THE COMMISSIONER OF INCOME TAX vs. M/S. DUKLE CONSTRUCTION

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TXA/3/2014HC BombayHCBM05003006201308 April 2014Author: F. M. REIS,HON'BLE SHRI JUSTICE Z. A. HAQ3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court found that the ITAT had properly appreciated the facts on record and its findings were in consonance with the law. The Revenue failed to point out any new fact or material that came to the AO's knowledge, which would justify the reopening of the assessment. Furthermore, the Commissioner of Income Tax (Appeals) had made a finding of fact, based on cogent appreciation of evidence, that the plot of land on which the housing project was undertaken was more than one acre in area. This finding made the assessee eligible to claim deductions under Section 80IB(10) of the Income Tax Act. The Court concluded that the impugned order of the ITAT was passed after proper appreciation of material on record and did not suffer from any infirmity. Therefore, the appeal was dismissed. No issue was expressly left undecided.

What were the facts?

This case involves an appeal by the Revenue (Commissioner of Income Tax) against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had allowed cross-objections filed by the assessee, M/s Dukle Construction, for Assessment Year 2005-06, rendering the Revenue's appeal infructuous. The core of the dispute revolves around the reopening of assessment by the Assessing Officer (AO). The Revenue's appeal to the High Court challenges the ITAT's findings on the validity of this reopening. The ITAT had previously held that the reopening was bad in law, based on the AO's alleged change of opinion and the fact that the notice for reopening was issued within four years of the relevant assessment year.

What were the issues?

1. Whether the ITAT was correct in holding that the reopening of the assessment is bad in law, under the facts and circumstances of the case? (Question of law) 2. Whether the ITAT erred in holding that the Assessing Officer issued notice under Section 148 only due to a change of opinion, when the AO had not discussed Section 80IB(10) deduction in the original assessment order? (Question of mixed law and fact, concerning Section 148 and Section 80IB(10)) 3. Whether the ITAT was correct in holding that the notice under Section 148 issued is bad in law since it was issued within four years from the end of the relevant assessment year, and the AO is free to issue notice within four years without the concept of change of opinion as per amended provisions? (Question of law, concerning Section 148) Assessee's Arguments: The assessee's cross-objections were allowed by the ITAT, leading to the Revenue's appeal being rendered infructuous. The ITAT's reasoning, as presented by the Revenue, suggests the assessee argued that the reopening was based on a change of opinion and that the notice was issued within the permissible timeframe under Section 148, implying no change of opinion was necessary. The ITAT also found that the plot of land for the housing project exceeded one acre, making the assessee eligible for deduction under Section 80IB(10). Revenue's Arguments: The Revenue argued that the ITAT erred in holding the reopening to be bad in law. Specifically, they contended that the AO did not discuss Section 80IB(10) in the original assessment order, therefore, reopening based on this deduction could not be considered a change of opinion. They relied on the decision in Techspan India (P) Ltd vs. Income-Tax Officer (2007) 158 Taxman 182 (Delhi). The Revenue also argued that the notice under Section 148 was issued within four years, and the AO was free to issue it, with no concept of change of opinion under the amended provisions.

Which sections of the Income-tax Act were involved?

Section 148,Section 80IB(10)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
-1- IN THE HIGH COURT OF BOMBAY AT GOA TAX APPEAL No. 3 OF 2014 The Commissioner of Income Tax, “Aaykar Bhavan”, Patto, Panaji, Goa. … Appellant V e r s u s M/s Dukle Construction, Mahalaxmi Chambers, 18th June Road, Panaji – Goa. … Respondent Ms. Asha A. Dessai, Advocate for the Appellant. Mr. D. E. Robinson, Advocate for the Respondent. Coram :- F. M. REIS & Z. A. HAQ, JJ. Date : 8 th April, 2014

ORAL JUDGMENT

(Per Z. A. HAQ, J.)

Heard Ms. Asha Dessai, learned Advocate for the Appellant.

2.

This Appeal is filed by the Revenue challenging the Order passed by the Income Tax Appellate Tribunal in Appeal No. 79/PNJ/2012 and CO No. 11/PNJ/2012 (A.Y. 2005-06) on 14.06.2013 allowing the cross objections filed by the Assessee and holding that the Appeal filed by the Revenue vide I.T.A.T. No. 79/PNJ/2012 is rendered infructuous. The questions of law raised by the Appellants are as follows : A. Whether the Hon'ble ITAT is correct in holding that re-opening of the assessment is bad in law, under the facts and circumstances of the case ? B. The Hon'ble ITAT erred in holding that the TXA-3-14

-2- Assessing Officer issued notice u/s. 148 only due to change of opinion, which is actually not correct as the AO has not discussed at all in the original Assessment order regarding deduction u/s 80IB(10) and therefore it cannot be said that there is a change of opinion as held by the decision given by the Hon'ble Delhi High Court in the case of Techspan India (P) Ltd vs. Income-Tax Officer (2007) 158 Taxman 182 (Delhi). C. whether the ITAT is correct in holding that notice u/s 148 issued is bad in law since the notice issued is within four years from the end of the relevant assessment year and the AO is free to issue notice within four years and there is no concept of change of opinion as per the amended provision of the Act.

3.

We have heard the learned Advocate for the Appellant and have examined the record with her assistance. We find that the Tribunal has properly appreciated the facts on the record and has given its findings which are in consonance with law. The Appellant has not been able to point out any new fact/material or information which came to the knowledge of the Assessing Officer on the basis of which the assessment was re-opened. Furthermore, the Commissioner of Income Tax (Appeals) has given a finding of fact based on cogent appreciation of the material on the record that the plot of land on which the Housing Project is undertaken if more than one acre in area and, therefore, the Assessee is eligible to claim the deductions under Section 80IB(10) of the Income Tax Act. TXA-3-14

-3-

4.

We find that the impugned Order is passed on proper appreciation of the material on the record and does not suffer from any infirmity. Therefore, the Appeal is dismissed.

5.

In the circumstances, the parties to bear their own costs. (Z. A. HAQ, J.) (F. M. REIS, J.) arp/* TXA-3-14

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