ACIT, JAIPUR vs. RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 334/JP/2016 fu/kZkj.k o"kZ@Assessment Year : 2007-08 cuke The ACIT, M/s Rajasthan State Industrial Vs. Circle- 6, Development & Investment Corporation Jaipur. Ltd., Udhyog Bhawan, Tilak Nagar, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABCR4695J vihykFkhZ@Appellant izR;FkhZ@Respondent

CO No. 4/JP/2016 (Arising out of ITA No. 334/JP/2016) fu/kZkj.k o"kZ@Assessment Year : 2007-08 cuke M/s Rajasthan State Industrial The ACIT, Vs. Development & Investment Circle- 6, Corporation Ltd., Udhyog Jaipur. Bhawan, Tilak Nagar, Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AABCR4695J vihykFkhZ@Appellant izR;FkhZ@Respondent

fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal(C.A.) jktLo dh vksj ls@ Revenue by : Shri Varinder Mehta (CIT) lquokbZ dh rkjh[k@ Date of Hearing : 07/12/2017 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 09/02/2018 vkns'k@ ORDER

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur PER: VIJAY PAL RAO, J.M.

This appeal by the Revenue and cross objection by the assessee

are directed against the order dated 25.01.2016 of ld. CIT(A), Jaipur for

the assessment year 2007-08. The Revenue has raised the following

grounds:-

“ 1. Whether on the facts and in the circumstances of the case and in law, the CIT(A) has erred in allowing deduction of Rs. 11,52,52,892/- on interest income (including penal interest income Rs. 11,40,17,559/- and other income of Rs. 12,35,333/- 2. The appellant craves its rights to add, amend or alter any of the grounds on or before the hearing.”

grounds:-

“1 The ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in upholding the validity of order passed u/s 147 of the IT Act, 1961. 2. The Ld. Commissioner of Income Tax (Appeals) has erred on facts and in law in not allowing the deduction u/s 80IA on other miscellaneous income of Rs. 26,02,007/-. 3. The assessee carves right to add, alter, amend, and modify any of the ground of appeal. 4. necessary cost be allowed to the assessee.”

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur Since, the assessee has raised a legal issue regarding the validity of

reopening which goes to the rood of the matter, therefore, first we take

up ground No. 1 of the cross objection of the assessee.

consideration on 22.10.2007 declaring income of Rs. 26,67,24,890/-

after claiming his deduction u/s 80IA (4) (iii) of the Act of Rs.

56,84,24,379/-. The AO completed the scrutiny assessment u/s 143(3)

of the Act vide order dated 24.12.2009 whereby the AO allowed the

deduction u/s 80IA of the Act and assessed the total income of the

assessee at Rs. 29,91,67,100/-. Thereafter the AO issue a notice u/s

148 of the Act on 23.03.2012 whereby proposed to disallowance the

expenditure of Rs. 1,28,37,888/- incurred on maintenance of

transferred area. The reassessment u/s 143(3) r.w.s. 147 was

completed on 01.03.2013. The Assessing Officer again issued a notice

u/s 148 dated 25.03.2014 on the ground that assessee claimed

deduction u/s 80IA on other income not connected with the eligible

business of developing, maintaining and operating industrial parks as a

result of which the assessee was allowed excess deduction u/s 80IA of

Rs. 11,78,54,899/-. The assessee raised the objections against the

notice issued u/s 148 vide letter dated 11.06.2014 however, the AO 3

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur rejected the objection raised by the assessee vide order dated

14.11.2014. The AO completed the second reassessment u/s 143(3)

r.w.s. 147 vide order dated 31.12.2014 whereby the AO disallowed the

deduction u/s 80IA on interest income including penal interest and

other income items. The assessee challenged the action of the AO

before the ld. CIT(A) and also raised the objects against the validity of

reopening however, the ld. CIT(A) rejected the objections raised by the

assessee against the validity of the reopening. The ld. CIT(A) allowed

part relief to the assessee and sustained the disallowance of deduction

u/s 80IA of the Act in respect of penal interest and other income. Thus,

both Revenue as well as assessee are aggrieved by the impugned order

of ld. CIT(A) and filed the appeal and cross objection before this

Tribunal.

of original assessment proceeding, assessee filed the audit report u/s

80IA of the Act along with the balance sheet and profit & loss accounts

of various industrial parks eligible for deduction u/s 80IA and

notification issued under this Act. The ld. AR has submitted that in the

income & expenditure the interest income including penal interest and

other income are separately mentioned. Therefore, it is incorrect on the 4

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur part of the lower authorities to held that assessee has not disclosed

fully and truly all material facts necessary for its assessment. In fact the

AO after considering the same has allowed the deduction u/s 80IA while

passing the original assessment u/s 143(3) dated 24.02.2009. He has

further submitted that the reopening is based on change of opinion and

when there are two views possible on the allowability of deduction u/s

80IA in respect of interest income on late payment by the allottees

then, the reopening is bad in law. In support of his contention he has

relied upon the decision of Hon’ble jurisdiction High Court in case of

CIT vs. Hindustan Zinc Ltd. 241 Taxman 392 and submitted that

the Hon’ble Hight Court has held that formation of belief by the AO

regarding escaped income was based on re-appreciation of material

already available on record at the time of scrutiny assessment which

amounted to mere change of opinion. Reopening of completed

assessment without any fresh material, merely on basis of change of

opinion of the AO was without jurisdiction and patently illegal. The ld.

AR has then relied upon the decision of Hon’ble Delhi High Court in case

of Pr. CIT vs. Tupperware India Pvt. Ltd. 127 DTR 161 as well as

decision of Hon’ble Supreme Court in case of CIT vs. Kelvinator of

Indian Ltd. 320 ITR 561 and submitted that when there was no 5

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur material with the AO so as to constitute the reason to belief that the

income has escaped assessment then, reopening is not valid. The ld. AR

has submitted that the ld. CIT(A) has relied upon the decision of

Hon’ble Bombay High Court in case of Eleganza Jewellery Ltd. vs.

CIT 364 ITR 132 however, this decision is distinguishable on the fact

in as much as in the case of the assessee there has been full and true

discloser of all relevant material necessary for assessment. Thus, the ld.

AR has submitted that the reopening of the assessment is bad in law

and consequently the reassessment made by the AO is liable to be

quashed.

report and books of accounts would not constitute discloser of relevant

facts fully and truly. He has referred to the explanation-1 to section 147

of the Act and submitted that production of books of account or other

evidence from which the material evidence could with due diligence has

been discovered by the AO will not amount to discloser within the

meaning of proviso to section 147 of the Act. He has further submitted

that as per the explanation 2 excessive allowance under the Act is also

deem to be income chargeable tax has escaped assessment. He has

relied upon the orders of the authorities below. 6

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur 6. We have considered the rival submissions as well as relevant

material on record. There is no dispute that the original assessment was

completed u/s 143(3) on 24.12.2009 and thereafter the AO reopen the

assessment and completed the reassessment u/s 143(3) r.w.s. 147 of

the Act on 01.03.2013. Further, the AO issued a noticed u/s 148 on

25.03.2014 proposed to disallow the claim of deduction u/s 80IA on

interest and other incomes. Thus, it is clear that after completing the

original assessment u/s 143(3) of the Act as well as reassessment u/s

147 of the Act, the AO has made second attempt to assess the income

which has escaped assessment. The reasons for reopening of the

assessment has been recorded by the AO contained the details of

interest income and other income which in the opinion of the AO are

not eligible for deduction u/s 80IA of the Act in view of the various

decisions including the decision of Hon’ble Supreme court in case of

Liberty India vs. CIT 317 ITR 218. It is pertinent to note that in the

reasons recorded for reopening of the assessment the Assessing Officer

has not stated that any new material or information came to his

knowledge after completion of assessment u/s 143(3) on 24.12.2009 or

after completion of the assessment u/s 143(3) r.w.w. 147 on

01.03.2013. The AO has taken all details from the assessment record 7

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur and even the decision as referred by the AO in the reasons recorded for

reopening are prior to the assessment framed u/s 143(3) on

24.12.2009. Therefore, there is no dispute that the AO has proposed to

reopen the assessment by re-appreciating and re-evaluating the

material already available on assessment record. Neither there was any

change in the material available with the AO or any other information

received thereafter nor any change in the judicial authority on the point

after completion of assessment u/s 143(3) of the Act. There is no

quarrel that mere production of books of account would not necessarily

be amount to discloser of fully and truly all the facts necessary for

assessment. However, in the case in hand the assessee has claimed the

deduction u/s 80IA and as per the details of income in the income and

expenditure account as well as in the audit report filed by the assessee,

it is clear that the assessee has given the incomes under separate

heads making it obvious and apparent the nature of income and items

of income. Further, the Assessing Officer even did not disturb the

original order of allowing deduction u/s 80IA while considering the first

reassessment u/s 143(3) r.w.s. 147 on 01.03.2013. It is not the case of

the Department that nitty-gritty of the nature of income on which the

assessee claimed of deduction u/s 80IA of the Act could have been 8

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur ascertained by the AO only after applying due diligence but all the

details were available in plain and simple form under separate heads

and items of income in the income and expenditure account filed by the

assessee. Since, the Assessing Officer has formed its belief on the basis

of the material available on record without any fresh evidence or

material came to the knowledge of the Assessing officer, the opinion

form by the AO on the basis of the re-appreciation of material already

available on record is nothing but mere change of opinion. The Hon’ble

jurisdiction High Court in case of CIT Vs. Hindustan Zinz Ltd.(supra)

while considering an identical issue as held in paras 4 to 12 as under:-

“4. We have considered the submissions of the learned counsel for the Revenue and perused the material on record. 5. Indisputably, as per the provision of Section 147 of the Act, the Assessing Officer is empowered to initiate the re- assessment proceedings if any income of the assessee chargeable to tax has escaped assessment for any assessment year. But then, before initiating the re-assessment proceedings, the AO has to record the reasons in terms of sub-section (2) of Section 148, for formation of the belief that any income of the assessee chargeable to tax for the relevant assessment year has escaped assessment. As laid down by the Hon'ble Supreme Court, the belief entertained by the Assessing Officer must not be arbitrary or irrational, it must be reasonable and based on material on record. The assumption of jurisdiction by the Assessing Officer under the provisions of the Act pre-supposes due application of mind by the Assessing Officer on the material on record and 9

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur formation of the belief by the Assessing Officer that the income has escaped assessment cannot be based on whims and fancy, there must exists rational and intelligible nexus between the reasons and the belief. 6. In the matter of Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC), the Hon'ble Supreme Court while dealing with the ambit and scope of the provisions of Section 34 of the Indian Income Tax, 1922, which were similar to the provisions of Section 147 of the Act of 1961 explained the purports of Section 34, as under:— 'To confer jurisdiction under this section to issue notice in respect of assessments beyond the period of four years, but within a period of eight years, from the end of the relevant year two conditions have therefore to be satisfied. The first is that the Income-tax Officer must have reason to believe that income, profits or gains chargeable to income-tax have been under- assessed. The second is that he must have also reason to believe that such "under-assessment", has occurred by reason of either (i) omission or failure on the part of an assessee to make a return of his income under section 22, or (ii) omission or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for that year. Both these conditions are conditions precedent to be satisfied before the Income-tax Officer could have jurisdiction to issue a notice for the assessment or reassessment beyond the period of four years, but within the period of eight years, from the end of the year in question.' The Hon'ble Supreme court further observed that it is duty of every assessee to disclose fully and truly all material facts necessary for his assessment. But, his duty does not extend beyond this. The Hon'ble Supreme Court opined that once all primary facts are before the Assessing Authority, he requires no further assistance by way of disclosure . It is for him to decide 10

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. 7. In the matter of S. Narayanappa and Others v. Commissioner of Income Tax, Bangalore [1967] 63 ITR 219, the Hon'ble Supreme Court while relying upon the decision in the matter of Calcutta Discount Co. Ltd. (supra), has observed as under : 'But the legal position is that if there are in fact some reasonable grounds for the Income-tax Officer to believe that there had been any non-disclosure as regards any fact, which could have a material baring on the question of under-assessment, that would be sufficient to give jurisdiction to the Income Tax Officer to issue the notice under section 34. Whether these grounds are adequate or not is not a matter for the court to investigate. In other words, the sufficiency of the grounds which induced the Income-tax Officer to act is not a justiciable issue. It is of course open for the assessee to contend that the Income-tax Officer did not hold the belief that there had been such non-disclosure. In other words, the existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. Again the expression "reason to believe" in section 34 does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The belief must be held in good faith: it cannot be merely a pretence. To put it differently, it is open to the court to examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting proceedings under section 34 of the Act is open to challenge in a court of law.' (Emphasis Supplied) 8. In the matter of ITO v. Lakhmani Mewal Das[1976] 103 ITR 437, the Hon'ble Supreme Court has observed as under : "Production before the Income-tax Officer of the account books or other evidence from which material evidence could with due 11

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur diligence amount to disclosure contemplated by law. The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that his duty ends. It is for the Income-tax Officer to draw the correct inference from the primary facts. It is no responsibility of the assessee to advice the Income-tax Officer with regard to the inference which he should draw from the primary facts. If an Income-tax Officer draws an inference which appears subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment. The grounds or reasons which lead to the formation of the belief contemplated by section 147 (a) of the Act must have a material bearing on the question of escapement of income of the assessee from assessment because of his failure or omission to disclose fully and truly all material facts. Once there exist reasonable grounds for the Income-tax Officer to form the above belief, that would be sufficient to clothe him with jurisdiction to issue notice. Whether the grounds are adequate or not is not a matter for the court to investigate. The sufficiency of the grounds which induce the Income-tax Officer to act is, therefore, not a justiciable issue. It is, of course, open to the assessee to contend that the Income- tax Officer did not hold the belief that there had been such non- disclosure. The existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. The expression "reason to believe" does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The reason must be held in good faith. It cannot be merely a pretense. It is open to the court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur proceedings in respect of income escaping assessment is open to challenge in a court of law." The Hon'ble Supreme Court further observed :— "As stated earlier, the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income -tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts." (Emphasis Supplied) 9. In the matter of Ganga Saran & Sons (P.) Ltd. v. ITO [1981] 130 ITR 1/6 Taxman 14 (SC), the Hon'ble Supreme Court held as under:— "6. It is well settled as a result of several decisions of this Court that two distinct conditions must be satisfied before the Income Tax Officer can assume jurisdiction to issue notice under Section 147(a). First, he must have reason to believe that the income of the assessee has escaped assessment and secondly, he must have reason to believe that such escapement is by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. If either of these conditions is not fulfilled, the notice issued by the Income Tax Officer would be without jurisdiction. The important words under Section 147 (a) are "has reason to believe" and these words are stronger than the words " is satisfied". The belief entertained by the Income Tax Officer must not be arbitrary or irrational. It must be reasonable or in other words it must be based on reasons which are relevant and material. The court, of course, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the Income Tax Officer in coming to the belief, but the court can certainly examine whether 13

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under Section 147(a). If there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Income Tax Officer could not have reason to believe that any such escapement was by reason of the assessee had escaped assessment and such escapement was by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts and the notice issued by him would be liable to be struck down as invalid." (Emphasis Supplied) 10. In the matter of Sri Krishna (P.) Ltd. v. ITO [1996] 221 ITR 538/87 Taxman 315, the Hon'ble Supreme Court has observed as under : "The Income-tax Officer can issue notice under section 148 of the Income-tax Act,1961, proposing to reopen an assessment only where he has reason to believe that on account of either the omission or failure on the part of the assessee to file the return or on account of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that year, income has escaped assessment. The existence of the reason(s) to believe is intended to be a check, a limitation, upon his power to reopen the assessment. Section 148(2) imposes a further check upon the said power, viz., the requirement of recording of reasons for such reopening by the Income-tax Officer. Section 151 imposes yet another check upon the said power, viz., the Commissioner or the Board, as the case may be, has to be satisfied, on the basis of the reasons recorded by the Income-tax Officer, that it is a fit case for issuance of such a notice. The power conferred upon the Income-tax Officer by sections 147 and 148 is thus not an unbridled one. It is hedged in

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur with several safeguards conceived in the interest of eliminating room for abuse of this power by the Assessing Officers. The idea was to save the assessees from harassment resulting from mechanical reopening of assessments but this protection avails only to those assessees who disclose all material facts truly and fully. Every disclosure is not and cannot be treated to be true and full disclosure. A disclosure may be a false one or a true one. It may be a full disclosure or it may not be. A partial disclosure may very often be a misleading one. What is required is a full and true disclosure of all material facts necessary for making assessment for that year. All the requirements stipulated by section 147 must be given due and equal weight." It was further observed that : "Since the belief is that of the Income-tax Officer, the sufficiency of reasons for forming the belief is not for the court to judge but it is open to an assessee to establish that, in fact there existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the court may look into the conclusion arrived at by the Income-tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief." (Emphasis Supplied) 11. In the matter of CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561/187 Taxman 312 (SC), the Hon'ble Supreme Court held: "However, one needs to give a schematic interpretation to the words 'reason to believe', failing which section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of 'mere change of opinion', which cannot be per se reason to reopen. One must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review; he has the power to 15

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur reassess, but the reassessment has to be based on fulfilment of certain pre-conditions and if the concept of 'change of opinion' is removed as contended on behalf of the department, then in the garb of reopening the assessment, review would take place. One must treat the concept of 'change of opinion' as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1-4- 1989, the Assessing Officer has power to reopen, provided there is 'tangible material' to come to conclusion that there is escapement of income from assessment. Under the Direct Tax Laws (Amendment) Act, 1987, the Parliament not only deleted the words 'reason to believe', the Parliament reintroduced the said expression and deleted the word 'opinion' on the ground that it would vest arbitrary powers in the Assessing Officer." (Emphasis Supplied) 12. In the backdrop of the settled position of law noticed hereinabove adverting to the facts of the present case, it is to be noticed that the assessee had made true and full disclosure of all relevant facts relating to the claim of additional depreciation and also in respect of claim for grant of deduction under Section 80 IA. A separate audit report in the prescribed form 10CCB in support of the claim for deduction under Section 80IA/80IB was also duly submitted. The assessee had also submitted reply pursuant to all queries made by AO during the assessment proceedings under Section 143(3) of the Act. In this view of the matter, the contention sought to be raised by the Revenue about non-disclosure on the basis of the failure on the part of the assessee in mentioned bifurcated amount of additional depreciation allowable in the depreciation chart is absolutely baseless. It is to be noticed that all that has been said by the AO is that after scrutiny assessment, it was observed that assessee has made incorrect claim of additional depreciation on CPP whereas, the claim for additional depreciation on CPP was allowed by the AO while framing the assessment under Section 143(3) after conscious consideration of the material on record. It 16

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur is not even the case of the Revenue that the formation of the belief regarding the escapement of the assessment by the AO is based on any new material coming on record. Apparently, the formation of the belief by the AO regarding escapement of the assessment is based on re-appreciation of the material already available on record at the time of scrutiny assessment which amounts to mere change of opinion. Obviously, in the garb of purported exercise of the power to reassess, the AO cannot be permitted to review his own order or the order passed by his predecessor. Thus, the finding arrived at by the ITAT that the reassessment proceedings initiated by the AO by mere change of opinion is patently illegal, cannot be faulted with.”

A similar view has been taken by the Hon’ble Delhi High Court in case of

Pr. CIT vs. Tupperware India Pvt. Ltd. (Supra). We further note that it

is not the case of earning the interest income from the surplus fund

deposited in the bank or other incomes are not connected with the

business activity of the assessee developing and maintaining industrial

parks but the interest and penal interest received by the assessee in

respect of the late payment made by the allottees. Further, the other

incomes though it is very small amount is also in respect of the

maintenance and fee for sanction of plans etc and therefore, it is

apparent that on this issue there is a possibility of two views. When the

Assessing Officer has allowed the claim of the assessee u/s 80IA in the

original assessment claim u/s 143(3) and also not disturbing the said 17

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur claim in the first reassessment order passed u/s 143(3) r.w.s. 147 of

the Act then the reopening for the purpose of the disallowing the said

deduction on the issue on which two views are possible is not

permissible in the absence of any fresh material came to the knowledge

of the AO which could lead to the formation of belief that the income

chargeable to tax has escaped assessment due to excess deduction u/s

80IA of the Act allowed in the original assessment. It is not the case of

claim of deduction u/s 80IA of the Act allowed by the AO which is

absolutely not permissible under the Act but the opinion of the AO in

allowing the claim in the original assessment u/s 143(3) is a possible

view. Accordingly, in view of the facts that the interest and penal

interest was received as part of the other Revenue earned by the

assessee from the allottees and from the activity of developing,

maintaining and operating the industrial parks then the case of the

assessee does not fall in the category of absolute impermissible claim.

Hence, the reopening based on change of opinion is not permissible

under the law and the same is held as invalid. Accordingly, we set aside

the reopening u/s 148 as invalid and consequently quash the

reassessment framed by the AO.

ITA No. 334 & CO.No. 04 /JP/2016 ACIT vs. M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur 7. Since, we have set aside the reopening of the assessment as

invalid and quashed the reassessment, therefore, the other issues

raised on the merits of deduction u/s 80IA become infructuous.

In the result, the Revenue appeal is dismissed and cross

objection of assessee’s appeal is allowed.

Order pronounced in the open court on 09/02/2018.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 09/02/2018. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- ACIT, Circle-6, Jaipur. 2. izR;FkhZ@ The Respondent- M/s Rajasthan State Industrial Development & Investment Corporation Ltd., Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 334/JP/2016 & CO No. 4/JP/2016} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत