Assistant Commissioner of Income-tax, Pune V. Suma Shilp Ltd.,

ITA 2065/PUN/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1295 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 10-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 27-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S K RASTOGI
• Keywords: Depreciation; Search and seizure; Audit objection; Period of limitation; Question of law; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings; Ignorance of law
• Section: 45(2); 143(3); 115JB; 147; 148; 154; 139

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE ! ' , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM ITA NO.2065/PN/2013 ASSESSMENT YEAR : 2007-08 THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE-6, PUNE. .. APPELLANT VS. SUMA SHILP LIMITED, 93/5A, ERANDAWANE, PUNE 411 004. PAN: AACCS4724N ... RESPONDENT / DEPARTMENT BY : SHRI S. K. RASTOGI, CIT / APPELLANT BY : SHRI NIKHIL PATHAK / DATE OF HEARING : 28.07.2015 / DATE OF PRONOUNCEMENT: 12.08.2015 % / ORDER PER VIKAS AWASTHY, JM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER OF CIT(A)-III, PUNE DATED 17.09.2013 RELATING TO ASSESSMENT YEAR 2 007-08. 2. THE GROUNDS RAISED BY THE REVENUE IN APPEAL ARE AS UNDER :- 1. THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEAL S) IS CONTRARY TO LAW AND TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-III HA S ERRED IN TREATING THE REASSESSMENT AS BAD IN LAW WITHOUT APPRECIATING THAT AS LONG AS INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT & ASSESSING OFFICER HAS REASON TO BELIEVE SO, WHETHER SUO MOTO FOUND BY HIM FROM RECORDS OR WHETHER BROUGHT TO HIS NOTICE BY AUDIT P ARTY OR ANY OTHER AGENCY, AO WILL BE JUSTIFIED IN REASSESSING ASSESSM ENT WITHIN PERIOD OF LIMITATION PROVIDED IN SECTION 147. 2 ITA NO.2065/PN/2013 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-III HA S ERRED IN INCLUDING THE EXPENDITURE INCURRED ON THE CIVIL WOR K IN THE CONSTRUCTION OF THE WINDMILL WHILE GRANTING DEPRECIATION @ 80% ON THE WINDMILL AS THERE WAS NOTHING ON RECORD TO ESTABLISH THAT THE S AID CIVIL WORK COULD ONLY BE USED FOR POWER GENERATION BY THE WINDMILL. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-III HA S ERRED IN GRANTING DEPRECIATION ON CIVIL WORK & ELECTRICAL WORK WITHOUT EXAMINING THE FUNCTIONAL TEST OF THE SAID STRUCTURE & COMPONENTS. FROM THE GROUNDS OF APPEAL ABOVE, WE CAN SEE THAT T HE OBJECTIONS OF THE REVENUE ARE TWO-FOLD. FIRSTLY, THE REVENUE HAS CHA LLENGED THE QUASHING OF REOPENING PROCEEDINGS UNDER SECTION 147 OF THE INCO ME TAX ACT, 1961 (IN SHORT THE ACT) ON LEGAL GROUNDS. SECONDLY, THE DEPARTM ENT HAS ALSO QUESTIONED THE FINDINGS OF THE CIT(A) ON MERITS. 3. SINCE, THE REVENUE HAS QUESTIONED THE INTERFEREN CE OF THE CIT(A) ON USURPATION OF JURISDICTION UNDER SECTION 147 OF THE ACT, WE SHALL DEAL WITH THIS SUBSTANTIVE ISSUE FIRST. 4. THE BRIEF FACTS CONCERNING THE ISSUE ARE : THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF CONSTRUCTION AND DEVELOPMENT OF RESIDENTIAL AND COMMERCIAL PROPERTIES ETC. . FURTHER, DURING THE COURSE OF ASSESSMENT YEAR UND ER CONSIDERATION, THE ASSESSEE COMPANY HAS INTER-ALIA , INSTALLED 12 WINDMILLS IN DISTRICT DHULE, MAHARASHTRA. THE RETURN FILED BY THE ASSESSEE FOR THE IMPUGNED ASSESSMENT YEAR WAS SELECTED FOR SCRUTINY AND ORIGINAL ASSESSMENT O RDER WAS PASSED UNDER SECTION 143(3) OF THE ACT ON 22.12.2009. THE ASSESSEE IN T HE IMPUGNED RETURN HAD CLAIMED ACCELERATED DEPRECIATION OF 80% ON THE ABOV E REFERRED WINDMILLS. THE HIGHER RATE OF DEPRECIATION WAS ALSO CLAIMED ON INC IDENTAL CIVIL CONSTRUCTION WORK AND ELECTRICAL FITTINGS CONNECTED TO THE WINDMILLS. AFTER THE COMPLETION OF THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT, THE ASS ESSING OFFICER FOUND ERROR IN THE ALLOWABILITY OF THE DEPRECIATION CLAIMED. HE F ROWNED UPON THE ALLOWABILITY OF 3 ITA NO.2065/PN/2013 DEPRECIATION AT A HIGHER RATE OF 80% ON CIVIL CONST RUCTION WORK AND ELECTRICAL INSTALLATIONS. THE ASSESSING OFFICER, THEREFORE, I SSUED NOTICE UNDER SECTION 154/155 OF THE ACT DATED 09.12.2011 DIRECTING THE ASSESSEE TO SHOW-CAUSE FOR THE CORRECTION OF THE PURPORTED MISTAKE WHICH IS APPARENT FROM THE RECORD AND SOUGHT TO DISALLOW THE EXCESS DEPRECIATION ALLOWED IN THE ASSESSMENT O N CIVIL CONSTRUCTION WORK AND ELECTRICAL WORK AGGREGATING TO RS.6,47,71,477/-. I N RESPONSE THERETO, THE ASSESSEE FILED REPLY DATED NIL. THE SAME IS PLACED AT PAGE NO.46 & 47 OF THE PAPER BOOK. THE PROCEEDINGS UNDER SECTION 154 OF THE ACT WERE D ROPPED. THEREAFTER, THE ASSESSING OFFICER PROCEEDED TO ISSUE NOTICE UNDER S ECTION 148 OF THE ACT DATED 30.03.2012. 5. THE REASONS RECORDED BY THE ASSESSING OFFICER DA TED 28.03.2012 FOR INVOKING JURISDICTION UNDER SECTION 147 OF THE ACT IS REPRODUCED AS UNDER :- RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 2,15,15,835/- WAS FILED ON 31/10/2007 ASSESSMENT U/S. 143(3) WAS MADE ON 22/12/2009 ON A TOTAL INCOME OF RS.2,27,11,910/-. THE ASSESSEE HAS ALSO S HOWN BOOK PROFIT AS PER PROVISION OF SEC. 115JB OF THE 1. T. ACT 1961 AT RS.24,10,62,730/-. FROM THE ASSESSMENT RECORDS, IT IS GATHERED THAT THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.57,19,05,871/- ON 12 WINDMILLS INSTALLED DURING THE YEAR. DEPRECIATION HAS BEEN CLAIMED @ 80% ON 11 WINDMILLS AND 40% ON ONE WINDMILL AS THE SAME WAS COMMISSIONED AFTER SEPTEMBER, 2006. HOWEVER, THE DETAILED CHART OF VARIOUS EXPENSES SHOW THAT DEPRECIATION AT HIGHER RATE HAS BEEN CLAIMED EVEN ON CIVIL CONSTRUCTION WORK ON WHICH DEPRECIATI ON IS ALLOWABLE @ L0% AND ELECTRICAL ITEMS ON WHICH IT IS ALLOWABLE @ 15%. SUCH EXCESS CLAIM MADE BY THE ASSESSEE IS WORKED OUT AS UNDER: SR. NATURE OF EXPENDITURE AMOUNT IN BEFORE AFTER SEPTEMBER, 2006 NO. RUPEES SEPTEMBER, 2006 1. CIVIL WORKS 4,15,29,120/- 3,80,68,360/- 34,60,7 60/ - 2. A. ELECTRICAL ITEMS 1,74,72,000/- B. INSTALLATION CHARGES 2,02,25,220/- (5,43,19,192/- + 49,38,108/ - = RS.5,92,57,3001-) C. LABOUR RELATED TO 2,15,60,080/ - INSTALLATION 5,92,60,080/- COMPUTATION OF EXPENSES DEPRECIATION IS AS UNDER:- A. CIVIL WORK - EXCESS DEP @ 70% ON RS. 3,80,68,360/ - = RS. 2,66,47,852/- EXCESS DEP @ 35% ON RS. 34,60,760/- = RS. 12,11,266/- 4 ITA NO.2065/PN/2013 B. ELECTRICAL WORK - EXCESS DEP @ 65% ON RS. 5,43,19,192/- = RS. 3,53,07,474/- EXCESS DEP @32.5%ONRS. 49,38,108/- = RS. 16,04,885/- RS. 6,47,71,477/- ACCORDINGLY, THE ASSESSEE HAS CLAIMED EXCESS DEPREC IATION AT RS. 6,47,71,477/ - AS ABOVE WHICH HAS ESCAPED ASSESSMENT. IN VIEW OF THE ABOVE, I HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX TO THE EXTENT OF RS. 6,47,71,477/ - HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF CLAUSE (A) UNDER EXPLANATION (2) TO SECTION 147 OF THE ACT. I SSUE NOTICE UNDER SECTION 148 OF THE I.T. ACT, 1961. 6. AFTER ISSUANCE OF NOTICE UNDER SECTION 148 OF TH E ACT AND PROVIDING THE REASONS FOR DOING SO AS NOTED ABOVE, THE ASSESSMENT ORDER DATED 12.09.2012 WAS FRAMED UNDER SECTION 143(3) R.W.S. 148 OF THE ACT D ISALLOWING THE ALLEGED EXCESS DEPRECIATION CLAIM OF RS.6,47,71,477/- ON CIVIL CON STRUCTION WORK AND ELECTRICAL WORK ETC.. 7. IN APPEAL, THE CIT(A) HELD REOPENING UNDER SECTI ON 147/148 AND CONSEQUENTIAL ASSESSMENT THEREUNDER LEGALLY UNSUSTA INABLE. THE CIT(A) FOUND THAT THE ACTION OF THE ASSESSING OFFICER IS ON THE BASIS OF CHANGE OF OPINION WHICH IS NOT PERMISSIBLE FOR USURPING JURISDICTION UNDER SEC TION 147 OF THE ACT. THE CIT(A) FURTHER OBSERVED THAT THE ENTIRE FACTS CONCERNING T HE CLAIM OF IMPUGNED DEPRECIATION WAS PLACED BEFORE THE ASSESSING OFFICER IN FILING F ORM OF AUDITED ANNUAL ACCOUNTS, TAX AUDIT REPORT, INVOICES AND OTHER DETAILS. AFTE R EXAMINING THE RELEVANT FACTS, THE ASSESSING OFFICER ALLOWED DEPRECIATION @ 80% ON THE ACTUAL COST OF 11 WINDMILLS AND @ 40% ON ONE WINDMILL IN THE ORIGINAL ASSESSMEN T AS CLAIMED BY THE ASSESSEE. THE CIT(A) PLACED RELIANCE ON THE DECISI ON OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA REPORTED AS 256 ITR 1 ( FB) , AFFIRMED BY THE HONBLE SUPREME COURT IN 320 ITR 561 TO HOLD THAT MERE CHANGE OF OPINION ON THE SAME FACT DOES NOT GIVE JURISDICTION TO THE ASSESSING OFFICER TO REOPEN A COMPLETED ASSESSMENT. THE CIT(A) FURTHER OBSERVED THAT AN AUDIT OBJECTION WAS TAKEN ON THE SAME ISSUE AND PURSUANT THERETO THE AS SESSING OFFICER INITIALLY INVOKED PROVISIONS OF SECTION 154 OF THE ACT BY ISS UING NOTICE DATED 09.12.2011 5 ITA NO.2065/PN/2013 PROPOSING TO CORRECT THE MISTAKE, I.E. GRANT OF EXC ESS DEPRECIATION. HOWEVER, NO ACTION UNDER SECTION 154 OF THE ACT WAS TAKEN. THE CIT(A) OBSERVED THAT REASONS HAVE BEEN RECORDED UNDER SECTION 147/148 OF THE ACT ON THE BASIS OF AUDIT OBJECTION. THE CIT(A) FURTHER RELIED ON THE DECISI ON OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF ICICI HOME FINANCE CO. LTD. VS. ACIT IN WRIT PETITI ON NO.430 OF 2012 TO HOLD THAT THE REQUISITE BELIEF FOR INVOKING S ECTION 147 HAS TO BE THAT OF ASSESSING OFFICER HIMSELF AND CANNOT BE OF SOME OTHER AUTHORITY. IN THE LIGHT OF THE AFORESAID FACTS AND THE DECISION OF HONBLE HIGH COURT, THE CIT(A) HELD THE PROCEEDINGS UNDER SECTION 147 OF THE ACT AS BAD IN LAW. THE RELEVANT FINDINGS OF THE CIT(A) IS REPRODUCED HEREINUNDER FOR READY REFE RENCE :- 3.2 I HAVE EXAMINED THE SUBMISSIONS MADE ON BEHALF OF THE APPELLANT WITH REGARD TO THE STATUTORY PROVISION RELATING TO SEC. 147. THE EARLIER PROVISIONS OF SEC. 147 REQUIRED THE ASSESSING OFFICER TO REOPEN ASSESS MENT IF, IN HIS OPINION AND BY REASONS TO BE RECORDED BY HIM IN WRITING THAT INCOM E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, TO ASSESS OR REASSESS SUCH INCO ME, SUBJECT TO THE PROVISION OF SEC. 148 TO 153. HOWEVER, BY THE AMENDMENT BROUG HT IN BY THE DIRECT TAX LAWS (AMENDMENT) ACT, 1989 W.E.F. 01.04.1989 AND THE INS ERTION OF THE WORDS 'REASONS TO BELIEVE' IN THAT SECTION, REASSESSMENT ON THE BASIS OF 'CHANGE OF OPINION' CANNOT, PER SE, FORM THE REASON TO REOPEN. SINCE THE REOPEN ING THE PRESENT CASE IS WITHIN 04 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YE AR THAT IS BEFORE 31.03.2012, IT IS SEEN THAT THE PROVISO TO SEC. 147 [WHICH PLACES FETTERS ON THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT ALREADY COMPLETED U/S 143(3) OR 147, UNLESS INCOME HAS ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN U/S 139 OR IN RESPONSE TO NOTICE ISSUED UNDER SEC. 142( 1) OR 148 OR TO DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESS ARY FOR ASSESSMENT FOR THAT ASSESSMENT YEAR] DOES NOT APPLY. 3.3. HOWEVER, IT IS SEEN THAT THE REASSESSMENT AMOU NTS TO 'CHANGE OF OPINION' SINCE IT IS ONLY AFTER APPLICATION OF MIND AND REVI EW OF THE AUDITED ANNUAL ACCOUNT, TAX AUDIT REPORT, INVOICES AND OTHER DETAILS FILED VIDE LETTER DATED 18.11.2009 (REFERRED TO IN PARA 3 SUPRA) THAT THE ASSESSING OF FICER ALLOWED DEPRECIATION @80% ON THE COST OF 11 WINDMILLS AND @40% ON ONE WINDMIL L IN THE ORIGINAL ASSESSMENT ORDER, SINCE THE ASSESSING OFFICER HAD RECORDED AT PARA 4 OF THE IMPUGNED ORDER THAT THE APPELLANT COMPANY HAS INSTALLED 12 WINDMIL LS OF 1250 KW AT DIST. DHULE DURING THE YEAR UNDER ASSESSMENT. THE APPELLANT HAS RELIED UPON THE DELHI HIGH COURT DECISION IN THE CASE OF CIT V KELVINATOR OF I NDIA REPORTED IN 256 ITR 1 (FB), WHICH WAS SUBSEQUENTLY AFFIRMED BY THE HON'BLE SUPR EME COURT IN 320 ITR 561. THE HON'BLE APEX COURT HELD, VIS A VIS THE POWER OF THE ASSESSING OFFICER TO REOPEN THAT WHILE HAVING REASONS TO BELIEVE TO INCOME HAD ESCAPED ASSESSMENT, ASSESSMENTS COULD NOT BE REOPENED MERELY ON THE BAS IS OF CHANGE OF OPINION. IT WAS HELD:- THEREFORE, POST APRIL 1, 1989, POWER TO REOPEN I S MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WOR DS 'REASON TO BELIEVE FAILING WHICH WE ARE AFRAID. SECTION 147 WOULD GIVE ARBITR ARY POWERS TO THE 6 ITA NO.2065/PN/2013 ASSESSING OFFICER TO REOPEN ASSESSMENTS ON THE BASI S OF MERE CHANGE OF OPINION, WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REV IEW AND POWER TO REASSESS. THE ASSESSING OFFICER HAS NO POWER TO RE VIEW; HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON F ULFILMENT OF CERTAIN PRECONDITIONS AND IF THE CONCEPT OF CHANGE OF OPIN ION IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENTAL, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK ABUSE OF POWER BY THE ASSESS ING OFFICER. HENCE, AFTER APRIL 1, 1989, THE ASSESSING OFFICER H AS POWER TO REOPEN, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUS ION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LI NK WITH THE FORMATION OF THE BELIEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMEN DMENT) ACT, 1987, PARLIAMENT NOT ONLY DELETED THE WORDS 'REASONS TO B ELIEVE' BUT ALSO INSERTED THE WORD 'OPINION' IN SECTION 147 OF THE ACT. HOWEVER. ON RECEIPT OF REPRESENTATIONS FROM THE COMPANIES AGAINST OMISSION OF THE WORDS 'R EASON TO BELIEVE', PARLIAMENT REINTRODUCED THE SAID EXPRESSION AND DELETED THE WO RD 'OPINION' ON THE GROUND THAT IT WOULD VEST ARBITRARY POWERS IN THE ASSESSING OFFICE R. ' 3.4. IT HAS ALSO BEEN POINTED OUT TO ME THAT FOLLOW ING AN AUDIT OBJECTION ON THE VERY SAME ISSUE, THE LEARNED ASSESSING OFFICER ISSU ED NOTICE U/S 154/155 DATED 09.12.2011 DIRECTING THE APPELLANT TO SHOW CAUSE WH Y THE MISTAKE WHICH IS APPARENT FROM RECORD, NAMELY GRANT OF EXCESS DEPREC IATION, MAY NOT BE RECTIFIED. NO FURTHER ACTION WAS TAKEN U/S 154 ON RECEIPT OF T HE REPLY OF THE APPELLANT. HOWEVER, THE LEARNED ASSESSING OFFICER ISSUED NOTIC E U/S 148 ON 30.03.2012. THE APPELLANT HAS CLAIMED THAT THE JURISDICTIONAL BOMBA Y HIGH COURT IN THE CASE OF ICICI HOME FINANCE CO. LTD. VS. ACIT IN WRIT PETITION NO. 430 OF 2012 HAS HELD THAT THE POWER TO REOPEN A COMPLETED ASSESSMENT HAS BEEN BES TOWED ON THE ASSESSING OFFICER, BASED ON HIS REASONABLE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND IT CANNOT BE AN OPINION AND/OR BELIE F OF SOME OTHER AUTHORITY. THE BOMBAY HIGH COURT HELD THAT THE ASSESSING OFFICER C ANNOT BLINDLY FOLLOW THE OPINION OF AN AUDIT AUTHORITY FOR THE PURPOSES OF ARRIVING AT A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. THE BOMBAY HIGH COURT ALSO FOLLOWED THE SUPREME COURT DECISION IN THE CASE OF KELVINATOR INDIA LTD. TO HOLD THAT EVEN THOUGH THE POWER OF REOPENING BEFORE THE EXPIRY OF 04 YEARS FROM END OF THE RELEV ANT ASSESSMENT YEARS, IS VERY WIDE, EVEN THEN SUCH A POWER WOULD NOT JUSTIFY A RE VIEW OF THE ASSESSMENT ORDER ALREADY PASSED. 3.5. FOLLOWING THE DECISIONS CITED SUPRA. IT IS THE REFORE, HELD THAT THE REOPENING OF THE COMPLETED ASSESSMENT AMOUNTS TO 'CHANGE OF OPINION' WHICH IS NOT PERMISSIBLE IN LAW. GROUND NOS. 1 AND 2 ARE ALLOWED . 8. THE LD. DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE VEHEMENTLY CONTENDED THAT THE ACTION OF THE ASSESSING OFFICER IN INVOKING THE POWERS VESTED WITH HIM UNDER SECTION 147 OF THE ACT IS FULLY JUST IFIABLE AND IS IN ACCORDANCE WITH LAW. IN THE PRESENT CASE, THE NOTICE HAS BEEN ISSU ED UNDER THE MAIN PROVISIONS OF SECTION 147 WITHIN 4 YEARS FROM THE END OF THE RELE VANT ASSESSMENT YEAR. THEREFORE, THE EMBARGO AS PROVIDED IN PROVISO(S) TO SECTION 147 OF THE ACT IS NOT APPLICABLE AT ALL. THE LD. DR CONTENDED THAT SO LO NG AS THE ASSESSING OFFICER HAS 7 ITA NO.2065/PN/2013 REASON TO BELIEVE THAT CHARGEABLE INCOME HAS ESCA PED ASSESSMENT BY WHATEVER REASON HE IS ENTITLED TO TAKE ACTION UNDER SECTION 147 OF THE ACT. THE SCOPE AND AMBIT OF SECTION 147 OF THE ACT IS VERY WIDE AFTER ITS AMENDMENT IN 1989. THERE IS A GLARING CASE OF ESCAPEMENT OF INCOME BY CHARGING EX CESS DEPRECIATION AND APPLYING THE SAME RATE OF ACCELERATED DEPRECIATION AS PROVIDED FOR WINDMILLS TO THE CIVIL CONSTRUCTION WORK AND ELECTRICAL WORK, WHICH CANNOT BE EQUATED WITH WINDMILLS PER SE . IT IS IMMATERIAL WHETHER THE ASSESSING OFFICER SUO MOTU FINDS THE ERROR OR WHETHER IT IS BROUGHT TO HIS NOTICE BY AUDIT PARTY OR ANY OTHER AGENCY. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF THE HONB LE SUPREME COURT OF INDIA IN THE CASE OF INDI-ADEN SALT MFG. & TRADING CO. (P.) LTD. VS. CIT REPORTED AS 25 TAXMAN 356 (SC) AND THE DECISION OF HONBLE KERALA HIGH COURT IN THE CA SE OF CIT VS. NATIONAL TYRES & RUBBER CO. OF INDIA LTD. REPORTED AS 202 TAXMAN 625 (KERALA). 9. THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSESS EE, ON THE OTHER HAND, VEHEMENTLY CONTENDED THAT FROM A CONJOINT READING O F THE ORIGINAL ASSESSMENT ORDER AND REASONS RECORDED UNDER SECTION 148(2) OF THE AC T, IT IS SELF-EVIDENT THAT FULL FACTS CONCERNING CLAIM OF DEPRECIATION WERE PLACED BEFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT. IT IS FURTHER EVIDENT THAT TH E ASSESSING OFFICER IN THE FIRST ROUND OF PROCEEDINGS HAS ALLOWED THE CLAIM OF DEPRECIATIO N AFTER DUE DILIGENCE AND INDULGENCE. THE ASSESSING OFFICER DISALLOWED PART OF DEPRECIATION AND ALSO MADE ADJUSTMENTS HAVING REGARD TO THE TAX AUDIT REPORT E TC.. THEREFORE, IT WILL BE FARFETCHED TO SAY THAT NO OPINION WAS FORMED ON THE CLAIM OF THIS STAGGERING AMOUNT OF DEPRECIATION. THERE WAS NO REMISSNESS ON THE PA RT OF THE ASSESSING OFFICER IN THE FIRST ASSESSMENT. THE LD. AR STRIDENTLY PLEADE D THAT THE ORDER OF THE CIT(A) IS PASSED ON LEGALLY SOUND BASIS AND NO INTERFERENCE I S CALLED FOR. TO SUPPORT HIS CASE THAT THE REOPENING IS NOT PERMISSIBLE ON THE B ASIS OF MERE CHANGE OF OPINION AND FOR THE PURPOSES OF REVIEW OF HIS OWN ORDER, HE RELIED ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KELVINATOR OF INDIA (SUPRA) AS APPROVED BY 8 ITA NO.2065/PN/2013 THE HONBLE APEX COURT. HE FURTHER RELIED ON A REC ENT DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. M/S. JET SPEED AUDIO PVT. LTD. IN INCOME TAX APPEAL NO.285 OF 2013 DECIDED ON 28 TH JANUARY, 2015 TO REAFFIRM THE PROPOSITION THAT IN THE ABSENCE OF ANY TANGIBLE MAT ERIAL, REOPENING IS NOT PERMISSIBLE ON A MERE CHANGE OF OPINION. 10. WE HAVE HEARD THE SUBMISSIONS OF RIVAL SIDES AN D PERUSED THE ORDERS OF AUTHORITIES BELOW. WE HAVE CONSIDERED LEGAL OBJECT ION ON APPLICABILITY OF SECTION 147 OF THE ACT IN THE FACTS OF THE CASE DISPASSIONA TELY. IT IS SEEN FROM THE ORIGINAL ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT TH AT THE ASSESSING OFFICER HAS TAKEN DUE NOTE OF THE FACT THAT THE ASSESSEE HAS IN STALLED 12 WINDMILLS. IT IS ALSO EVIDENT FROM THE MATERIAL PLACED BEFORE US THAT THE RELEVANT INVOICES AND DETAILS PERTAINING TO CLAIM OF DEPRECIATION ON THESE WINDMI LLS AND OTHER ITEMS WERE DULY PROVIDED DURING THE COURSE OF ORIGINAL ASSESSMENT. IN THE ORIGINAL ASSESSMENT ORDER, CERTAIN PORTION OF DEPRECIATION HAS BEEN DIS ALLOWED ON VEHICLES. IT IS FURTHER SEEN FROM PARA 11 OF THE ORIGINAL ASSESSMENT ORDER THAT SOME DIFFERENCE IN DEPRECIATION CLAIMED IN THE RETURN QUA TAX AUDIT REPORT WAS ALSO OBSERVED AND ADJUSTED IN THE ASSESSED INCOME. THEREFORE, THE AS SESSING OFFICER WAS PRIVY TO MATERIAL FACTS CONCERNING THE CLAIM OF DEPRECIATION WHILE FRAMING THE ORIGINAL ASSESSMENT. IT IS APPARENT FROM THE FACTS THAT THE ASSESSING OFFICER HAD APPLIED HIS MIND WHILE ADMITTING THE CLAIM OF DEPRECIATION ON W INDMILLS. THEREFORE, IT CANNOT BE SAID THAT THE CORRECTNESS OF CLAIM OF DEPRECIATION WAS NOT EXAMINED BY THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMEN T PROCEEDINGS. THUS, THE PLEA OF ASSESSEE THAT THE RELEVANT FACTS AND MATERIAL WERE CALLED FOR AND EXAMINED IN THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS IS NOT WI THOUT ANY FORCE. ON PERUSAL OF THE REASONS RECORDED FOR REOPENING, I T IS CLEAR THAT SO CALLED MISTAKE IN CLAIMING DEPRECIATION WAS GATHERED FROM THE ASSESSMENT RECORDS ITSELF AND THERE IS NO FRESH MATERIAL AVAILABLE AT THE COM MAND OF THE ASSESSING OFFICER TO 9 ITA NO.2065/PN/2013 INVOKE THE PROVISIONS OF SECTION 147 OF THE ACT. H ENCE, WE HAVE NO HESITATION IN HOLDING THAT THE ACTION OF THE ASSESSING OFFICER IN INVOKING THE PROVISIONS OF SECTION 147/148 OF THE ACT IS TO ENABLE HIM TO REVIEW HIS O WN ACTION OF ACCEPTING DEPRECIATION CLAIM IN THE ORIGINAL ASSESSMENT. THI S IS CLEARLY NOT PERMISSIBLE IN LAW. THE COURTS HAVE TIME AND AGAIN HELD THAT IN THE ABS ENCE OF NEW FACTS OR MATERIAL, THE ASSESSING OFFICER CANNOT INVOKE SECTION 147 TO REVIEW HIS OWN ORDER. NO NEW FACTS HAVE COME ON RECORD AFTER ASSESSMENT. 11. THE FULL BENCH OF THE HONBLE DELHI HIGH COURT IN THE CASE OF KELVINATOR OF INDIA (SUPRA), INTER-ALIA , HAS OBSERVED THAT SECTION 147 ENABLING JURISDICTI ON WILL ITSELF BE RENDERED UNCONSTITUTIONAL AND ULTRA-VIRUS ARTICLE 14 OF THE CONSTITUTION OF INDIA, IF THE STATE ACTION OF ARBITRARY REOPENING THE CASE ON MERE CHANGE OF OPINION IS APPROVED. THE HONBLE DELHI HIGH COURT ALSO TOOK N OTE OF CLAUSE 7.2 CBDT NO.549 DATED 31.10.1989, ACCORDING TO WHICH, REOPENING ON MERE CHANGE OF OPINION WILL NOT AMOUNT TO REASONS TO BELIEVE AS CONTEMPLATED UNDER SECTION 147 OF THE ACT. WE ARE ALSO GUIDED BY DECISION OF THE HONBLE JURIS DICTIONAL HIGH COURT IN THE CASE OF (I) NDT SYSTEMS VS. ITO REPORTED IN (2013) 255 CTR 113 (BOM.) ; (II) MS. PARVEEN P. BHARUCHA VS. DCIT REPORTED IN (2013) 348 ITR 325 (BOM.) ; AND, (III) SIEMENS INFORMATION SYSTEMS LTD. VS. ACIT REPORTED IN 214 CTR 16 (BOM.) FOR THE PROPOSITION THAT FRESH APPLICATION OF MIND ON THE S AME SET OF FACTS AMOUNTS TO CHANGE OF OPINION AND REOPENING IS NOT WARRANTED ON CHANGE OF OPINION. IN THE PRESENT CASE, THE RELEVANT FACTS AND MATERIA L CONCERNING THE DEPRECIATION ON WINDMILLS ETC. WAS ADMITTEDLY PLACE D BEFORE THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS AND THE ASSE SSING OFFICER AFTER DUE INDULGENCE PASSED THE ASSESSMENT ORDER. THE ONLY R EASON FOR REOPENING IS AUDIT OBJECTION RECEIVED BY THE ASSESSING OFFICER WHICH L ED TO ISSUANCE OF NOTICE UNDER SECTION 154 INITIALLY, FOLLOWED BY NOTICE UNDER SEC TION 148 OF THE ACT. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF M/S JET SPEED AUDI O PVT. LTD. (SUPRA) AFFIRMING 10 ITA NO.2065/PN/2013 THE ORDER OF THE TRIBUNAL HELD THAT RE-ASSESSMENT W ITHOUT MENTION OF ANY TANGIBLE MATERIAL IN THE REASONS RECORDED IS UNJUSTIFIED. 12. THE LD. DEPARTMENTAL REPRESENTATIVE IN SUPPORT OF HIS SUBMISSIONS HAS PLACED RELIANCE ON THE CASE OF NATIONAL TYRES & RUB BER CO. OF INDIA LTD. (SUPRA). IN THE SAID CASE, THE HONBLE KERALA HIGH COURT HELD T HAT, IT IS IMMATERIAL WHETHER THE ESCAPEMENT IS EITHER ON ACCOUNT OF IGNORANCE OF LAW OR OMISSION ON THE PART OF THE ASSESSEE OR THE ASSESSING OFFICER. SO LONG AS THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT AND THE ASSESSING OFFICER HAS RE ASON TO BELIEVE SO, WHETHER SUO MOTU FOUND BY HIM FROM RECORDS OR WHETHER BROUGHT TO HI S NOTICE BY AUDIT PARTY OR OTHER AGENCY, THE ASSESSING OFFICER WILL BE JUST IFIED TO INVOKE THE PROVISIONS OF SECTION 147 OF THE ACT WITHIN THE PERIOD OF LIMITAT ION PROVIDED THEREIN. THE QUESTION BEFORE THE HONBLE HIGH COURT WAS WHETHER THE OMISS ION OF THE ASSESSING OFFICER TO MAKE ASSESSMENT ON CAPITAL GAIN IN REGULAR ASSESSME NT COMPLETED UNDER SECTION 143(3) OF THE ACT IS A GROUND JUSTIFYING THE REASON S OF ASSESSMENT UNDER SECTION 147 OF THE ACT OR NOT. IN THAT CASE, IT WAS FOUND THAT ASSESSEE HAD NOT RETURNED ANY CAPITAL GAINS FOR THE ASSESSMENT UNDER SECTION 45(2 ) OF THE ACT. THE ASSESSING OFFICER HAD NO OCCASION TO CONSIDER THE ASSESSEES LIABILITIES UNDER THE SAID SECTION. THE AUDIT PARTY BROUGHT TO THE NOTICE OF THE ASSESS ING OFFICER THAT INCOME CHARGEABLE TO TAX UNDER SECTION 45(2) HAS ESCAPED A SSESSMENT. IT WAS OBSERVED THAT THERE WAS NO CONSIDERATION OF ISSUE IN THE REG ULAR ASSESSMENT BY THE ASSESSING OFFICER AND THEREFORE, THE ASSESSING OFFI CER HAD NO OCCASION TO FORM ANY OPINION. IN THE BACKDROP OF THESE FACTS, THE HONB LE HIGH COURT HELD THE REASSESSMENT PROCEEDINGS TO BE VALID. ANOTHER DECISION RELIED UPON BY THE LD. DEPARTMENTA L REPRESENTATIVE IS IN THE CASE OF INDI-ADEN SALT MFG. & TRADING CO. (P.) LTD. (SUPRA). IN THAT CASE, IT WAS AN ADMITTED POSITION THAT THE ASSESSEE HAD NOT DISC LOSED THE VITAL FACTS CONCERNING THE CLAIM OF DEPRECIATION. IT WAS THE CONTENTION O F THE ASSESSEE THAT THE ASSESSING 11 ITA NO.2065/PN/2013 OFFICER COULD HAVE FOUND THE POSITION BY FURTHER PR OBE. IN THESE FACTS, IT WAS HELD BY THE HONBLE SUPREME COURT THAT THERE HAS BEEN NON-D ISCLOSURE OF PRIMARY FACTS CONCERNING THE ISSUE WHICH HAS CAUSED ESCAPEMENT OF INCOME WHICH IS BASICALLY A QUESTION OF FACT. IN THE PRESENT CASE, IT IS NOWHE RE STATED, EITHER IN THE RECORDED REASONS, OR IN THE ASSESSMENT ORDER AS TO WHAT MATE RIAL FACTS HAS NOT BEEN DISCLOSED IN THE ORIGINAL ASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER IS MERELY SEEKING REVIEW OF HIS ORIGINAL ASSESSMENT ORDER ON SOME SET OF FACTS, WHICH IS NOT PERMISSIBLE IN LAW. 13. IN THE LIGHT OF THE AFORESAID FACTS, WE FIND NO MERIT IN THE GROUNDS CHALLENGING THE ORDER OF THE CIT(A) IN QUASHING THE REASSESSMEN T PROCEEDINGS. THE ORDER OF CIT(A) CANNOT BE FAULTED IN LAW. THUS, THE GROUND NO.2 IN THE REVENUES APPEAL RELATING TO LEGALITY OF REASSESSMENT PROCEEDINGS IS DISMISSED. 14. ON MERITS, THE LD. AUTHORIZED REPRESENTATIVE FO R THE ASSESSEE CONTENDED THAT THE CIVIL CONSTRUCTION WORK AND ELECTRICAL INS TALLATION IS VITAL AND INTEGRAL PART OF THE WINDMILLS AND CANNOT BE ISOLATED. THE CIVIL CO NSTRUCTION AND ELECTRICAL WORK ARE SPECIFICALLY DESIGNED FOR OPERATION OF THE WINDMILL S AND ARE NOT SEPARABLE. THEREFORE, DEPRECIATION ON THESE STRUCTURES/FITTING S HAVE TO BE APPLIED AT THE SAME RATE, AS IS AVAILABLE TO THE PRINCIPLE ASSET I.E. W INDMILL. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. COOPER FOUNDARY PVT. LTD. IN INCOME TAX APPEAL NO.1326 OF 2010 DECIDED ON 14 TH JUNE, 2011. IT WAS HELD BY THE HONBLE HIGH COURT IN THAT CASE THAT FINDINGS RECORDED BY THE TRIBUNAL THAT RCC FOUNDATION FORMS INTEGRAL PAR T OF THE WINDMILL IS A FINDING OF FACT AND NO QUESTION OF LAW ARISES FROM THE SAME. THE LD. AR FURTHER RELIED ON THE DECISION OF PUNE BENCH OF THE TRIBUNAL IN THE CASE OF DCIT VS. SUSHANT M. JADAV IN ITA NO.166/PN/2012 DECIDED ON 26.04.2013 WHERE ON THE SIMILAR FACTS THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE ON MERIT S. 12 ITA NO.2065/PN/2013 15. ON THE OTHER HAND, THE LD. DEPARTMENTAL REPRESE NTATIVE FOR THE REVENUE RELIED ON THE ORDER OF THE ASSESSING OFFICER AND CO ULD NOT CONTROVERT THE DECISIONS RELIED ON BY THE LD. AR. 16. THUS, ON MERITS AS WELL THE ASSESSEE HAS PRIMA FACIE CASE IN ITS FAVOUR. SINCE THE APPEAL OF THE REVENUE IS DISMISSED ON THE ISSUE OF JURISDICTION ASSUMED BY THE ASSESSING OFFICER UNDER SECTION 147, THE ISS UE ON MERIT HAS BECOME ACADEMIC. 17. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED ON THIS 12 TH DAY OF AUGUST, 2015. SD/- SD/- ( R.K. PANDA ) ( VIKAS AWASTHY ) / ACCOUNTANT MEMBER # / JUDICIAL MEMBER PUNE ; DATED : 12 TH AUGUST, 2015. %&'#()!*!+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-III, PUNE; 4) THE CIT-III, PUNE; 5) THE DR A BENCH, I.T.A.T., PUNE; 6) GUARD FILE. %, / BY ORDER , ' # //TRUE COPY// $%& # '( / SR. PRIVATE SECRETARY ) '*, / ITAT, PUNE