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ITA Nos.1832 and 1837/Bang/2018 Page 21 of 22
average sale price to the customers was not accepted and the Assessing Officer re-determined that profit by invoking the provisions of section 80IA(8) and determined on the basis of average purchase price from Tata Power Companies. The ITAT order in the AY 2000-01 indicates that the issue in appeal was a quantum of profit generated by the Dahanu Unit. Since this quantum of profit is being re-determined at 16% on the basis of reasonable return considered while fixation of tariff by the MERC, we are of the opinion that, the issue being similar, the orders of the AO merged with that of ITAT and accordingly the Assessing Officer looses his jurisdiction to reopen the assessment as second proviso to section 147 is clearly applicable. Since the issue of profit for deduction under section 80IA, having been made subject matter of appeal before the CIT (A) and the ITAT, the said issue of determination of profit for the purpose of 801A(10) has merged with the order of the appellate authorities as a whole and hence, it was no longer amenable to the reassessment proceedings u/s 147 by virtue of second proviso to section 147. On this principles also, since in both the assessment years, the issue was originally considered and agitated at the level of the ITAT, the reopening on the same issue is to be considered as bad in law. We need not examine the various case law relied on this issue. Suffice to say that on facts and in law the issue having merged with the orders of ITAT was not amenable for reassessment".
The aforesaid decision is squarely applicable to the facts of the appellant bank case. In this case also, the additions made by the learned Assessing Officer all pertain to the matters which got merged with the order of CIT(A). Therefore, the same could not have been considered in the re-opened assessment as per the Third Proviso to section 147. The decision of the ITAT, Mumbai Bench, in the case of Reliance Energy Ltd., Vs. DCIT (2010) 40 SOT 314 (Mum) on similar lines also supports the plea of the assessee in this regard.
ITA Nos.1832 and 1837/Bang/2018 Page 22 of 22
For the reasons given above, we allow grounds raised with regard to validity of initiation of reassessment proceedings u/s.147 of the Act and hold that the proceedings u/s.147 of the Act were not validly initiated. Therefore, order of the reassessment is liable to be annulled and is hereby annulled. Since the re-assessment order has been annulled, the other grounds raised by the Assessee in its appeal and by the Revenue in its appeal do not require any adjudication.
In the result, the appeal of the assessee is allowed while the appeal of the Revenue is dismissed.
Pronounced in the open court on the date mentioned on the caption page.
Sd/- Sd/- (CHANDRA POOJARI) ( N. V. VASUDEVAN) Accountant Member Vice President Bangalore, Dated: 13.1.2021. /NS/* Copy to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR, ITAT, Bangalore. 6. Guard file By order Assistant Registrar ITAT, Bangalore.