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Income Tax Appellate Tribunal, DELHI BENCH ‘F’, NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI SUDHIR KUMAR
ORDER
PER SUDHIR KUMAR: JUDICIAL MEMBER:
The above captioned appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-38, Delhi [hereinafter referred to as “CIT(A)”], vide order dated 19.03.2019 pertaining to assessment year 2012-13 arises out of the assessment order passed by the Add. CIT. Special Range -7, New Delhi dated 31.12.2017 under Section 147/143(3) of the Income Tax Act,1961[hereinafter referred as ‘the Act’] 2. The assessee has raised the following grounds of appeal: Ground No. 1: That on the facts and in the circumstances of the case and in law, the appeal order passed by learned (Ld. CIT (A)) is bad in law and needs to be quashed. Ground No. 2: That on the facts and in the circumstances of the case and in law, the learned (Ld. CIT (A)), ha erred in confirming the re-assessment proceedings without appreciating the fact that 2.1 Andrei The reassessment was made after expiry of four years without re-course to any fresh and tangible material on record and the re-assessment was drawn on mere change of opinion. 2.2 That the impugned order disposing the objections against the "reasons for reopening" passec by the Ld. Addl. CIT is cryptic and non-speaking. 2.3 That the final re-assessment order passed by the Ld. Addl. CIT under Section 147 read with Section 143(3) of the Act is cryptic and non-speaking.
Ground No. 3: 3.1 That on the Dots and in the circumstances of the cave not in low, Ld. CITT (A) confirming the re computing the deduction claimed confer Section 3A of the Act and in contravention of the provision of the Act. 3.2 Than on the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in confirming the mechanism for set off of brought forward unabsorbed depreciation of Rs. 28,76,36,805 pertaining to AY 2008-09 in contravention of provisions of the Act. 3.3 Without giving a reasonable opportunity, the ld. CIT (A) has erred in holding entice income is not derived from the industrial undertaking eligible for deduction under section S01A of the Act. In doing so, the Ld. CIT (A) ignored the fact that the appellant has only once undertaking from which business eligible for deduction under section 80IA was carried out. Ground No. 4: That on the facts and circumstances of the case and in law, the Ld. Addl. CIT has erred in initiating penalty proceedings under section 274 read with section 271(1)(c) of the Act mechanically and without recording any adequate satisfaction for such initiation. That the above grounds are independent and without prejudice to each other. The Appellant craves for leave to add, alter, amend or vary any of the above grounds either before or at the time of hearing.
The brief facts of the case are that the assessee is a Joint Venture of Tata Power Company Limited and power Grid Corporation of India limited with 52% and 49% shareholding, respectively. The assessee company has been setup to construct, operate and maintain 1166 kilometers of five 400 KV. double circuit transmission Lines and one 220kv Double Circuit transmission Line from Siliguri in west Bengal to Mandola in Uttar Pradesh under the “ Buli-Own- Operation -transfer “ BOOT basis. The assessee company commenced the commercial operation of transmission of power in phases in F.Y. 2006-07. The assessee company exercised its rights to claim deduction u/s 80IA of the Act after fulfilling all the pre- requisites as mentioned under chapter VI A of the beginning from the assessment year 2012-13.
The assessee company has furnished its return of income on 28-09- 2012 declaring a total income of Rs.28,76,36,810/- under the normal provision of the Act. Subsequently, the assessee e-filed a revised return of income on 28-09-2022 declaring income Nil after declaring set-off of brought forward unabsorbed depreciation of Rs.28,76,36,810/-. The return of income of the assessee was selected for scrutiny and notice under Section 143(2) of the Act was issued on 20-08-2013, which was duly served upon the assessee company. After considering the reply submitted by the assessee company the ld. Assessing officer completed the assessment under Section 143(3) of the Act on 10-02-2015 and made the addition of Rs. 9,07,57,000/-. Aggrieved with the order of the ld. Assessing officer, the assessee company has filed the appeal before the Ld.CIT(A), who vide his order dated 20-01-2016 allowed the appeal.
The case of the assessee company was re-opened by the Addl. Commissioner of income Tax Special Range -7 New Delhi and notice u/s 148 of the Act was issued to the assessee which was complied by the assessee. The ld. Assessing officer has re-computed the income of the assessee company as under: Income from eligible business (a) Rs.103,26,21,467/- B/F depreciation of AY 2008-09(b) Rs. 28,76,36,805/- Income from eligible business for Rs. 74,49 84 662/- the year 2012-13 (a-b)
Capital gains Rs. 3,52,52,427/- Other Sources Rs. 11,33,18,252/- Total income (a) Rs. 89,35,55,341/- Deduction to be claimed u/s 80IA (Restricted to income from eligible business) Rs. 74,49,84,662/- Taxable Income Rs. 14,85,70,679/- The assessing officer has also started the penalty proceedings against the assessee.
Aggrieved the order of the ld. Assessing officer the assessee company has filed the appeal before the Ld CIT(A), who vide his order dated 19-03-2019 dismissed the appeal, against which the assessee is in appeal before the Tribunal.
Ld. A.R of the assessee company has stated that reasons to believe can never be the outcome of a change of opinion. He has also stated that in this case no new material has been placed on record and this is a case of mere change of opinion. He has further submitted that during the course of original assessment the assessee has submitted all documents as copy of the Audited Accounts, copy of the tax audit report, accountant’s report in form 10CCB etc. He has relied the case of Commissioner of Income-Tax-VI , New Delhi vs Usha International Ltd. [2012] 25 taxmann.com 200 (Delhi) In this case the following substantial question of law have been referred to the full Bench : "(1) What is meant by the term "change of opinion? (ii) Whether assessment proceedings can be validly reopened under Section 147
of the Act, even within four year, if an assessee has furnished full and true particulars at the time of original assessment with reference to income alleged to have escaped assessment and whether and when in such cases reopening is valid or invalid on the ground of change of opinion? (iii) Whether the bar or prohibition under the principle "change of opinion" will apply even when the Assessing Officer has not asked any question or query with respect to an entry/note, but there is evidence and material to show that the Assessing Officer had raised queries and questions on other aspects? (iv) Whether and in what circumstances Section 114(e) of the Evidence Act can be applied and it can be held that it is a case of change of opinion?"
In this case, the Hon’ble Delhi High Court further held as under: “22. I find it difficult to assent to the contention of the revenue that section 114(e) of the Evidence Act was incorrectly invoked by the Full Bench of this court in Kelvinator of India (supra). It has been held by the Full Bench that the section applies to an assessment order made under section 143(3) of the Act and the judgment has been affirmed by the Supreme Court. The last word on the subject has been said. The contention cannot even be heard. 23. On the first question referred to this Full Bench as to the meaning of the term "change of opinion", I have nothing to add to the draft proposed. As to the first part of the second question my answer would be that the assessment proceedings cannot be validly reopened under section 147 of the Act even within four years, if an assessee has furnished full and true particulars at the time of original assessment with reference to the income alleged to have escaped assessment, if the original assessment was made u/s 143(3). My answer to the second part of the second question is that the issue is concluded by the judgment of the Full Bench of this court in Kelvinator of India Ltd. (supra).”
In the case of CIT vs Kelvinator of India Ltd. [2002] 256 ITR 1(Delhi), the Full Bench of the Hon’ble High Court held as under; "It is well-settled principle of interpretation of statues that the entire statute should be read as a whole and the same has to be considered thereafter chapter by chapter and then section by section and ultimately word by word. It is not in dispute that the Assessing Officer does not have any jurisdiction to review his own order. His jurisdiction is confined only to rectification of mistakes as contained in section 154 of the Income-tax Act, 1961. The power of rectification of mistakes conferred upon the Income-tax Officer is circumscribed by the provisions of section 154 of the Act. The said power can be exercised when the mistake is apparent. Even a mistake cannot be rectified where it may be a mere possible view or where the issues are debatable. Income-tax Appellate Tribunal has limited jurisdiction under section 254(2) of the Act. It is a well-settled principle of law that what cannot be done directly cannot be done indirectly. If the Income-tax Officer does not possess the power of review, he cannot be permitted to achieve the said object by taking recourse to initiating a proceeding of reassessment. In a case of this nature the Revenue is not without remedy. Section 263 of the Act empowers the Commissioner to review an order which is prejudicial to the Revenue.
The scope and effect of section 147 as substituted with effect from April 1, 1989, by the Direct Tax Laws (Amendment) Act, 1987, and subsequently amended by the Direct Tax Laws (Amendment) Act, 1989, with effect from April 1,1989, as also of sections 148 to 152 have been elaborated in Circular No.549, dated October 31,1989. A perusal of clause 7.2 of the said circular makes it clear that the amendment had been carried out only with a view to allay fears that the omission of the expression "reason to believe' from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on a mere change of opinion. It is, therefore, evident that even according to the Central Board of Direct Taxes a mere change of opinion cannot form the basis for reopening a completed assessment. An order of assessment can be passed either in terms of subsection (1) of section 143 or sub-section (3) of section 143. When a regular order of assessment is passed in terms of the sub- section (3) of section 143 a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of clause (e) of section 114 of the Indian Evidence Act, 1872, judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the Assessing Officer to reopen the proceeding without anything further, the same would amount to giving a premium to san authority exercising quasi- judicial function to take benefit of its own wrong. Hence, it is clear that section 147 of the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceedings upon a mere change of opinion".
Ld. DR has supported the order of the below authorities and ought the dismissal of the appeal.
In the present case, the return of income for the A.Y. 2012-13 of the assessee company was selected for scrutiny and the addition of amounting at Rs 9,07,57,000/- made by the ld. Assessing officer was deleted by the Ld CIT(A). Thereafter, the case of the assessee company was re-opened and notice under Section 148 of the Act was issued. The Assessing Officer re-computed the income under the normal provision of the Act. During the original assessment the assessing company has produced the relevant documents and filed the details of deduction claimed under Section 80 IA of the Act. Perusal of the original assessment order reveals that the assessee company has disclosed all the material facts fully and truly at the time of the original assessment proceedings and the Assessing officer was well aware about the primary facts and the deduction claimed u/s 80IA of the Act. In the re-assessment proceedings no new material was provided by the assessee, the re- assessment cannot be re-opened merely because subsequently the assessing officer changes his opinion. Because the assessee company has furnished full and truly particulars at the time of original assessment and the assessing officer applied his mind to the material and accepted the view canvassed by the assessee, then mere change of opinion the assessment cannot be re-opened. Following the above judicial decisions, we are the opinion that the re-opening of assessment of the assessee company is bad in law and liable to be quashed and thus, we quash the same accordingly.
In the result, the appeal of the assessee is allowed.