LIC HOUSING FINANCE LIMITED,MUMBAI vs. ACIT 2(2)(1), MUMBAI, AAYKAR BHAVAN, MUMBAI

12.2019, the AO 20.03.2024 alleging e section 148. The rea disallowance of the sa 3.2 The assessee ca Commissioner (App reassessment procee The learned CIT(A) Explanation 1 to se constitute “informati belief. The learned C made out of CSR al section 80G, as such underlying Explanati the challenge to reop as under: “Ground 1: R The appellan 148A(d) on th improperly in fresh tangib 22.02.2024 w Officer (AO). independent mechanically, Upon careful merit. Under Finance Act, information su LI ITA passed an order under sect escapement of income and issu assessment culminated on 31.03 aid deduction under section 80G arried the matter in appeal bef peals), challenging the very edings as well as the disallowa , however, upheld the reope ection 148 and opining that a ion” so long as the AO forms CIT(A) further held, on merits, llocations do not qualify for d h claim allegedly defeats the le ion 2 to section 37(1). The Ld. pening of the assessment procee Reopening of Assessment Proceedings nt has challenged the order passed un he ground that the reassessment proce itiated based on a mere audit objection, le material, and that its detailed was not considered judiciously by th It is further alleged that the AO failed judgment and simply adopted the au , thereby rendering the proceedings void a consideration, this ground is found to r the reassessment framework introdu 2021, Explanation 1 to section 148 c uggesting escapement of income includes IC Housing Finance Ltd 4 A No. 5037/MUM/2025 tion 148A(d) on ued notice under 3.2024 with the G. fore the learned y initiation of ance on merits. ening, invoking audit objections an independent that donations deduction under egislative intent CIT(A) rejected edings observing s nder section eedings were without any reply dated e Assessing d to exercise dit objection ab initio. o be without uced by the clarifies that s inputs such as audit objec at a reasoned section 148A passed a spe claim of ded requires re-ex audit note b deduction, cl legally tenabl As held in AC 500) and reite reassessment possesses re preliminary s facie belief th the AO's orde the invocation law. Regarding th opinion beca original asses 561) did hol However, Exp audit inputs made. In this reply, and co evidence has exercise. On the issue 149(1)(b), the results in a cl of an entry in amended prov Thus, all co accordingly d 3.3 The Ld. CIT(A) merit. Ground 2: D Even for CSR LI ITA ctions, provided the AO applies his mind d belief. In this case, the AO issued a (b), considered the appellant's reply, an eaking order under section 148A(d), stat duction under section 80G made from xamination. The AO has not mechanically but has independently formed an opin aimed to the tune of Rs.4.86 crores, le in light of CSR provisions. CIT v. Rajesh Jhaveri Stock Brokers Pvt. L erated in Dr. Mathew Cherian v. ACIT (4 t can be initiated even on a legal issu elevant information and applies his m stage, a conclusive finding is not requir hat income has escaped assessment su er reflects due process and independen n of reassessment proceedings is in acco e argument that reopening constitutes ause the issue was previously exam ssment, the Court in Kelvinator of India L ld that mere change of opinion is imp planation 1 to Section 148 now allows as information, provided an independen s case, AO issued a specific notice, ev oncluded with reasoning under section s been presented to suggest this was a e of reassessment beyond 3 years un donation entry is clearly traceable in th laimed deduction. As such, it falls within n the books of account and meets the te visions. mponents of Ground 1 are devoid of dismissed.” also dismissed the claim of t Deduction Under Section 80G is Fully R Donations IC Housing Finance Ltd 5 A No. 5037/MUM/2025 d and arrives notice under nd thereafter ting why the CSR funds acted on the ion that the may not be Ltd. (291 ITR 450 ITR 568), ue if the AO mind. At this red; a prima uffices. Since nt reasoning, ordance with a change of mined during Ltd. (320 ITR mpermissible/ s reliance on nt decision is valuated the 148A(d). No a mechanical nder section he books and the category est under the f merit and the assessee on y Allowable

Before us, the L Book containing page and grounds on meri 6. Addressing the the Ld. counsel for deduction u/s 80G assessment proceed proceedings u/s 14 tangible material, the was available for ass which is based merel that the Assessing O the income but he is assessment without his possession. The L relied on the decision of Castrol India Ltd (Bombay). 7. We have heard and perused the rec into service. The lear our attention to the Court in Castrol Ind Court, after review LI ITA

One must built test to Hence, after reopen, prov conclusion assessment. formation of 15. As held CIT [2014] during the replied to it, consideration is also not contain ref satisfaction reopening of basis of cha during the change of o reason to be assessment. reads as und "14. We find petitioner ha they were en investment dated 8 Sep proceedings Officer, the p profit on sale profits but c support of it CBDT Circul for reopening reliance upo therefore, be dated 28 M assessment Officer while October 201 dated 28 Ma reopen asse LI ITA t treat the concept of "change of opinio check abuse of power by the assess r 1-4-1989, the assessing officer ha vided there is "tangible material" to c that there is escapement of in Reasons must have a live link f the belief. . . . . . . . . . ." by this Court in Aroni Commercials 44 taxmann.com 304 once a query assessment proceedings and Ass it follows that the query raised was n of the AO while completing the ass necessary that an assessment or ference and/or discussion to d in respect of the query raised. The f the assessment, in our view, is me ange of opinion of the AO from that course of assessment proceedings opinion does not constitute justificat elieve that income chargeable to tax h Paragraph 14 of Aroni Commercials der: d that during the assessment proce ad by a letter dated 9 July 2010 poin ngaged in the business of financing t in shares and securities. Further, ptember 2010 during the course of a on a specific query made by the petitioner has disclosed in detail as e of investments should not be taxed a charged to tax under the head capi ts contention the petitioner had also lar No.4/2007 dated 15 June 2007. (T g furnished by the Assessing Officer on CBDT Circular dated 15 June 200 e noticed that the very ground on whic March 2013 seeks to reopen the asse year 2008-09 was considered by the e originally passing assessment orde 0. This by itself demonstrates the fact arch 2013 under Section 148 of the Ac essment for A.Y. 2008-09 is base IC Housing Finance Ltd 10 A No. 5037/MUM/2025 on" as an in- sing officer. as power to come to the ncome from k with the Ltd. v. Dy. y is raised sessee has a subject of sessment. It rder should disclose its erefore, the erely on the held earlier s and this tion and/or has escaped Ltd. (supra) eedings the ted out that trading and by a letter assessment e Assessing to why its as business ital gain. In relied upon The reasons also places 7). It would ch the notice essment for e Assessing er dated 12 t that notice ct seeking to d on mere change of o learned Cou raised has n referred to i passed for A query is rais assessee ha was a subje completing assessment discussion to raised. If consideration during the a then it wou complete al scrutinized b one must no order is to b Officer and assessment the satisfact The only req have conside issuing noti original asse the present f 2012 the ver head capita business w Assessing proceedings would theref by impugned basis of cha held earlier leading to th opinion does believe tha assessment. 16. We have rejecting th LI ITA opinion. However, according to Mr. unsel for the revenue the aforesaid not been considered earlier as the s n the assessment order dated 12 Oc A.Y. 200809. We are of the view t sed during the assessment proceedin as replied to it, it follows that the qu ect of consideration of the Assessing O the assessment. It is not necessa order should contain referenc o disclose its satisfaction in respect o an Assessing Officer has to n bestowed by him on all issues rai assessment proceeding even where he uld be impossible for the Assessing l the assessments which are requ by him under Section 143(3) of the Ac t forget that the manner in which an a be drafted is the sole domain of the it is not open to an assessee to ins order must record all the questions tion in respect thereof of the Assess quirement is that the Assessing Offic ered the objection now raised in the ice under Section 148 of the Act, essment proceedings. There can be n facts as evidenced by a letter dated 8 ry issue of taxability of sale of share al gain or the head profits and was a subject matter of considerat Officer during the original a leading to an order dated 12 Octob fore, follow that the reopening of the a d notice dated 28 March 2013 is me ange of opinion of the Assessing Office during the course of assessment he order dated 12 October 2010. This s not constitute justification and/or at income chargeable to tax ha " e also noted the contents of the impu e objections of Petitioner. An ide IC Housing Finance Ltd 11 A No. 5037/MUM/2025 Chhotaray, issue now same is not ctober 2010 that once a ngs and the uery raised Officer while ary that an ce and/or of the query record the ised by him e is satisfied g Officer to uired to be t. Moreover, assessment e Assessing sist that the raised and sing Officer. cer ought to grounds for during the no doubt in 8 September s under the gains from tion by the assessment ber 2010. It assessment erely on the er from that proceeding s change of reasons to as escaped ugned order entical and common pla rejecting th routinely reli the case of Ltd. [2007] 208 which re "At the stage there was r could have f would conclu at that stag the Assessi satisfaction. 17. Howeve true import continue to having esca material and while passin while conclu necessary t required is material wh was delibera amount to no of the Apex (supra) mus review the change of op Further, the AO was alre the original tangible info formed the r 18. In these that the noti the Act in re the order d rejecting the untenable a allowed”. LI ITA ace assertion is seen in various s he objections of Assessees. The D ies upon an observation of the Suprem Asstt. CIT v. Rajesh Jhaveri Stock B 161 Taxman 316/291 ITR 500/[200 eads as follows: e of issue of notice, the only question relevant material on which a reasona formed a requisite belief. Whether th usively prove the escapement is not e. This is so because the formation ing Officer is within the realm of " er, Assessing Officers without appre of the aforesaid decision of the Supr reopen assessments on the ground aped assessment despite the fact t d information was already availabl ng the original assessment order. F usive proof of escapement of income to reopen an assessment, the lea a requisite belief based on fresh a hich was not accessible to the AO or ately withheld by Assessee, which on-disclosure of relevant information. Court in Rajesh Jhaveri Stock Broke t not be used by AO to reopen asse original assessment order on the pinion of the AO, as done in the pr reasons to believe notice itself indica eady seized with information prior to assessment order and as such, t ormation on the basis of which he ha equisite belief. circumstances, we have no hesitation ice dated 27th March 2021 under sec spect of income having escaped asses dated 21st December 2021 passed e objections of Petitioner impugned and cannot be sustained in law. The IC Housing Finance Ltd 12 A No. 5037/MUM/2025 such orders Department me Court in Brokers (P.) 08] 14 SCC n is whether able person he materials the concern of belief by f subjective eciating the reme Court, d of income that all the le with him Furthermore, may not be ast that is nd tangible that which then would The finding ers (P.) Ltd. essments to basis of a resent case. ates that the o passing of there is no as allegedly n in holding ction 148 of ssment and by the AO herein, are e Petition is 7.1 In the present manner of doubt tha particulars relating deduction under sec computation clearly r the claim under sect enquiry during sectio view while completing 7.2 It requires no objections, by themse after insertion of Exp cannot vest in the A arrives at a belief fou us reflects no such change of opinion counsel for the asse Comptroller and Aud 12 of 2022) wherein Act on the issue. A c Hon’ble Parliament, relevant part of which “(iv) CBDT n binding clarif house/corpor companies co eligible for de LI ITA case, the material placed befo at the assessee had fully disclo to its CSR expenditure, d ction 80G during the original a reflected the add-back of CSR e tion 80G. These matters were in on 143(3) proceedings, and the g the assessment. o elaborate exposition to sta elves, do not constitute tangible planation 1 to section 148, su AO a power to reopen unless he unded on fresh information. Th h fresh material; instead, it e dressed as reassessment. Bef essee has filed a copy of the e ditor General ( CAG)of India rep the CAG recommended for am copy of such extract of report p which is available on paper bo h is reproduced for ready referen needs to consider bringing an amendm fication as to whether donations to trust rate trusts, out of CSR expenditure overed by Section 135 of the Companie eduction under section 80G or not. Such IC Housing Finance Ltd 13 A No. 5037/MUM/2025 re us leaves no osed all relevant donations, and assessment. The expenditure and ndeed subject of AO had taken a ate that audit e material. Even ch audit inputs e independently he record before exhibits a mere fore us, the ld extract from the port ( report no. mendment in the laced before the ook page 29-34, nce as under: ment or issuing ts, including in- e by specified es Act, 2013 is an amendment or binding cla interpreted assessment c The CBDT sta in the nature as expenditur Section 37 of eligibility of e to this amend specified in th Swachh Bhar Government, amendment responsibility, these two fun Income-Tax A corporate soci the Companie 7.3 The Hon’ble Bo held in no uncerta previously scrutinise section 147. The rat We find no distingu from the binding auth 7.4 The issue in identical to the issu (supra), therefore, re Juri ictional High reassessment proce concluded under LI ITA arification is necessary to ensure that the uniformly by the Assessing Officer charges and also to minimize the possibili (Par ated that Corporate Social Responsibility of application of income and hence can re. A specific amendment to this effect w f the Income Tax Act vide Finance (No.2) entities listed in Section 80G of the Incom dment was not withdrawn as it is subje he said Section. However, for the eligibility rat Kosh, and Clean Ganga Fund set up which was introduced in Section 80G of Section 37 with regard to co , a condition was stipulated that only tho nds will qualify for deduction under Sec Act which is not spent by the assessee i ial responsibility under sub-Section (5) of es Act, 2013.” ombay High Court in Castrol In ain terms that re-examinatio ed cannot provide juri iction t tio applies in pari materia to th ishing feature that would perm hority of the juri ictional High dispute involved in the prese ue decided in the case of Cas espectfully following the finding Court, we are constrained to eedings initiated under secti section 147 suffer from a IC Housing Finance Ltd 14 A No. 5037/MUM/2025 e provisions are rs across all ity of litigation. ragraph 5.1.2.3) y contribution is nnot be allowed was brought in Act, 2014. The me Tax Act prior ct to conditions y of donation to p by the Central subsequent to orporate social ose donations to ction 80G of the in pursuance of f Section 135 of ndia Ltd. (supra) n of an issue to reopen under he present case. mit a departure Court. ent case being strol India Ltd. g of the Hon’ble o hold that the ion 148A and a fundamental juri ictional infirmit Nos. 1(b) and 1(c) o allowed. 8. In view of our f grounds raised on under section 80G f rendered academic an 9. In the result, th Order pronoun (RAJ KUMAR C JUDICIAL M Mumbai; Dated: 26/11/2025 Rahul Sharma, Sr. P.S.