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Before: Shri Bhavnesh Saini & Shri L.P. Sahu
ORDER Per L.P. Sahu, A.M.: This is an appeal filed by the Revenue against the order of ld. CIT(A)-XXVI, New Delhi dated 14.06.2011 for the assessment year 2001-02 on the following grounds : “
1. Whether in the facts and circumstances of the case, the CIT(A) has erred in giving relief to the assessee on the ground that the AO was not justified in issuing the notices u/s 148 beyond the period of four years as per the first proviso of section 147 of the Act without appreciating the fact that proceedings under section 148 were initiated to reassess the income in view of the amendment brought about by inserting clauses (iiid) and (iiie) to section 28 and proviso to section 80. HHC, with retrospective effect from 01.04,1998 by Taxation Law (Amendment) Act, 2005, as the case of the assessee is covered under the amended sections 28 and 80. HHC".
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"Whether in the facts and circumstances of the case, the CIT(A) has erred in giving relief to the assessee on the ground that as per the revised certificate from the Chartered Accountant submitted before the CIT(A) for the first time, the FOB exports comes to Rs. 9,44,04,959/- instead of Rs. 11,06,27,051/- attracting the amendment brought in Section 80HHC, without appreciating the fact that an assessee cannot amend a return filed by him for making a claim for deduction other than by filing a revised return as held in Goetze (India) Ltd vs CIT [2006] 157 Taxman 1 (SC) and accordingly, revised certificate from Chartered Accountant could not have been taken into consideration since the revised certificate has the effect of amending the claim for deduction and no revised return has been filed in the facts of the case." 3. "Whether in the facts and circumstances of the case, the CIT(A) has erred in giving relief to the assessee on the ground that as per the revised certificate from the Chartered Accountant submitted before the CIT(A) for the first time, the FOB exports comes to Rs. 9,44,04,959/- instead of Rs. 11.06,27,051/- attracting the amendment brought in Section 80HHC, by admitting additional evidence without the conditions of Rule 46A being fulfilled since neither is it a case where the assessing officer refused to admit evidence which ought to have been admitted, nor is it a case where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the AO, nor is it a case where the appellant was prevented by sufficient cause from producing before the AO any evidence which is relevant to any ground of appeal, nor is it a case where the assessing officer has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal and further that the Ld. CIT(A) has admitted the additional evidence giving finding that the evidence is relevant and goes in the root of the matter, however the same is not sufficient under Rule 46 for admission of additional evidence since only in case the appellant was prevented by sufficient cause from producing before the AO any evidence which is ITA No. 4277/Del./2011 3 relevant to any ground of appeal can such evidence be admitted, accordingly CIT(A) has erred in admitting the same."
2. The brief facts of the case are that the assessee filed return of income on 22.10.2001 declaring income of Rs.64,86,141/-. The assessment was completed u/s. 143(3) on 25.02.2004 at income of Rs.65,06,478/-. The assessee claimed deduction u/s. 80HHC at Rs.2,23,65,300/-, which was allowed by the Assessing Officer at Rs.2,24,46,648/- on account of enhancement of income in view of disallowance of the routine telephone/car expenses. The case was reopened by issuing a notice on 28.03.2008 u/s. 148 due to the amendment brought about by Taxation Law (Amendment) Act, 2005 w.r.e. from 01.04.1998, whereby clause (iiid) and (iiie) were inserted in section 28 and proviso to section 80HHC was amended and as the assessee’s turnover was more than Rs. 10.00 crores. In response to the notice u/s. 148, the assessee filed return of income declaring an income of Rs.69,97,504/-. The assessment was completed u/s. 147/143(3) and by giving effect to the amended provisions u/s. 28 and 80HHC, the ld. AO determined the deduction u/s. 80HHC at Rs.1,70,18,866/- as against Rs.2,19,55,626/- claimed in the return filed in response ITA No. 4277/Del./2011 4 to notice u/s. 148, thereby disallowing the claim of deduction u/s. 80HHC of Rs.49,36,760/-. Being aggrieved by the order of the AO, the assessee appealed before the first appellate authority, and challenged the validity of reopening of case u/s. 147/148 beyond the period of 4 years as well as on merits. The assessee also filed additional evidence before the ld. CIT(A), viz., copies of original invoices, remittance advice and details of bills etc. The ld. CIT(A) called for the remand report from the AO and the AO objected to admit the additional evidences in its remand report which is placed at page No. 38 to 40 of the paper book. The ld. CIT(A), after considering the submissions of the assessee, quashed the reassessment proceedings initiated beyond four years from the end of relevant assessment year because the notice was issued on 28.03.2008. He also relied on some case laws. The ld. CIT(A) also deleted the disallowance of deduction u/s. 80HHC on merits by accepting the additional evidences, though the AO had disputed the admission of additional evidence. The Revenue is in appeal before the Tribunal against quashing of reassessment proceedings as well as against deletion of addition on merits.
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The ld. DR relied on the order of the Assessing Officer and submitted that the ld. CIT(A) has wrongly accepted the additional evidences u/r 46A whereas ample opportunities were granted by the Assessing Officer during the assessment proceedings. Therefore, the AO’s order should not be disturbed. He strongly relied on the grounds raised in appeal.
On the other hand, the ld. AR relied on the order of the ld. CIT(A) and submitted that the AO was not justified in reopening the case beyond four years from the end of assessment year, as held in several decisions relied by the ld. CIT(A) in the impugned order. He also relied on the order of Hon’ble Bombay High Court in the case of Vijay Silk House vs. UOI in writ petition No. 2446 of 2010 and others (copy placed on record). He further submitted that the assessee’s case is fully covered by the above order where it has been held that the amendment will take effect prospectively and not retrospectively.
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We have considered the rival submissions and have gone through the entire material available on record and we find that the ld. CIT(A) after relying on various decisions of Hon’ble higher courts has rightly held that the notice issued u/s. 148 on 28.03.2008 beyond the period of four years from the end of the relevant assessment year is not valid. Moreover, the issue under consideration, which led the AO to reopen the case of assessee, is fully covered by the decision of Hon’ble Bombay High Court in the case of Vijay Silk House vs. UOI in writ petition No. 2446 of 2010 and others (supra), wherein it has observed to follow the decision of Division Bench of Hon’ble Gujrat High Court dated 2nd July, 2012 rendered in a batch of writ petition, who disposed of the writ petitions in the following terms : “26. On consideration of the entire materials on record, we, therefore, find substance in the contention of the learned counsel for the petitioners that the impugned amendment is violative for its retrospective operation in order to overcome the decision of the Tribunal and at the same time, for depriving the benefit earlier granted to a class of assessees whose assessments were still pending although such benefit will be available to the assessees whose assessments have already been concluded. In other words, in this type of substantive amendment, retrospective operation can be given only if it is for the benefit of the assessee but not in a case where it affects even a fewer section of the assessee.
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We, accordingly, quash the impugned amendment only to this extent that the operation of the said section could be given effect from the date of the amendment and not in respect of earlier assessment years of the assessees whose export turnover is above Rs.10 “Crore. In other words, the retrospective amendment should not be detrimental to any of the assessee.”