M/s. Ashoka Buildcon Ltd., Nashik V. Asst. CIT, Circle-2, Nashik

ITA 1040/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1028 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Depreciation; Rectification of order; Principle of natural justice; Tangible material; Difference of opinion; Scheme of amalgamation; Assessment record; Revised return; Reason to believe; Unabsorbed depreciation; Change of opinion; Reassessment proceedings
• Section: 143(3); 115JB; 147; 148; 263; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E , , !'!! # , $ % BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM / ITA NO. 1040/PN/2013 $& ' !(' / ASSESSMENT YEAR : 2004-05 M/S. ASHOKA BUILDCON LTD., ASHOKA HOUSE, ASHOKA MARG, WADALA, NASHIK-422011 PAN : AABCA9292J ....... / APPELLANT )& / V/S. ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE 2, NASHIK / RESPONDENT / ITA NO. 1255/PN/2013 $& ' !(' / ASSESSMENT YEAR : 2004-05 ASSTT. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 1, NASHIK ....... / APPELLANT )& / V/S. M/S. ASHOKA BUILDCON LTD., ASHOKA HOUSE, ASHOKA MARG, WADALA, NASHIK-422011 PAN : AABCA9292J / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK REVENUE BY : SHRI RAJESH DAMOR / DATE OF HEARING : 07-07-2015 / DATE OF PRONOUNCEMENT : 06-10-2015 2 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 * / ORDER PER VIKAS AWASTHY, JM : THESE CROSS APPEALS HAVE BEEN FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS) -II, NASHIK DATED 30-03-2013 FOR THE ASSESSMENT YEAR 2004-05. TH E ASSESSEE IN ITS APPEAL HAS ASSAILED THE ORDERS OF COMMISSIONER OF INCOM E TAX (APPEALS) IN UPHOLDING THE REASSESSMENT PROCEEDINGS U/S. 147 OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE AC T). THE ASSESSEE HAS ALSO ASSAILED THE ACTION OF COMMISSIONER OF I NCOME TAX (APPEALS) IN ENHANCING THE INCOME ASSESSED BY THE ASSESSIN G OFFICER, BY WITHDRAWING THE DEDUCTION ALLOWED U/S. 80IA(4) WITHOUT ISS UING SHOW CAUSE NOTICE. THE ASSESSEE HAS ALSO RAISED ADDITION AL GROUND OF APPEAL CHALLENGING THE ACTION OF COMMISSIONER OF INCOME TAX (APPEALS) IN NOT ALLOWING THE BENEFIT OF SET OFF OF BROUGHT FORWARD BUS INESS LOSSES AND UNABSORBED DEPRECIATION OF THE AMALGAMATING COMPANIES AMOUNTING TO RS.12,42,43,556/- IN THE HANDS OF THE ASSESSEE COMPAN Y. THE REVENUE IN ITS APPEAL HAS RAISED A SOLITARY GROUND CHALLENGING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS ) IN DELETING THE ADDITION MADE ON ACCOUNT OF EMPLOYEES CONTR IBUTION TO PF AFTER DUE DATE, IN CONTRAVENTION OF THE PROVISIONS OF SECTIO N 36(I)(VA) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF CONST RUCTION, DEVELOPMENT, OPERATION AND MAINTENANCE OF INFRASTRUCTURE FA CILITIES. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE IMPUGNED A SSESSMENT YEAR ON 01-11-2004 DECLARING TOTAL INCOME OF RS.2,81,67,780 /-. THE 3 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY. ACCORD INGLY, NOTICE U/S. 143(2) WAS ISSUED TO THE ASSESSEE ON 02-08-2005. THE HON'BLE BOMBAY HIGH COURT VIDE ORDER DATED 03-12-2004 APPROVED THE S CHEME OF AMALGAMATION IN THE CASE OF ASSESSEE, WHEREBY M/S. ASHOK A INFO PVT. LTD., ASHOKA INFRA PVT. LTD., ASHOKA VASTU PVT. LTD., ASHOKA VASTUSHILP PVT. LTD., ASHOKA SHILPVIKAS PVT. LTD. AND ASHOKA CONSTRUCT ION ENGINEERS PVT. LTD. WERE AMALGAMATED WITH THE ASSESSEE COMPANY W.E.F. 01-04-2003. THE ASSESSEE FILED REVISED RETURN OF INCOME ON 30-10-2005 DECLARING TOTAL INCOME AS NIL. DURING THE SCRUT INY ASSESSMENT PROCEEDINGS VARIOUS ISSUES WERE RAISED INCLUDIN G ISSUE ARISING FROM THE AMALGAMATION OF VARIOUS COMPANIES WITH THE ASSESSEE COMPANY. THE ASSESSING OFFICER COMPUTED THE TAX LIABILITY O F THE ASSESSEE UNDER MAT PROVISION I.E. U/S. 115JB AS RS.70,15,438/-. 2.1 THEREAFTER THE ASSESSING OFFICER ISSUED NOTICE U/S. 148 ON 06-03-2007 ON THE GROUND THAT THE ASSESSEE COMPANY AND THE AMALGAMATING COMPANIES ARE NOT INDUSTRIAL UNDERTAKING WI THIN THE MEANING OF SECTION 72A OF THE ACT. THEREFORE, THE ASSESS EE IS NOT ELIGIBLE TO CLAIM CARRY FORWARD AND SET OFF OF ACCUMULATED LOS SES AND UNABSORBED DEPRECIATION ALLOWANCE OF THE AMALGAMATING COMP ANIES UNDER THE PROVISIONS OF SECTION 72A OF THE ACT. IT WAS STATED THAT THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT THE ASSESSM ENT HAS BEEN MADE BY ALLOWING EXCESSIVE LOSS AND DEPRECIATION ALLOWANCE U NDER THE ACT. THE ASSESSEE FILED OBJECTIONS AGAINST THE REASSESSM ENT PROCEEDINGS. HOWEVER, THE SAME WERE REJECTED BY THE A SSESSING OFFICER VIDE ORDER DATED 23-04-2007. IN RE-ASSESSMENT PROCEE DINGS, THE ASSESSING OFFICER HELD THAT ALL THE AMALGAMATING COMPANIES AR E NOT INDUSTRIAL UNDERTAKING WITHIN THE MEANING OF SECTION 72A OF T HE ACT. 4 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 THEREFORE, THE ASSESSEE CANNOT CLAIM THE BENEFIT OF SET OFF OF BUSINESS LOSSES AND UNABSORBED DEPRECIATION ALLOWANCES OF THE AMALG AMATING COMPANIES. THE ASSESSING OFFICER VIDE ORDER DATED 27-12-2 007 PASSED U/S. 143(3) R.W.S. 147 ASSESSED THE INCOME OF THE ASSESSEE AT RS.12,42,43,556/- BY DISALLOWING THE BROUGHT FORWARD LOSSES A ND UNABSORBED DEPRECIATION OF AMALGAMATING COMPANIES. THE A SSESSING OFFICER FURTHER MADE DISALLOWANCE ON DELAYED PAYMENTS OF EMP LOYEES SHARE OF CONTRIBUTION TOWARDS PF AND ESIC. AGGRIEVED BY THE ASSESSMENT ORDER DATED 27-12-2007, T HE ASSESSEE PREFERRED AN APPEAL BEFORE THE COMMISSIONER OF I NCOME TAX (APPEALS) CHALLENGING THE REASSESSMENT PROCEEDINGS, AS WELL A S, ADDITIONS MADE ON MERITS. THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER REJECTED THE CONTENTIONS OF THE ASS ESSEE IN RESPECT OF REASSESSMENT PROCEEDINGS, AS WELL AS ON MERITS. HOWEV ER, THE COMMISSIONER OF INCOME TAX (APPEALS) GRANTED RELIEF ONLY IN R ESPECT OF DISALLOWANCE OF RS.8,68,974/- ON ACCOUNT OF DELAYED PAYMENT S OF EMPLOYEE CONTRIBUTIONS TO PF AND ESIC. 3. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED THAT THE ASSESSEE IS ENGAGED IN THE DEVELOPMENT AND CO NSTRUCTION OF INFRASTRUCTURE FACILITIES AND IS OPERATING UNDER BOT SCHEME. DURING THE PERIOD RELEVANT TO THE ASSESSMENT PERIOD UNDER CO NSIDERATION, SIX COMPANIES WERE AMALGAMATED IN THE ASSESSEE COMPANY. TH E ASSESSEE CLAIMED SET OFF AND CARRY FORWARD OF BROUGHT FORWARD BUSI NESS LOSSES AND UNABSORBED DEPRECIATION OF THE AMALGAMATING COMPANIES BY FILING REVISED RETURN OF INCOME. THE ASSESSING OFFICER THOROUGHL Y EXAMINED THE CLAIM OF THE ASSESSEE IN SCRUTINY ASSESSMENT PROCEED INGS AND ALLOWED THE SAME. THE ASSESSING OFFICER, THEREAFTER, INVOKED THE 5 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 PROVISIONS OF SECTION 147 OF THE ACT. THOUGH REASSESSMENT IS WITHIN THE PERIOD OF 4 YEARS, BUT THE REASSESSMENT PROCEEDINGS ARE INITIATED MERELY ON THE BASIS OF CHANGE OF OPINION. NO FRESH TANGIBLE MATE RIAL WAS AVAILABLE WITH THE ASSESSING OFFICER SO AS TO INVOKE THE PRO VISIONS OF SECTION 147 OF THE ACT. THERE IS NO ALLEGATION BY THE ASS ESSING OFFICER THAT THE ASSESSEE HAS FAILED TO MAKE TRUE AND FULL DISCLOSU RE. A PERUSAL OF REASONS FOR RE-OPENING WHICH ARE AT PAGES 205 AND 20 6 OF THE PAPER BOOK WOULD MAKE IT AMPLY CLEAR THAT REASSESSMENT PROCE EDINGS HAVE BEEN INITIATED ON THE BASIS OF MATERIAL ALREADY AVAILABLE ON R ECORD. THE ASSESSEE HAD FILED REVISED RETURN OF INCOME ON 30-10-2005 TO GIVE EFFECT TO THE ORDER OF HON'BLE BOMBAY HIGH COURT SANCTIONING TH E SCHEME OF AMALGAMATION OF M/S. ASHOKA INFO PVT. LTD., ASHOKA INFRA PV T. LTD., ASHOKA VASTU PVT. LTD., ASHOKA VASTUSHILP PVT. LTD., ASHOKA SHILPVIKAS PVT. LTD. AND ASHOKA CONSTRUCTION ENGINEERS PVT. LTD. WITH THE ASSESSEE COMPANY. DURING THE SCRUTINY ASSESSMENT PRO CEEDINGS, THE ASSESSEE HAD PROVIDED ALL THE MATERIAL DOCUMENTS TO THE ASSESSING OFFICER. THE AUDITOR IN HIS REPORT HAD CATEGORICALLY STATED ABOUT THE SCHEME OF MERGER APPROVED BY THE HON'BLE HIGH COURT OF BOMBAY AND THE FACT THAT THE AUDITED FINANCIAL STATEMENTS WERE ADJUS TED IN ACCORDANCE WITH THE APPROVED SCHEME OF MERGER. DURING THE ASSESSMENT PROCEEDINGS, THE QUESTION OF REVALUATION OF ASS ETS ON AMALGAMATION WAS RAISED BY THE ASSESSING OFFICER WHICH WAS DULY ANSWERED. HENCE, THE REASSESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER ARE MERELY ON THE BASIS OF CHANGE OF O PINION. IT IS A WELL SETTLED LAW, THAT THE ASSESSING OFFICER CANNOT INITIATE RE ASSESSMENT PROCEEDINGS TO REVIEW HIS OWN ORDER OR ON THE BASIS OF CHANGE OF OPINION. THE ASSESSING OFFICER HAS APPLIED HIS MIND IN SCRUT INY ASSESSMENT PROCEEDINGS AND HAS THEREAFTER PASSED THE ASSESSMENT 6 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 ORDER. THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN UPHOLDING THE REASSESSMENT PROCEEDINGS AGAINST THE WELL S ETTLED PRINCIPLES LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT AND THE HON'BLE SUPREME COURT OF INDIA. IN SUPPORT OF HIS SUBMISS IONS, THE LD. AR PLACED RELIANCE ON THE FOLLOWING CASE LAWS: I. CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 (SC); II. ASIAN PAINTS LTD. VS. DCIT, 308ITR 195 (BOM); III. IDEA CELLULAR LTD. VS. DCIT, 301 ITR 407 (BOM); IV. CIT VS. AMITABH BACHCHAN, 349 ITR 76 (BOM); V. HINDUSTAN UNILEVER LTD. VS. DCIT, 325 ITR 102 (BOM); VI. CIT VS. EICHER LTD., 344 ITR 37 (DEL)(HC); AND VII. CIT VS. AMRIT FEEDS LTD. 344 ITR 187 (CAL). 3.1 THE LD. AR FURTHER POINTED OUT THAT THE COMMISSIONER O F INCOME TAX (APPEALS) WHILE UPHOLDING THE REASSESSMENT PROCEEDING H AS PLACED RELIANCE ON THE DECISION OF HON'BLE BOMBAY HIGH COURT IN T HE CASE OF INDIAN HUME PIPE CO. LTD. VS. ACIT REPORTED AS 348 ITR 4 39 (BOM), THE HON'BLE SUPREME COURT OF INDIA HAS REVERSED THE FINDINGS OF HON'BLE BOMBAY HIGH COURT IN THE SAID CASE. THE LD. AR FURTHER SU BMITTED THAT THE COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN WITHDRAWING TH E DEDUCTION ALLOWED U/S. 80IA(4) THEREBY ENHANCING THE ASSES SED INCOME WITHOUT ISSUING SHOW CAUSE NOTICE. IN THE REVISED RETURN OF INCOME, THE ASSESSEE HAD CLAIMED DEDUCTION 80IA OF THE ACT. THE AS SESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS WRONGLY COMPUTED TH E AMOUNT OF DEDUCTION. THE ASSESSEE RAISED THIS GROUND BEFORE THE C OMMISSIONER OF INCOME TAX (APPEALS) IN APPEAL. THE COMMISSIONER OF INCOME TAX (APPEALS) WITHOUT ISSUING SHOW CAUSE NOTICE WITHDRAWS THE D EDUCTION CLAIMED U/S. 80IA BY THE ASSESSEE. THE COMMISSIONER OF IN COME TAX 7 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 (APPEALS) HAS VIOLATED THE PRINCIPLES OF NATURAL JUSTICE. IT IS A WELL SETTLED LAW THAT BEFORE WITHDRAWING ANY DEDUCTION THAT HA S BEEN ALLOWED BY THE ASSESSING OFFICER, THE COMMISSIONER OF INCOME TAX (APPEALS) IS DUTY BOUND TO ISSUE SHOW CAUSE NOTICE. 3.2 THE LD. AR RAISED AN ADDITIONAL GROUND THAT THE COMMISS IONER OF INCOME TAX (APPEALS) HAS ERRED IN NOT ALLOWING THE BENEFIT OF SET OFF AND CARRY FORWARD OF BROUGHT FORWARD BUSINESS LOSSES AND UNA BSORBED DEPRECIATION OF THE AMALGAMATING COMPANIES IN THE HANDS OF THE ASSESSEE COMPANY. THE LD. AR FURTHER SUBMITTED THAT WITH OUT PREJUDICE TO THE GROUNDS RAISED IN THE APPEAL, IF THE SET OFF AND CARRY FORWARD BUSINESS LOSSES AND UNABSORBED DEPRECIATION OF TH E AMALGAMATING COMPANIES IS NOT ALLOWED TO THE ASSESSEE THE N THE CORRECT WDV OF THE BLOCK OF ASSETS IN THE HANDS OF THE A SSESSEE SHOULD BE ALLOWED TO BE CARRY FORWARD TO THE NEXT YEAR. THE LD . AR SUBMITTED THAT ALTHOUGH THIS GROUND HAS BEEN RAISED FOR THE FIRST T IME BEFORE THE TRIBUNAL, IT IS A LEGAL GROUND AND CAN BE RAISED AT ANY S TAGE. TO SUPPORT HIS SUBMISSIONS, THE LD. AR PLACED RELIANCE ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. PRU THVI BROKERS AND SHARES PVT. LTD. REPORTED AS 349 ITR 336 (BOM). 4. SHRI RAJESH DAMOR REPRESENTING THE DEPARTMENT VEHE MENTLY SUPPORTED THE ORDERS OF COMMISSIONER OF INCOME TAX (APPE ALS) SUBMITTED THAT THE ASSESSEE HAS NOT MADE FULL AND TRUE DISCLOSURE DURING THE SCRUTINY ASSESSMENT PROCEEDINGS. THE ASSESS EE HAS DELIBERATELY FURNISHED THE INFORMATION SOUGHT BY THE ASSE SSING OFFICER IN A VAGUE AND SKETCHY MANNER. THIS IS EVIDENT FROM THE TABULAR REPLY GIVEN BY THE ASSESSEE DURING THE ASSESSMENT PROCEEDING S. THE LD. DR 8 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 REFERRED TO PAGE 21 OF THE ORDER OF THE COMMISSIONER OF I NCOME TAX (APPEALS) TO SHOW THAT THE REPLY GIVEN BY THE ASSESSEE IS INDISTINCT. THE LD. DR POINTED OUT THAT IN THE REPLY GIVEN BY THE ASSESS EE, IN SOME OF THE COLUMNS, THE ASSESSEE HAS MENTIONED NO COMMENTS INSTEAD OF FURNISHING CORRECT INFORMATION. THE LD. DR FURTHER SUBMITTED THAT THE FULL AND TRUE DISCLOSURE HAS BEEN EXPLAINED BY THE HON'BLE HIGH COURT IN THE CASE OF ROSY BLUE (INDIA) LTD. VS. DCIT REPORTED A S 47 TAXMAN 332. THE LD. DR SUBMITTED THAT THE ASSESSEE NEVER MADE THE DISCLOSURE VOLUNTARILY, WHATEVER INFORMATION WAS MADE AVAILABLE THAT WA S ALSO IN A PIECEMEAL. THE LD. DR IN SUPPORT OF HIS SUBMISSIONS PLACED RE LIANCE ON THE FOLLOWING CASE LAWS: I. CIT VS. USHA INTERNATIONAL LTD., 348 ITR 485 (DEL)(FB); II. ACIT VS. APPOLLO HOSPITALS ENTERPRISES LTD., 300 ITR 167 (MADRAS); III. EXPORT CREDIT GUARANTEE CORPORATION OF INDIA LTD. VS. AD DL. CIT, 350 ITR 651 (BOM); IV. HONDA SIEL POWER PRODUCTS LTD., 340 ITR 53. 4.1 THE LD. DR SUBMITTED THAT THE ASSESSING OFFICER WAS JUS TIFIED IN INVOKING THE PROVISIONS OF SECTION 147 R.W.S. 148 OF THE ACT . THE ISSUE RELATING TO ADMISSIBILITY OF ASSESSEE IN CLAIMING SET OFF OF BROUG HT FORWARD LOSSES AND UNABSORBED DEPRECIATION ALLOWANCES OF T HE AMALGAMATING COMPANIES WAS NEVER RAISED DURING THE SCRUT INY ASSESSMENT PROCEEDINGS. THE LD. DR FURTHER CONTENDED TH AT AMALGAMATING COMPANIES OF THE ASSESSEE ARE NOT INDUSTRIAL UNDERTAKING AS DEFINE U/S. 72A OF THE ACT. HENCE, THE A SSESSEE HAS WRONGLY CLAIMED SET OFF OF UNABSORBED BUSINESS LOSS AND DEP RECIATION IN RESPECT OF AMALGAMATING COMPANIES. 9 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 4.2 AS FAR AS THE APPEAL OF THE DEPARTMENT IS CONCERNED , THE LD. DR SUBMITTED THAT THE ASSESSEE HAS FAILED TO DEPOSIT EMPLOYE ES SHARE OF CONTRIBUTION TOWARDS PF AND ESIC WITHIN THE STIPULATED TIM E AS PRESCRIBED UNDER THE RESPECTIVE LAWS. THEREFORE, THE ASS ESSEE IS NOT ELIGIBLE TO CLAIM THE AMOUNT DEPOSITED AFTER THE DUE DATE. 5. THE LD. AR OF THE ASSESSEE WHILE REBUTTING THE CONTEN TIONS OF THE LD. DR SUBMITTED THAT, IN THE RETURN OF INCOME THE ASSESSE E HAD STATED ABOUT THE AMALGAMATION. DURING THE COURSE OF SCRUTINY AS SESSMENT PROCEEDINGS, THE ASSESSEE HAD GIVEN THE DETAILS OF THE NA TURE OF BUSINESS CARRIED ON BY THE AMALGAMATING COMPANIES. THE ASSESSEE H AD NOT ONLY GIVEN PRIMARY INFORMATION BUT THE DETAILED INFORMAT ION DURING THE SCRUTINY ASSESSMENT PROCEEDINGS. THE REASSESSMENT PROCEEDINGS HAVE BEEN INITIATED ONLY ON THE CHANGE OF OPINION AND THA T TO ON THE BASIS OF INFORMATION WHICH IS ALREADY ON RECORD. THE ALLEGATI ON THAT THE ASSESSEE HAS FAILED TO FURNISH COMPLETE INFORMATION OR HAS P ASSED THE INFORMATION IN PIECEMEAL IS WITHOUT ANY BASE. AS REGARDS TH E CASE LAWS RELIED UPON BY THE LD. DR, THE LD. AR SUBMITTED THAT THE F ACTS IN THE CASE OF ACIT VS. APPOLLO HOSPITALS ENTERPRISES LTD. (SUPRA) ARE ENTIRELY DISTINGUISHABLE. NO FRESH TANGIBLE MATERIAL WAS AVAILABLE WITH T HE ASSESSING OFFICER TO INITIATE REASSESSMENT PROCEEDINGS IN TH E PRESENT CASE. THE LD. AR CONTENDED THAT EVEN THE JUDGMENTS R ENDERED IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. (SUPRA), CIT VS. US HA INTERNATIONAL LTD. (SUPRA) AND EXPORT CREDIT GUARANTEE CO RPORATION OF INDIA LTD. VS. ADDL. CIT (SUPRA) THE FACTS ARE DISTINGUISHABLE AND THUS THE SAID JUDGMENTS ARE NOT APPLICABLE IN THE PRESENT CASE. 10 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 5.1 WITH REGARD TO THE ISSUE RAISED BY THE DEPARTMENT IN ITS APPEAL, THE LD. AR SUBMITTED THAT ADMITTEDLY THERE WAS DELAY IN D EPOSIT OF EMPLOYEES SHARE OF CONTRIBUTION IN THE PF AND ESIC, BUT T HE AMOUNT UNDER THE RESPECTIVE ENACTMENTS WAS DEPOSITED BEFORE T HE FILING OF RETURN UNDER THE PROVISIONS OF THE INCOME TAX ACT. TH US, THE AMOUNT DEPOSITED IS ALLOWABLE IN VIEW OF THE JUDGMENT OF THE HON'BL E BOMBAY HIGH COURT IN THE CASE OF CIT VS. GHATGE PATIL TRANSPORT LTD. REPORTED AS 368 ITR 749 (BOM). THE COMMISSIONER OF INCOME TAX (APP EALS) HAS RIGHTLY ALLOWED THE CLAIM OF THE ASSESSEE IN RESPECT OF PF AND ESIC. 6. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESEN TATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. WE HAVE ALSO CONSIDERED THE DECISIONS ON WHICH THE RIVAL SIDES HAVE PLACED RELIANCE IN SUPPORT OF THEIR RESPECTIVE CONTENTIONS. THE ASSESSEE IN ITS APPEAL HAS PRIMARILY ASSAILED THE REASSESSMENT PROC EEDINGS INITIATED BY THE ASSESSING OFFICER ON THE GROUND OF CHANGE OF OPINION. THE ASSESSEE HAS FILED THE ORIGINAL RETURN OF INCOME ON 01 -11-2004 DECLARING TOTAL INCOME OF RS.2,81,67,780/-. THEREAFTER, THE HO N'BLE BOMBAY HIGH COURT VIDE JUDGMENT DATED 03-12-2004 SANC TIONED THE SCHEME OF AMALGAMATION, WHEREBY M/S. ASHOKA INFO PVT. LTD., ASHOKA INFRA PVT. LTD., ASHOKA VASTU PVT. LTD., ASHOKA VASTUSHILP P VT. LTD., ASHOKA SHILPVIKAS PVT. LTD. AND ASHOKA CONSTRUCTION ENGINE ERS PVT. LTD. WERE AMALGAMATED WITH THE ASSESSEE COMPANY W.E.F. 01- 04-2003. TO GIVE EFFECT TO THIS MERGER AND AMALGAMATION SANCTIONED BY THE HON'BLE BOMBAY HIGH COURT, THE ASSESSEE FILED REVISED RETU RN OF INCOME ON 30-10-2005 DECLARING NIL INCOME. IN THE RETURN OF INCO ME, THE ASSESSEE HAD CLAIMED SET OFF OF BROUGHT FORWARD BUSINESS LO SSES AND UNABSORBED DEPRECIATION OF EARLIER YEARS IN RESPECT OF AMA LGAMATING 11 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 COMPANIES. IN SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSE SSING OFFICER AFTER CONSIDERING THE FACT OF AMALGAMATION RAISED CERTAIN EN QUIRIES AND THEREAFTER FRAMED ASSESSMENT ORDER. SINCE, THE ASSESSM ENT WAS MADE UNDER THE PROVISIONS OF SECTION 143(3) THE ENTIRE SET OF D OCUMENTS, BOOKS OF ACCOUNT, ETC. WERE AVAILABLE BEFORE THE ASSESSING OFFICER FOR EXAMINATION. IT IS PRESUMED AND EXPECTED THAT BEFORE PA SSING ORDER, THE ASSESSING OFFICER HAS APPLIED HIS MIND ON ALL THE DEDUCTIO NS AND EXPENSES CLAIMED BY THE ASSESSEE IN ITS RETURN OF INCOME. 7. THE ASSESSING OFFICER ON 06-03-2007 ISSUED NOTICE U/S . 148 TO THE ASSESSEE. THE REASONS FOR REOPENING SHOW THAT TH E PROVISIONS OF SECTION 147 R.W.S. 148 HAS BEEN INVOKED ON THE BASIS OF M ATERIAL ALREADY AVAILABLE ON RECORD. THE RELEVANT EXTRACT OF THE REASONS FOR REOPENING COMMUNICATED TO THE ASSESSEE READS AS UNDER: REASONS FOR RE-OPENING: AS PER TERMS OF SCHEME OF AMALGAMATION (MERGER) SAN CTIONED BY ORDER DT. 03 RD DECEMBER, 2004 OF HON. HIGH COURT OF MUMBAI FOLLOW ING COMPANIES (MERGED COMPANIES) HAS BEEN AMALGAMATED W ITH THE ASHOKA BUILDCON LTD. W.E.F. 01/04/2003 (A) ASHOKA VASTU PRIVATE LTD. (B) ASHOKA VASTUSHILP PVT. LTD. (C) ASHOKA SHILPVIKAS PVT. LTD. (D) ASHOKA INFO PVT. LTD. (E) ASHOKA INFRA PVT. LTD. (F) ASHOKA CONSTRUCTION ENGINEERS PVT. LTD. SECTION 72A OF THE I.T. ACT, 1961 DEALS WITH CARRY FORWARD AND SET OFF OF ACCUMULATED LOSS AND UNABSORBED DEPRECIATION ALLOWANCE IN AMALGAMATION OR DEMERGER, ETC. SUBSECTION (1) OF SE CTION 72A, IN CASE OF AMALGAMATION OF A COMPANY OWNING AN INDUSTRIAL UNDE RTAKING WITH ANOTHER COMPANY, ALLOWS CARRY FORWARD AND SET OFF O F ACCUMULATED LOSS AND UNABSORBED DEPRECIATION ALLOWANCE PROVIDED THE AMALGAMATION SATISFIES THE CONDITIONS LAID DOWN IN SUB-SECTION 2 OF SECTION 72A. SECTION 72A(1) READS AS UNDER:- WHERE THERE HAS BEEN AN AMALGAMATION OF A COMPANY OWNING AN INDUSTRIAL UNDERTAKING OR A SHIP OR A HOTEL WITH AN OTHER COMPANY OR AN AMALGAMATION OF A BANKING COMPANY REFERRED TO IN CL AUSE (C) OF SECTION 5 OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) WI TH A SPECIFIED BANK, THEN, NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTH ER PROVISION OF THIS ACT, THE ACCUMULATED LOSS AND THE UNABSORBED DEPREC IATION OF THE AMALGAMATING COMPANY SHALL BE DEEMED TO BE THE LOSS OR, AS THE CASE MAY BE, ALLOWANCE FOR DEPRECIATION OF THE AMALGAMAT ED COMPANY FOR THE 12 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 PREVIOUS YEAR IN WHICH THE AMALGAMATION WAS EFFECTE D, AND OTHER PROVISIONS OF THIS ACT RELATING TO SET OFF AND CARR Y FORWARD OF LOSS AND ALLOWANCE FOR DEPRECIATION SHALL APPLY ACCORDINGLY. ON PERUSAL OF MATERIAL AVAILABLE ON RECORD WITH RES PECT TO THE MERGER AND ACQUISITION THE A.O. HAS REASON TO BELIE VE THAT NONE OF THE ABOVE SIX COMPANIES SATISFIES THE DEFINITION OF IN DUSTRIAL UNDERTAKING AS GIVEN IN SUB-SECTION 7(AA) OF SECTION 72A. THE DEFINITION OF 'INDUSTRIAL UNDERTAKING' AS GIVEN IN SUB-SECTION 7(AA) OF SECTION 72A READS AS UNDER:- 'INDUSTRIAL UNDERTAKING ' MEANS ANY UNDERTAKING WHI CH IS ENGAGED IN (I) THE MANUFACTURE OR PROCESSING OF-GOODS; OR (II) THE MANUFACTURE OF COMPUTER SOFTWARE; OR (III) THE BUSINESS OF GENERATION OR DISTRIBUTION OF ELECT RICITY OR ANY OTHER FORM OF POWER; OR (IV) THE BUSINESS OF PROVIDING TELECOMMUNICATION SERVICE S, WHETHER BASIC OR CELLULAR, INCLUDING RADIO PAGING, DO MESTIC SATELLITE SERVICE, NETWORK OF TRUNKING BROADBAND NETWORK AND INTERNET SERVICES; OR] (V) MINING; OR (VI) THE CONSTRUCTION OF SHIPS, AIRCRAFTS OR RAIL SYSTEM S;]' IN VIEW OF THE ABOVE OBSERVATIONS THE A.O. HAS REAS ON TO BELIEVE THAT THE ASSESSMENT HAS BEEN MADE BUT EXCESSIVE LOS S AND DEPRECIATION ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED AND ALLO WED AND ALSO THE INCOME OF THE ASSESSEE HAS BEEN MADE THE SUBJECT OF EXCESSIVE RELIEF UNDER THIS ACT. A.O. IS OF THE OPINION THAT AS PER EXPLANATION 2 TO SECTION 147 OF THE I.T. ACT, 1961 IT IS TO BE DEEMED TO BE A CASE WHEREIN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, NAMELY :- BECAUSE AS AN ASSESSMENT HAS BEEN MADE, BUT (I) SUCH INCOME HAS BEEN MADE THE SUBJECT CF EXCESSIVE RELIEF UNDER THIS ACT. (II) EXCESSIVE TOSS OR DEPRECIATION ALLOWANCE OR ANY OTH ER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED. AS THE ASSESSEE HAS GIVEN SET OFF TO BROUGHT FORWAR D LOSSES AND DEPRECIATION, HE HAS PAID THE TAXES U/S 115 JB, THE MINIMUM ALTERNATE TAX. ASSESSEE IS SHOWING HIS BOOK PROFIT AMOUNTING TO RS.91257740/- ON WHICH TAX LIABILITY COMES TO RS.7015438/-. AS A.O, HAS REASON TO BELIEVE THAT THE ASSESSEE IS NOT ENTITLED TO GIVE SET OFF T O BROUGHT FORWARD TAX AND DEPRECIATION, PROVISION OF MAT AS PER SECTION 115JB WILL NOT APPLY TO ASSESSEE. AFTER DISALLOWING THE SET OFF OF BROUGHT FORWARD LOSSES AND DEPRECIATION, ASSESSEE'S TAX LIABILITY COMES TO RS. 2,88,38,334/-. IN VIEW OF THE ABOVE MENTIONED REASONS THE ASSESSME NT FOR A, Y. 2004-05 IS REOPENED AND NOTICE U/S 147 IS ISSUED TO THE ASSESSES ON 01/03/2007. SD/- (V.R. PATIL) ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-2, NASHIK 8. THUS, IT IS EVIDENT THAT THAT THE REASSESSMENT PROCE EDINGS WERE NOT INITIATED ON THE BASIS OF FRESH TANGIBLE MATERIAL BUT ON THE BASIS OF 13 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 MATERIAL AVAILABLE ON RECORD IN THE HANDS OF ASSESSING OFFICER . FURTHER, A PERUSAL OF THE REASONS RECORDED SHOW THAT NOWHERE IT HAS BEEN ALLEGED THAT THE ASSESSEE HAS NOT MADE FULL DISCLOSURE OR HAS CONCEALED INFORMATION FROM THE ASSESSING OFFICER. THUS, THE CONTENTIONS OF THE LD. DR THAT THE ASSESSEE HAS FAILED TO GIVE COMPLETE INFORMATIO N OR HAS NOT MADE FULL AND TRUE DISCLOSURE ARE NOT SUSTAINABLE AT ALL. SIN CE, THE ORIGINAL ASSESSMENT WAS FRAMED UNDER THE PROVISIONS OF SEC TION 143(3), IT IS PRESUMED THAT THE ASSESSING OFFICER HAS APPLIED HIS MI ND ON EACH AND EVERY ASPECT OF SOURCE OF INCOME, EXPENDITURE AND D EDUCTIONS CLAIMED. THE ASSESSEE HAS PLACED ON RECORD THE REVISED RETURN OF INCOME AT PAGES 87 TO 92 OF THE PAPER BOOK. A PERUSAL OF THE SAME SHOWS THAT THE ASSESSEE HAS SPECIFICALLY STATED IN THE N OTE THAT THE HON'BLE BOMBAY HIGH COURT HAS APPROVED THE SCHEME OF AMALGAMATION W.E.F. 01-04-2003 AND HENCE, THE ACCOUNTS OF THE ASSESSEE AND THE OTHER AMALGAMATING COMPANY ARE CONSOLIDATED AFTER GIVING E FFECT TO THE ORDER OF HON'BLE HIGH COURT. THUS, THE ASSESSING OFFICER HA D ALL THE OPPORTUNITY TO VERIFY THE CLAIM OF DEDUCTION CLAIMED BY THE ASSESSEE ESPECIALLY IN VIEW OF THE FACT THAT THE ASSESSEE HAD CLAIM ED SET OFF OF CARRY FORWARD BUSINESS LOSSES AND UNABSORBED DEPRECIAT ION OF THE AMALGAMATING COMPANIES. SECTION 72A OF THE ACT DEALS WITH THE PROVISIONS RELATING TO CARRY FORWARD AND SET OFF OF ACCUMULA TED LOSSES AND UNABSORBED DEPRECIATION ALLOWANCE IN CASE OF AMALGAMAT ION, DEMERGER ETC. SINCE, THE ASSESSEE HAD CLAIMED SET OFF OF L OSSES AND UNABSORBED DEPRECIATION OF THE AMALGAMATING COMPANIES THE ASSESSING OFFICER WAS DUTY BOUND TO REFER TO THE PROVISIONS OF SECTIO N 72A, WHICH HE HAS FAILED TO DO OR AFTER CONSIDERING THE SAME HAS GRA NTED RELIEF TO THE ASSESSEE. 14 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 9. THE LEGISLATURE IN ITS WISDOM HAS NOT GRANTED POWER TO ASSESSING OFFICER TO REVIEW ITS ORDER. THE PROVISIONS OF INCOME TAX ACT HAS PROVIDED VARIOUS WEAPONS IN THE HANDS OF THE DEPARTMENT TO TACKLE THE SITUATION WHERE THE INCOME HAS ESCAPED ASSESSMENT EITHE R DUE TO NON- DISCLOSURE OR CONCEALMENT OF INCOME ON THE PART OF THE AS SESSEE OR ON ACCOUNT OF ANY MISTAKE OR ERROR COMMITTED BY THE ASSES SING OFFICER. HOWEVER, THE REMEDIES PROVIDE UNDER THE ACT HAVE TO BE USED DILIGENTLY AND APPROPRIATELY DEPENDING UPON THE SITUATION UNDER WH ICH THE INCOME HAS ESCAPED ASSESSMENT. REASSESSMENT PROCEEDIN GS ARE NOT A PANACEA FOR ALL INCOME ESCAPING ASSESSMENTS. THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (SUPRA) HAS HELD: 14. IT IS WELL SETTLED PRINCIPLE OF INTERPRETATION OF STATUTE THAT ENTIRE STATUTE SHOULD BE READ AS A WHOLE AND THE SAME HAS TO BE CONSIDERED THEREAFTER CHAPTER BY CHAPTER AND THEN SECTION BY S ECTION AND ULTIMATELY WORD BY WORD. IT IS NOT IN DISPUTE THAT THE ASSESSI NG OFFICER DOES NOT HAVE ANY JURISDICTION TO REVIEW ITS OWN ORDER. HIS JURISDICTION IS CONFINED ONLY TO RECTIFICATION OF MISTAKE AS CONTAINED IN SE CTION 154 OF THE ACT. THE POWER OF RECTIFICATION OF MISTAKE CONFERRED UPO N THE ITO IS CIRCUMSCRIBED BY THE PROVISIONS OF SECTION 154 OF T HE ACT. THE SAID POWER CAN BE EXERCISED WHEN MISTAKE IS APPARENT. EV EN MISTAKE CANNOT BE RECTIFIED WHERE IT MAY BE A MERE POSSIBLE VIEW O R WHERE THE ISSUES ARE DEBATABLE. EVEN THE INCOME-TAX APPELLATE TRIBUN AL HAS LIMITED JURISDICTION UNDER SECTION 254(2) OF THE ACT. THUS WHEN THE ASSESSING OFFICER OR TRIBUNAL HAS CONSIDERED THE MATTER IN DE TAIL AND THE VIEW TAKEN IS A POSSIBLE VIEW THE ORDER CANNOT BE CHANGE D BY WAY OF EXERCISING THE JURISDICTION OF RECTIFICATION OF MIS TAKE. 15. IT IS A WELL SETTLED PRINCIPLE OF LAW THAT WHAT CANNOT BE DONE DIRECTLY CANNOT BE DONE INDIRECTLY. IF THE ITO DOES NOT POSS ESS THE POWER OF REVIEW, HE CANNOT BE PERMITTED TO ACHIEVE THE SAID OBJECT BY TAKING RECOURSE TO INITIATING A PROCEEDING OF RE-ASSESSMEN T OR BY WAY OF RECTIFICATION OF MISTAKE. 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 . 15 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 10. THE FULL BENCH OF HON'BLE DELHI HIGH COURT HAS FURTHER HELD THAT WHEN A REGULAR ASSESSMENT ORDER IS PASSED IN TERMS OF SECTION 143(3), 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, THE JUDICIAL AND OFFICIAL ACTS HAVE BEE N REGULARLY PERFORMED. IF IT BE HELD THAT AN ORDER WHICH HAS BEEN PA SSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JU RISDICTION UPON THE ASSESSING OFFICER TO REOPEN THE PROCEEDINGS WITH OUT ANYTHING FURTHER, THE SAME WOULD AMOUNT TO GIVE PREMIUM TO AN AUT HORITY EXERCISING QUASI-JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRON G. THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS . KELVINATOR OF INDIA LTD. REPORTED AS 320 ITR 561 HAS AFFIRM ED THE FINDINGS OF HON'BLE DELHI HIGH COURT. 11. THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS . AMRIT FEEDS LTD. (SUPRA) HAS HELD THAT IF THE CONCERNED ASSESSIN G OFFICERS HAD NOT QUESTIONED THE ENTITLEMENT OF THE ASSESSEE TO DEDUCTION, IT WA S THEIR MISTAKE. ALL THE INFORMATION REGARDING THE ALLEGED MANUFACTUR ING PROCESS OF THE ASSESSEE WAS BEFORE THEM. AFTER THE TIM E LIMIT FOR MAKING AN ASSESSMENT OR REASSESSMENT HAD LONG EXPIRED, THE REVENUE COULD NOT TURN ROUND, TAKE RECOURSE TO AN EXTRAORDINAR Y PROVISIONS, WHICH IS SECTION 147 AND ATTEMPT TO REOPEN CONCLUDED AS SESSMENTS. IF SUCH EXERCISE IS PERMITTED THAT WOULD BE QUITE CONTRARY TO THE INTENTION OF THE ACT. IN THAT CASE, THERE WOULD BE NO FINALITY TO AN Y ASSESSMENT AND AT ANY POINT OF TIME AFTER EXPIRY OF TIME, THE ASSESSIN G OFFICER COULD REOPEN ASSESSMENT. THAT WOULD PLAINLY BE AGAINST THE STATUTO RY POLICY. 16 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 12. THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF ASIAN PA INTS LTD. VS. DCIT (SUPRA) SET ASIDE THE REASSESSMENT PROCEEDINGS WHERE THE ASSESSING OFFICER HAD FAILED TO APPLY HIS MIND TO THE RELEVAN T MATERIAL IN MAKING THE ASSESSMENT ORDER AND TOOK RECOURSE TO T HE PROVISIONS OF SECTION 147 TO RECTIFY HIS MISTAKE. THE HON'BLE COURT HE LD THAT THE ASSESSING OFFICER CANNOT TAKE ADVANTAGE OF HIS OWN WRONG AND REOPEN THE ASSESSMENT UNDER THE PROVISIONS OF SECTION 147. TH E LEGISLATURE HAS NOT CONFERRED POWER ON THE ASSESSING OFFICER TO REVIE W ITS OWN ORDER. THEREFORE, THE POWER U/S. 147 CANNOT BE USED TO REVIEW THE ORDER. IN THE SAID CASE DURING THE ASSESSMENT THE ASS ESSES HAD CLAIMED DEDUCTION OF PROVISION FOR ESTIMATED LIABILITY OF ARREAR S OF WAGES PAYABLE TO WORKMEN AT ITS ANKLESHUAR PLANT AND CONTRIBU TION BY WAY OF REIMBURSEMENT OF CAPITAL LOSS INCURRED BY PROVIDENT FUND, GR ATUITY AND SUPERANNUATION FUNDS. A NOTICE-CUM-QUESTIONNAIRE WAS ISSUE D TO THE PETITIONER IN THE COURSE OF ASSESSMENT PROCEEDINGS INVEST IGATING INTO THE AFORESAID ISSUE AND EVENTUALLY THE DEDUCTION WAS ALLOW ED. LATER, NOTICE .UNDER SECTION 148 WAS ISSUED WHICH RELATED TO THE DEDUCTION ALLOWED IN RELATION TO THE SAID TWO ITEMS OF EXPENDITURE. THE ASSESSEE RAISED OBJECTION CONTENDING THAT IT HAD MADE A FULL AND TR UE DISCLOSURE OF THE MATERIAL FACTS IN THE COMPUTATION OF INCOME. THE OBJE CTIONS WERE, HOWEVER, REJECTED. THE HON'BLE COURT HELD THAT IN THE ORDER REJECTING THE OBJECTION FILED BY THE PETITIONER TO THE NOTICE UNDER SECTION 148, T HE ASSESSING OFFICER HAD OBSERVED 'VERIFICATION OF ASSESSMENT RECORD REV EALS THAT THE SAID DETAILS WERE CALLED FOR BUT INADVERTENTLY THE SAME W ERE NOT TAKEN INTO ACCOUNT WHILE FRAMING THE ASSESSMENT AND, THEREFORE, IT CANNOT BE SAID THAT THERE WAS A CHANGE OF OPINION. ACCORDING TO A SSESSING OFFICER THUS, THE RELEVANT MATERIAL WAS AVAILABLE ON RECORD, BUT HE FAILED TO 17 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 APPLY HIS MIND TO THAT MATERIAL IN MAKING THE ASSESSMENT ORDER. THE .ASSESSING OFFICER CANNOT TAKE RECOURSE TO THE PROVISION O F SECTION 147 FOR HIS OWN FAILURE TO APPLY HIS MIND TO THE MATERIAL WHICH, A CCORDING TO HIM. IS RELEVANT AND WHICH WAS AVAILABLE ON RECORD. NOTHING NEW HAD HAPPENED. NO NEW MATERIAL HAD COME ON RECORD, NO NEW INFO RMATION HAD BEEN RECEIVED; IT WAS MERELY A FRESH APPLICATION OF MIND BY THE SAME ASSESSING OFFICER TO THE SAME SET OF FACTS AND THE R EASON THAT HAD BEEN GIVEN WAS THAT THE SAME MATERIAL WHICH WAS AVAILABLE ON RECORD WHILE ASSESSMENT ORDER WAS MADE, WAS INADVERTENTLY EXCL UDED FROM CONSIDERATION. THIS AMOUNTED TO OPENING OF THE ASSESSMENT MERELY BECAUSE THERE WAS CHANGE OF OPINION WHICH WAS IMPERMISSIBLE . THEREFORE, THE REASSESSMENT WAS NOT JUSTIFIED. 13. IN VIEW OF THE FACTS OF THE PRESENT CASE AND CASE LAW S DISCUSSED ABOVE, WE ARE OF THE CONSIDERED OPINION THAT IN THE PRES ENT CASE, THE REASSESSMENT PROCEEDINGS U/S. 147 R.W.S. 148 HAVE BEEN INITIATED BY THE ASSESSING OFFICER MERELY ON THE BASIS OF CHANGE OF OP INION WHICH IS NOT PERMISSIBLE UNDER LAW. AT THE TIME OF SCRUTINY ASSESSM ENT ALL THE INFORMATION WAS AVAILABLE BEFORE THE ASSESSING OFFICER. THE AS SESSING OFFICER HAD AN OPPORTUNITY TO EXAMINE AND RAISE QUERY. A PERUSAL OF THE ASSESSMENT ORDER PASSED U/S. 143(3) SHOWS THAT THE ASSESSING OFFICER WAS WELL AWARE OF THE FACT ABOUT THE AMALGAMATION O F THE COMPANIES WITH THE ASSESSEE COMPANY. THE ASSESSING OFFIC ER HAD RAISED CERTAIN QUERIES ON THE DEPRECIATION CLAIMED BY TH E ASSESSEE ON LICENSE TO COLLECT TOLL IN RESPECT OF AMALGAMATING COMPAN IES. THUS, IT IS EVIDENT THAT THE ASSESSING OFFICER HAD KNOWLEDGE ABOUT THE AMALGAMATION OF THE COMPANIES AS WELL AS ISSUES RELATING THERETO. 18 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 A PERUSAL OF THE REASONS FOR REOPENING FURTHER STRENGTHE N OUR VIEW WHEREIN THE ASSESSING OFFICER HAS CATEGORICALLY STATED , ON PERUSAL OF THE MATERIAL AVAILABLE ON RECORD.. THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT THE AMALGAMATING COMPANIES DOES NOT SATIS FY THE DEFINITION OF INDUSTRIAL UNDERTAKING U/S. 72A. FROM THE DOC UMENTS ON RECORD, IT IS WRIT LARGE THAT THE REASSESSMENT PROCEEDING S HAVE BEEN INITIATED ON THE CHANGE OF OPINION WHICH IS IMPERMISSIBLE UNDER THE ACT. THEREFORE, REOPENING OF ASSESSMENT IS BAD IN LAW AND SUBSEQUENT PROCEEDINGS ARISING THERE FROM ARE NOT SUSTAINABLE, ACCORD INGLY, ARE LIABLE TO BE SET ASIDE. 14. THE SECOND ISSUE RAISED IN THE APPEAL OF THE ASSESSE E IS WITH REGARD TO DISALLOWANCE OF DEDUCTION CLAIMED BY THE ASSESSE E U/S. 80IA(4). SINCE, THE REASSESSMENT PROCEEDINGS U/S. 147 R.W .S. 148 HAVE BEEN SET ASIDE. THIS ISSUE, AS WELL AS, THE ADDITIONAL GROUN D OF APPEAL RAISED BY THE ASSESSEE HAVE BECOME ACADEMIC AND HENCE DOES NOT REQUIRE ADJUDICATION. ITA NO. 1255/PN/2013 15. NOW, WE PROCEED ON TO THE APPEAL OF REVENUE. THE RE VENUE IN ITS APPEAL HAS ASSAILED THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN ALLOWING THE EMPLOYEE SHARE OF CONTRIBUTION TO PF AND ESIC AFTER DUE DATE UNDER THE RESPECTIVE ACTS. IT IS AN UND ISPUTED FACT THAT THE ASSESSEE HAS CONTRIBUTED TOWARDS PF AND ESIC BEFO RE DUE DATE OF FILING RETURN UNDER THE INCOME TAX ACT. IT IS WELL SETTLED LAW THAT THE CONTRIBUTIONS MADE TO SUCH FUNDS BEFORE DUE DATE OF FILING R ETURN ARE ADMISSIBLE AS EXPENDITURE. THE HON'BLE BOMBAY HIGH COURT IN THE C ASE OF CIT VS. GHATGE PATIL TRANSPORT LTD. (SUPRA) AND THE HON 'BLE SUPREME 19 ITA NOS. 1040 & 1255/PN/2013, A.Y. 2004-05 COURT OF INDIA IN THE CASE OF CIT VS. ALOM EXTRUSIONS LTD . REPORTED AS 319 ITR 306 (SC) HAS LAID DOWN THE LAW IN THIS REGARD. WE DO NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE, ACCORDINGLY, THE SAME IS DISMISSED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED AN D THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON TUESDAY, THE 06 TH DAY OF OCTOBER, 2015. SD/- SD/- ( . . / R.K. PANDA) ( ! ' / VIKAS AWASTHY) #' / ACCOUNTANT MEMBER $ % #' / JUDICIAL MEMBER / PUNE; &# / DATED : 06 TH OCTOBER, 2015 RK *+,$-.'/'(- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ' () / THE CIT(A)-II, NASHIK 4. ' / THE CIT(CENTRAL), NAGPUR 5. !*+ %%,- , ,- , . /01 , / DR, ITAT, A BENCH, PUNE. 6. + 2 34 / GUARD FILE. // ! % // TRUE COPY// #5 / BY ORDER, %6 ,1 / PRIVATE SECRETARY, ,- , / ITAT, PUNE