The Income Tax Appellate Tribunal Ahmedabab Bench ‘D’ by its common order dated 12.08.2011 dismissed two ITAs being ITA No. 3233 of 2005 & ITA No. 3235 of 2008 relating to the Assessment Years 2001-2002 and 2003-2004 respectively. The present appeal by the Revenue is directed against the said common order in so far as it corresponds to ITA No. 3233 of 2008 corresponding to Assessment Year 2001-2002.
1.1 The appellant has raised the following questions proposing it them as substantial questions of law :
“(A) Whether on the facts and circumstances of the case, the Hon'ble Tribunal has justified in holding that reopening of assessment u/s 147 was bad in law without appreciating that Explanation 2(c) (iv) of section 147 was applicable in this case ?
(B) Whether on the facts and circumstances of the case, the Hon'ble Tribunal has justified in holding that reopening of assessment in this case was mere change of opinion without appreciating the fact that in original assessment deduction u/s 80IA was computed by excluding job work income without considering exclusion of interest income also for computation of said deduction ?
(C) Whether on the facts and circumstances of the case, the Hon'ble Tribunal has justified in holding that original assessment order got merged with appellate order dated 13.08.2004 without considering that issue of excluding interest expenses from computation of deduction u/s 80IA was not before the CIT(A)?”
2. We heard Mr. Sudhir Mehta, learned advocate for the appellant- department.
3. The issue involved in the appeal is with regard to the exercise of powers for reopening the assessment under section 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act' for sake of brevity). The facts in the background are that the original assessment for the Assessment Year 2001-2002 was completed on 29.03.2004 in which the Assessing Officer disallowed deduction under section 80-IA of the Act. The disallowance was, however, came to be deleted by the Commissioner of Income Tax (Appeal).
3.1 Thereafter upon by a notice dated 31.03.2006 issued under section 148, the assessment was sought to be reopened. It was on the ground that the Assessing Officer wanted to reconsider the deduction in question. He recomputed the deduction and withdrew the benefit to the extent of 30% of the total interest income. The CIT(A) allowed the appeal of the assessee by his order dated 6/6/2008 on the ground that the reopening was based on a change of opinion which was not permissible in law.
3.2 The department approached the Income Tax Appellate Tribunal by way of an appeal. The appeal came to be dismissed as per the impugned order wherein the Tribunal observed and held as under :
“....it is clear that all the facts, were before the AO at the original assessment proceedings with regard to deduction u/s 80IA of the IT Act on which the AO called for explanation of the assessment and the assessee filed reply before the AO and on examination of the assessee and the AO granted part relief to the assessee. The original order remained subject matter in appeal before the learned CIT(A) who has also allowed relief to the assessee. The order of the learned CIT(A) against the original order was passed on 13-08-2004 where as the reassessment order was framed on 28/12/2007. The original assessment order therefore got merged with the appellate order dated 13/08/2004.”
“Once, reopening is held to be bad in law, all additions made thereto would stand deleted. No infirmity is pointed in the order of the learned CIT(A). We confirm the same and dismiss the appeal of the revenue.”
4. In arriving at aforesaid conclusion, the Tribunal placed reliance on the Apex decision in CIT v/s Kelvinator of India Ltd. (320 ITR 561), a decision of this Court dated 08/03/2011 in United Phosporous Ltd. v/s additional CIT being Special Civil Application No. 3352 of 2001 and several other decisions, wherein the courts have enunciated the principles regarding exercise of powers under section 147 of the Act for reopening the concluded assessment.
5. From the facts on recored and on consideration of the impugned order, it clearly appeared that the issue of deduction under section 80-IA was duly considered by the assessing officer and he had applied his mind on the facts concerning the said issued which were before him on record at that time. The deduction was disallowed on the ground that the receipts were about the job work, and hence they were ineligible for the said deduction. The Assessing Officer could not have assumed the jurisdiction to reopen the concluded assessment on the same issue and on the very materials which were before him at the time he undertook the original assessment. Thus, the action of reopening was based only on a mere change of opinion, which was impermissible in law.
6. In the facts and circumstances, the findings and conclusion recorded by the Tribunal are proper and legal. The facts involved in the case are properly appreciated and the principles of law are correctly applied. Neither of the three question proposed by the appellant raise any substantial question of law required to be considered by this Court.
7. The appeal is accordingly dismissed.
[V.M.SAHAI, J.] [N.V.ANJARIA, J.] cmjoshi