SILVER SPRING CONST. PVT. LTD., vs. COMMISSIONER OF INCOME TAX UDAIPUR AND ANR

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CW/2989/2015HC Rajasthan2025:RJ-JD:34574-DB05 August 2025Author: VINIT KUMAR MATHUR, ANUROOP SINGHI7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the order dated 16.03.2015 rejecting the petitioner's objections was unsustainable and deserved to be set aside. The Court found that the Assessing Officer had not properly considered the order passed by the ITAT in the assessee's own case for AY 2010-11, which had ruled in favour of the petitioner regarding the deduction under Section 80 IB(10). The Assessing Officer had merely brushed aside the ITAT's order, failing to give any finding on the submissions raised. The Court emphasized that while res judicata does not apply in income tax proceedings, the principles of consistency, propriety, and finality do. A higher authority's finding must be dealt with and considered. The Court cited the Supreme Court's decision in GKN Driveshafts (India) Ltd. v. Income Tax Officer & Ors. for the requirement of a speaking order and Bharat Sanchar Nigam Ltd. v. Union of India for the principle of consistency in subsequent assessment years when facts and law remain the same. The Court quashed the order dated 16.03.2015 and remanded the matter back to the Assessing Officer to decide the objections afresh after giving a reasonable opportunity of hearing.

What were the facts?

The petitioner, Silver Spring Construction Private Limited, filed a writ petition challenging a notice dated 05.04.2013 under Section 148 read with Section 147 of the Income Tax Act, 1961, and the subsequent order dated 16.03.2015 rejecting its objections. The assessment year in question is 2008-09. The petitioner had claimed a deduction under Section 80 IB of Rs. 38,71,569/-. The Assessing Officer initiated reassessment proceedings alleging escaped income. The petitioner argued that its claim for deduction under Section 80 IB for AY 2010-11 was approved by the CIT(A) and the ITAT, and that there was no concealment of income. The Assessing Officer rejected these objections.

What were the issues?

1. Whether the order dated 16.03.2015 rejecting the petitioner's objections to the notice under Section 148 read with Section 147 of the Act of 1961 is a speaking order and has properly considered the submissions and material placed before it, particularly the ITAT's order in the petitioner's own case for AY 2010-11. Assessee's Contention: The order dated 16.03.2015 is not a speaking order and failed to consider the submissions, including the ITAT's order dated 08.10.2014 which held the petitioner entitled to deduction under Section 80 IB for the same project. The Assessing Officer showed non-application of mind. The petitioner relied on the ITAT's finding that the completion certificate merges with the occupancy or utility certificate and that the project was completed within the stipulated time. Revenue's Contention: The Revenue opposed the petitioner's submissions but conceded that in the petitioner's own case, the Tribunal had held the petitioner entitled to deduction under Section 80 IB. The Revenue prayed for the matter to be remanded back to the Assessing Officer for re-examination.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 80 IB

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JD:34574-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Civil Writ Petition No. 2989/2015 Silver Spring Construction private limited shantivan, Fatehpura Badela Road, Udaipur. Through its Director Prem Singh Sadhana. ----Petitioner Versus 1. Commissioner Of Income Tax Udaipur. 2. Dy. Commissioner of Income Tax Circle-II, Udaipur. ----Respondents For Petitioner(s) : Mr. Sharad Kothari Mr. Pranjul Mehta Mr. Kalpit Shishodia For Respondent(s) : Mr. K.K. Bissa HON'BLE MR. JUSTICE VINIT KUMAR MATHUR HON'BLE MR. JUSTICE ANUROOP SINGHI

Order 05/08/2025

1.

Heard learned counsel for the parties.

2.

The present writ petition has been filed assailing the validity of the notice dated 05.04.2013 (Annex.3) issued under Section 148 read with Section 147 of the Income Tax Act, 1961 (hereinafter referred as “Act of 1961”) and the order dated 16.03.2015 passed by the Assessing Officer, whereby the objections filed by the petitioner to the notice dated 05.04.2013 have been rejected.

3.

Briefly noted, the facts in the writ petition are that the petitioner is a company registered under the Companies Act and is engaged in various types of construction activities. The petitioner submitted its return of income for the A.Y. 2008-2009 claiming deduction under Section 80 IB of the Act of 1961 of (Uploaded on 08/08/2025 at 04:35:07 PM) (Downloaded on 27/10/2026 at 11:21:13 PM)

[2025:RJ-JD:34574-DB] (2 of 7) [CW-2989/2015] Rs.38,71,569/- in respect of income arising out of construction work carried out by it of a project approved by the Urban Improvement Trust, Udaipur. The respondent No.2 issued a notice on 05.04.2013 under Section 148 read with Section 147 of the Act of 1961, proposing to reopen the assessment for the A.Y. 2008-09 alleging inter-alia that income chargeable to tax has escaped assessment.

4.

Vide communication dated 27.04.2013, petitioner conveyed to the respondents that the return of income originally filed by it be treated as return of income filed in compliance of the notice of re-assessment. Further, copy of reasons recorded by the respondents for issuing notice dated 05.04.2013 were sought, which were duly provided to it by the respondents vide communication dated 12.04.2014. 5. The objections dated 09.09.2014 to the validity and legality of the re-assessment proceedings were submitted by the petitioner wherein amongst various grounds it was inter alia submitted that the claim under Section 80 IB of the Act of 1961 for the A.Y. 2010-11 has been approved by the Commissioner of Income Tax (Appeals) (hereinafter to be referred as ‘CITA’) vide its order dated 04.06.2014 and thus, the present case of the petitioner stands duly covered by the same. By way of further submissions dated 06.02.2015, it was submitted that the Income Tax Appellate Tribunal (hereinafter to be referred as ‘the Tribunal’) has arrived at a factual finding that the petitioner is entitled for deduction under section 80 IB of the Act of 1961. It was also additionally submitted that petitioner has complied with all the legal and factual requirements and there is no concealment or non disclosure on its part and thus, there is no occasion to initiate any re-assessment proceedings. (Uploaded on 08/08/2025 at 04:35:07 PM) (Downloaded on 27/10/2026 at 11:21:13 PM)

[2025:RJ-JD:34574-DB] (3 of 7) [CW-2989/2015]

6.

The said objections submitted by the petitioner came to be rejected by the respondents vide order dated 16.03.2015 aggrieved by which, the present writ petition has been filed.

7.

Learned counsel for the petitioner vehemently submitted that the order dated 16.03.2015 is not a speaking order and even the submissions made before it have not been considered. It was further submitted that the relevant fact regarding order passed by the Tribunal dated 08.10.2014, wherein for the very same project it was held that the petitioner is entitled for deduction under Section 80 IB of the Act of 1961, has not been considered by the authority, which reflects non application of mind. He further submitted that the Tribunal has held that the completion certificate gets merged in the occupancy certificate or utility certificate by the Urban Improvement Trust and thus, there was no occasion for the assessing authority to reject the objections raised by it. Learned counsel for the petitioner further submitted that the Assessing Officer having not considered the objections in its true letter and spirit has committed an error and thus, it was prayed that the order dated 06.03.2015 so also the notice dated 05.04.2013 be quashed and set aside.

8.

Per contra, learned counsel for the Income Tax Department has though opposed the submissions made by learned counsel for the petitioner, however, could not refute the fact that in the petitioner’s own case, the Tribunal has held that the completion certificate is not necessary and the petitioner is entitled for deduction under Section 80 IB of the Act of 1961. Learned counsel for the respondent-Department thus, prayed that the matter may be remanded back to the Assessing Officer to re-examine the issue in accordance with law. (Uploaded on 08/08/2025 at 04:35:07 PM) (Downloaded on 27/10/2026 at 11:21:13 PM)

[2025:RJ-JD:34574-DB] (4 of 7) [CW-2989/2015]

9.

We have considered the submissions made at the Bar and have gone through the relevant record of the case including the order dated 16.03.2015. 10. The factual details narrated above clearly show that in pursuance of the notice dated 05.04.2013, the Assessing Officer has initiated the re-assessment proceedings and while dealing with the same, the petitioner has raised objections with respect to the issuance of the notice dated 05.04.2013 issued under Section 148 read with Section 147 of the Act of 1961. The fact also disclosed that in assessee’s own case, the Tribunal has ruled in favour of the petitioner with respect to grant of deduction permissible under Section 80 IB(10) of the Act.

11.

For brevity, the findings recorded by the Tribunal in its order dated 08.10.2014 from the A.Y. 2010-11, reads as under:- “Thus, we find no force in the reasons given by the A.O. and submissions of ld. D.R., as all the pre-requisite conditions of Section 80IB(10) if the Act sand fulfilled and the assessee-company is eligible for this deduction. The completion certificate gets merged in the occupancy certificate or utility certificate by the UIT. The assessee- company applied for getting the completion certificate which was not denied and under identical facts in the A.Y. 2009-10, admittedly, the A.O. has allowed this deduction in respect of the same project. Otherwise the completion of the project on 31.03.2010 has not been in question. Thus, the project was completed within 4 years only. There is no proof that the continuation of the project is not as per the approved plan. Therfore, we are in agreement with the finding of ld. CIT(A) and dismiss ground Nos. (1) and (1.1).”

12.

We note that the assessee has produced the order of the Tribunal before the learned Assessing Officer while pressing his objections to the issuance of notice dated 05.04.2013. A perusal (Uploaded on 08/08/2025 at 04:35:07 PM) (Downloaded on 27/10/2026 at 11:21:13 PM)

[2025:RJ-JD:34574-DB] (5 of 7) [CW-2989/2015] of the order dated 16.03.2015 shows that learned Assessing Officer has not properly considered the order passed by the learned Tribunal and has merely brushed aside the same. This Court feels that the Assessing Officer was under an obligation to consider and decide the objections after taking into consideration all the materials placed before it more particularly, the order passed by the CIT(A) and the Tribunal in its correct prospective. While it is a trite law that the principle of res-judicata are not applicable in income tax proceedings, however, it does not rule out the applicability of fundamental principles of consistency, propriety and finality and thus, once a finding has been arrived by an authority more so a higher authority, then it was imperative for the assessing authority to at-least deal and consider the said submissions raised by the petitioner. However, in the instant case, the assessing authority has merely ignored the said submissions and has failed to give any finding with regard to the same. This approach cannot be accepted and such an order cannot fall within the contours of a speaking order which is the minimum requirement to be followed in light of the law laid down by Hon’ble Supreme Court in the case of GKN Driveshafts (India) Ltd. vs. Income Tax Officer & Ors. reported in 259 ITR page 19, wherein in unequivocal terms, the Hon’ble supreme Court has held that the Assessing Officer has to dispose of the objections, if filed, by passing a speaking Order. Unless there is an apparent change from one assessment year to the other, the Department cannot be permitted to take a contrary stand. It is a matter of record that in the proceedings for A.Y. 2010-11, deduction under Section 80 IB of the Act of 1961 was allowed by CIT(A) vide its order dated 04.06.2014 which was confirmed by the Tribunal vide its order dated 08.10.2014 and the said order has attained finality. The above principle has been upheld by Hon’ble the Supreme Court in (Uploaded on 08/08/2025 at 04:35:07 PM) (Downloaded on 27/10/2026 at 11:21:13 PM)

[2025:RJ-JD:34574-DB] (6 of 7) [CW-2989/2015] reported in (2006) 3 SCC 1, wherein the Hon’ble Supreme Court has held as follows:- “The courts will generally adopt an earlier pronouncement of the law or a conclusion of fact unless there is a new ground urged or a material change in the factual position. The reason why court have held parties to the opinion expressed in a decision in one assessment year to the same opinion in a subsequent year is not because of any principle of res judicata but because of the theory of precedent or the presidential value of the earlier pronouncement. Where facts and law in a subsequent assessment year are the same, no authority whether qushi- judicial or judicial can generally be permitted to take a different view. This mandate is subject only to the usual gateways of distinguishing the earlier decision or where the earlier decision in per-incuriam. However, these are fetters only on a co-ordinate bench which, falling the possibility of availing of either of these gateways, may yet differ with the view expressed and refer the matter a Bench of superior strength or in some cases to a Bench of superior jurisdiction.”

13.

Thus in view of the above, legal and factual background, the order dated 16.03.2015 cannot be sustained and deserves to be set aside. We feel that the entire material placed before the Assessing Order is required to be properly and judicially considered and a reasoned order is required to be passed after dealing with all the contentions raised and the judgments relied upon by the parties.

14.

In view of the above, the present writ petition is disposed of and the order dated 16.03.2015 is quashed and set aside. The matter is remanded back to the Assessing Officer to decide the (Uploaded on 08/08/2025 at 04:35:07 PM) (Downloaded on 27/10/2026 at 11:21:13 PM)

[2025:RJ-JD:34574-DB] (7 of 7) [CW-2989/2015] objections raised by the petitioner against issuance of the notice dated 05.04.2013 afresh in accordance with law, after giving a reasonable opportunity of hearing to the petitioner.

15.

Stay application as well as other pending application(s), if any, also stand disposed of. (ANUROOP SINGHI),J (VINIT KUMAR MATHUR),J 153-Taruna/Payal Powered by TCPDF (www.tcpdf.org) (Uploaded on 08/08/2025 at 04:35:07 PM) (Downloaded on 27/10/2026 at 11:21:13 PM)

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