the assessee to disclose fully and truly all material facts at the time of reopening assessment. Assessee had evidently demonstrated that it had disclosed
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fully and truly all material facts at the time of original assessment in respect of the issue which formed the basis for invoking the reopening proceedings. Furthermore, there is no whisper by the ld. AO in the reasons to believe recorded by him about any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Thus, the reopening by the ld. AO beyond the period of four years is in violation to the requirements of proviso to section 147. This aspect of the present case is fortified by the following judicial precedents in favour of the assessee.
(a) Hindustan Lever Ltd v R.B.Wadkar
[2004] 137 Taxman 479
(Bom)
(b) Sound Casting (P) Ltd v Dy.CIT
[2013] 33 taxmann.com 374
(c) Titanor Components Ltd v ACIT
[2012]
20
taxmann.com
805(Bom)
(d) Purity Techtextile (P) Ltd v ACIT
[2010] 189 Taxman 21 (Bom)
(e) Wel Intertrade (P) Ltd v ITO
[2009]
178
Taxman
27
[Delhi]
(f) Duli Chand Singhania v ACIT Haryana
[2004] 136 Taxman 725
(Punj. & Haryana)
6. Considering the factual matrix discussed above and the judicial precedents, the reopening proceedings initiated by issuing notice under section 148 and the impugned reassessment order passed thereafter are bad in law, being not in accordance with the provisions of the Act as discussed above, both on account of there being a change of opinion as well as not in compliance with proviso to section 147 as there being no failure on the part of the assessee to fully and truly disclose material facts necessary for the assessment. Ld. CIT (Appeals) had elaborately dealt with both the aspects and has concluded in favour of the assessee.
We do not find any reason to interfere with the detailed findings arrived
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at by ld. CIT(A) on both these aspects. Accordingly, grounds raised by the Revenue in this respect are dismissed.
7. In the result, appeal of the Revenue is dismissed.
Order is pronounced in the open court on 22 December, 2025. (Sandeep Gosain)
Accountant Member
Dated: 22 December, 2025
Saumya, Sr.P.S
Copy to :
1. The Appellant
2. The Respondent
3. DR, ITAT, Mumbai
4. Guard File
5. CIT
BY ORDER,
(Dy./Asst.