Smt. Jasumatiben Nanchand Shah, Vapi V. The Income tax Officer,Ward-2, Vapi

ITA 2279/AHD/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0289 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2001-2002
• Appeal Filed On: 23-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJEEV AGARWAL
• Assessee Lawyers: R M UPADHYAY
• Keywords: Reopening of assessment; Difference of opinion; Competent authority; Change of opinion
• Section: 143(3); 244A; 80HHC; 143(1); 80HH; 148; 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, A-BENCH, AHMEDABAD. BEFORE: SHRI R. V. EASWAR, VICE PRESIDENT , AND SHRI D. C. AGRAWAL, ACCOUNTANT MEMBER. ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) SMT. JASUMATIBEN N. SHAH PROP. OF PADMAVATI EXIM B/G-3, RAJNIGANDHA APARTMENT CHALA, VAPI. VERSUS INCOME TAX OFFICER, WARD-2, VAPI. (APPELLANT) (RESPONDENT) PAN: AEQPS 7568 R FOR THE APPELLANT: SHRI R.M. UPADHYAY, AR FOR THE RESPONDENT SHRI RAJEEV AGARWAL, DR ORDER PER D C AGRAWAL (ACCOUNTANT MEMBER) : THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. COMMISSIONER OF I NCOME TAX(APPEALS) DATED 30-04-2009 AGAINST HIS DECISION TO UPHOLD THE REOPENING OF ASSESSMENT UNDER SECTION 148(1). THE FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S. PADMAVATI EXIM, VA PI. IT IS ENGAGED IN THE BUSINESS OF EXPORTING COMPUTER SOFTWARE. THE A SSESSEE FILED RETURN OF INCOME FOR THE ASSESSMENT YEAR 2001-02 ALONG WITH A UDITED STATEMENT OF ACCOUNTS. AS PER AUDIT REPORT TURNOVER OF EXPORT W AS RS. 26,18,499/- SHOWING NET EXPORT INCOME OF RS. 20,20,972/-. THE RETURN WAS ORIGINALLY PROCESSED UNDER SECTION 143(1) ON 19-10-02, BUT LAT ER WAS COMPETED UNDER SECTION 143(3) ALSO ON 29-08-2003 ACCEPTING T HE RETURNED INCOME. IN THE RETURN OF INCOME FILED THE ASSESSEE HAD CLAI MED DEDUCTION UNDER SECTION 80HHE AMOUNTING RS. 20,20,972/-. IT WAS DI SALLOWED BY THE ASSESSING OFFICER. 2. THE CASE WAS TRANSFERRED UNDER SECTION 127 TO HI M BY THE CIT, VALSAD. FOR DISALLOWING THE CLAIM U/S 80HHE HE FOR MED CERTAIN OPINION, 2 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) WHICH IS INCORPORATED BY THE HIM IN THE REASONS REC ORDED FOR REOPENING OF THE ASSESSMENT UNDER SECTION 148(1). (A) THE ASSESSEE HAS NOT FILED ANY AGREEMENT WITH THE PARTY TO WHOM THE ALLEGED SOFTWARE PROGRAMMED WAS EXPORTED. IN THE ABSENCE OF THIS IT IS NOT POSSIBLE TO ASCERTAIN THE TERMS AND CONDITIONS OF THE WORK CONTRACT LIKE THE TYPE O F WORK ALLOTTED, TIME FRAME WITHIN WHICH, WORK SHOULD BE C OMPLETED AND THE TERMS OF PAYMENT. JUST A PHOTOCOPY OF A CO MPUTER GENERATED DOCUMENT CLAIMING THAT IT IS RECEIVED FRO M UNIVERSITY OF CALIFORNIA WILL NOT SUFFICE AND CANNO T BE TREATED AS EVIDENCE. (B) THE ASSESSEE HAS NEITHER TECHNICAL KNOWLEDGE NO R THE INFRASTRUCTURE TO CARRY OUT THE WORK FROM INDIA. (C) THE VERY PEOPLE THAT THE ASSESSEE CLAIMS TO HAV E HIRED FOR THE WORK HAVE NO KNOWLEDGE OF SOFTWARE PROGRAMMING. (D) THE ABOVE POINTS AMPLY PROVE THAT THE ASSESSEE HAS FAILED TO FULFILL THIS VERY BASIC REQUIREMENT THAT THE WORK W AS ACTUALLY DONE IN INDIA. THE ASSESSEE FAILED TO DISCHARGE TH E ONUS OF PROVING THE BASIC REQUIREMENT TO CLAIM DEDUCTION U/ S. 80HHE THAT THE WORK OF SOFTWARE DEVELOPMENT WAS ACT UALLY DONE IN INDIA. 3. ACCORDINGLY, ON THE BASIS OF THE ABOVE REASONS A ND FURTHER OBSERVING THAT SHRI. MAMTESH H. LAD, THROUGH WHOM, THE ASSESSEE CLAIMED TO HAVE DEVELOPED THE SOFTWARE IN THE ASSES SMENT YEAR 2003- 2004, DID NOT HAVE ANY TECHNICAL COMPUTER KNOWLEDGE AND THE SAID MAMTESH H. LAD WAS ALSO EMPLOYED DURING THE YEAR UN DER CONSIDERATION WITH THE ASSESSEE FURTHER THE FACTS IN THE PRESENT ASSESSMENT YEAR WAS CONSIDERED SIMILAR TO THOSE IN THE ASSESSMENT YEAR 2003-2004, HE DISALLOWED THE CLAIM UNDER SECTION 80HHE THIS YEAR ALSO. 4. THE LD. COMMISSIONER OF INCOME TAX(APPEALS) CONF IRMED THE ORDER OF THE ASSESSING OFFICER THROUGH A CRYPTIC OR DER BY OBSERVING AS UNDER: 3 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) I HAVE CONSIDERED THE RIVAL CONTENTIONS. THE FACT REMAINS THAT EVEN IN THE YEAR UNDER REFERENCE, THERE WERE INFOR MATION AND MATERIAL IN THE POSSESSION OF THE ASSESSING OFFICER WHICH ENABLED HIM TO FORM A BELIEF THAT CERTAIN INCOME IS ESCAPIN G ASSESSMENT IN CASE OF THE APPELLANT AND THEREFORE THE ASSESSING O FFICER HAS PROCEEDED TO RE-OPEN THE ASSESSMENT AFTER RECORDING THE REASONS FOR RE-OPENING THE ASSESSMENT. I AM THEREFORE INCL INED TO DISAGREE WITH THE CONTENTION OF THE AR OF THE ASSESSEE THAT THE ASSESSING OFFICER HAS ERRED IN LAW AND ON FACTS TO ISSUE NOTI CE AFTER A PERIOD OF 4 YEARS FOR A.Y. 2001-02 OVERLOOKING THE FACT TH AT EVERY ASSESSMENT YEAR IS DIFFERENT AND DISTINCT AND ASSES SMENT OF A.Y. 2001-02 OVERLOOKING THE FACT THAT EVERY ASSESSMENT YEAR IS DIFFERENT AND DISTINCT AND ASSESSMENT OF A.Y. 2003-04 HAS NO BEARING WITHOUT BRINGING ANY EVIDENCES ON RECORD THAT THE I DENTICAL FACTS EXIST. AS THE ASSESSING OFFICER HAS ACTED ON THE B ASIS OF THE FACTS AND MATERIAL IN HIS HAND AND SINCE THE FACTS ARE ID ENTICAL WITH THE ASST. YEAR 2003-04, THERE IS NO REASON DCTRA TO AC CEPT THE ARGUMENTS OF THE AR OF THE ASSESSEE. THE APPELLANT S GROUND NO. 3 AND 5 ARE DISMISSED. 5. BEFORE US, LEARNED AR FOR THE ASSESSEE SUBMITTED THAT ALL THE NECESSARY EVIDENCE IN SUPPORT OF INCOME RETURNED AN D DEDUCTION CLAIMED HAS BEEN FILED DURING THE COURSE OF ORIGINAL ASSESS MENT PROCEEDINGS. THE BUSINESS OF THE ASSESSEE WAS SET UP IN THE ASSESSME NT YEAR 2000-2001. ORIGINAL ASSESSMENT ORDER FOR THE A.YR. 2001-2002 W AS PASSED UNDER SECTION 143(3) AND WAS A SCRUTINY ASSESSMENT. IT WA S PASSED AFTER SATISFACTION OF THE ADDITIONAL/JOINT COMMISSIONER O F INCOME TAX. THE ASSESSING OFFICER HAS MADE APPELLATE ORDER OF THE L D. COMMISSIONER OF INCOME TAX(APPEALS) AS THE BASIS FOR REOPENING THE ASSESSMENT, HOWEVER THAT ORDER IS CHALLENGED BEFORE THE ITAT. LEARNED AR OF THE ASSESSEE 4 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) SUBMITTED THAT APPELLATE ORDER FOR THE ASSESSMENT Y EAR 2003-2004 WAS PASSED ON 30-11-2006 AND THE ASSESSMENT FOR THE ASS ESSMENT YEAR 2001- 2002 WAS REOPENED BY ISSUING NOTICE ON 31-03-2008 A FTER EXPIRING OF 4 YEARS FROM END OF THE RELEVANT ASSESSMENT YEAR. TH ERE IS NO ALLEGATION OF ESCAPEMENT OF INCOME DUE TO OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL F ACTS NECESSARY FOR ASSESSMENT. THEREFORE REOPENING IS BAD IN LAW. TH E LEARNED AR OF THE ASSESSEE REFERRED TO THE DECISION OF THE HON'BLE GU JARAT HIGH COURT IN AUSTIN ENGINEERING COMPANY LIMITED VS. JCIT (2009) 312 ITR 71 (GUJARAT) FOR THE PROPOSITION THAT IT WOULD BE A CH ANGE OF OPINION OF ASSESSING OFFICER IF ASSESSMENT IS REOPENED ON THE BASIS OF SUBSEQUENT DECISION OF HON'BLE SUPREME COURT. IN THE PRESENT CASE ASSESSMENT HAS BEEN REOPENED ON THE BASIS OF DECISION OF LD. COMMI SSIONER OF INCOME TAX(APPEALS) FOR THE ASSESSMENT YEAR 2003-2004. HE NCE, REOPENING IS BAD. ON MERIT LEARNED AR OF THE ASSESSEE SUBMITTED THAT NECESSARY CERTIFICATE IN FORM NO. 10CCAF HAS BEEN FILED BEFOR E THE ASSESSING OFFICER. EXPORT PROCEEDS EQUIVALENT TO US $ 56,340 /- WERE RECEIVED BY STATE BANK OF INDIA. NECESSARY CERTIFICATE HAS BEE N ISSUED BY STATE BANK OF INDIA WHICH IS PLACED ON PAGE NO. 12 OF THE ASSE SSED PAPER BOOK INDICATING THAT IT IS UNIVERSITY OF CALIFORNIA TO W HICH THE SOFTWARE SO DEVELOPED BY THE ASSESSEE COMPANY WAS TRANSMITTED. THE SAME UNIVERSITY OF CALIFORNIA HAS REMITTED THE NECESSARY PROCEEDS. IT IS MENTIONED BY THE ASSESSING OFFICER IN THE ORIGINAL ORDER PASSED ON 29-08-2003 THAT ALL THE NECESSARY CONDITIONS FOR CL AIMING DEDUCTION UNDER SECTION 80 HHE ARE FULFILLED. 6. ON THE OTHER HAND, LEARNED DR RELIED ON THE ORDE R OF THE AUTHORITIES BELOW: 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PER USING THE MATERIAL ON RECORD. IN OUR CONSIDERED VIEW, THE RE OPENING OF THE 5 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) ASSESSMENT CANNOT BE SUSTAINED. THERE ARE 3 REASON S FOR REOPENING OF THE ASSESSMENT WHICH WAS ORIGINALLY DONE UNDER SECTION 143(3) VIDE ORDER OF THE ASSESSING OFFICER DATED 29-08-2003. THEY ARE A S UNDER: 1. CLAIM OF DEDUCTION UNDER SECTION 80 HHE IS WRONG . 2. INTEREST UNDER SECTION 244A AMOUNTING TO RS. 143 8 AND 808 RECEIVED UNDER SECTION 244A IS NOT OFFERED FOR TAXA TION. 3. FDR INTEREST AMOUNTING TO RS. 69,828/- CREDITED IN THE CAPITAL ACCOUNT BY THE ASSESSEE WAS NOT OFFERED FOR TAXATIO N IN THE ORIGINAL ASSESSMENT. 8. REGARDING FIRST ISSUE, WE NOTICE THAT IN THE ORI GINAL ASSESSMENT PASSED ON 29-08-2003, THE ASSESSING OFFICER HAD OBS ERVED AS UNDER: INCOME FROM SOFTWARE PROGRAM:- THE BUSINESS HAS BEEN SET UP FROM A.Y. 2000-2001 WI TH CALIFORNIA UNIVERSITY. THE BUSINESS HAS BEEN RUN I N THE NAME & STYLE OF M/S. PADMAVATI EXIM PROP. SMT. JASUMATI N. SHAH. THE ASSESSEE HAS DISCLOSED NET PROFIT OF RS. 25,26,215/ - FROM THE AFORESAID BUSINESS AS AGAINST RS. 21,45,025/- SHOWN IN THE IMMEDIATE PRECEDING YEAR. THE ASSESSEE HAS FULFILL ED ALL THE CONDITIONS AS LAID DOWN IN SECTION 80HHE OF THE ACT , AS SUCH THE CLAIM PUT UP BY THE ASSESSEE IS THUS ACCEPTED. 9. HE CLEARLY MENTIONS THAT ALL THE CONDITIONS FOR CLAIMING DEDUCTION UNDER SECTION 80HHC ARE FULFILLED. IN THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT A ND AS REPRODUCED ABOVE, THERE IS NO ALLEGATION THAT THERE IS ANY OMI SSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY OR FULLY ANY MATERIAL FACT NECESSARY FOR ASSESSMENT. THE ASSESSING OFFICER HAS ONLY REF ERRED TO CERTAIN DEFICIENCIES MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT YEAR 2003-2004 SUCH AS THERE IS NO AGREEMENT WITH THE FO REIGN CLIENT SO THAT 6 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) TERMS AND CONDITIONS OF THE CONTRACT CANNOT BE ASCE RTAINED, ASSESSEE DOES NOT HAVE ANY TECHNICAL KNOWLEDGE OR ANY INFRASTRUCT URE, THE PERSONS WHO WERE HIRED TO DO THE JOB DID NOT HAVE ANY KNOWLEDGE OF SOFTWARE PROGRAMMING ETC. FIRSTLY, FOR THE PURPOSE OF CLAIM ING DEDUCTION UNDER SECTION 80HHE, ABOVE DEFICIENCIES ARE NOT RELEVANT. THE NECESSARY CONDITIONS FOR CLAIMING DEDUCTION UNDER SECTION 80H HE ARE AS UNDER: 1. ASSESSEE SHOULD BE ENGAGED IN THE BUSINESS OF EX PORT OUT OF INDIA OF COMPUTER SOFTWARE OR ITS TRANSMISSION FROM INDIA TO A PLACE OUTSIDE INDIA BY ANY MEANS OR, IS ENGAGED IN THE BU SINESS OF PROVIDING TECHNICAL SERVICES OUTSIDE INDIA IN CONNE CTION WITH THE DEVELOPMENT OR PRODUCTION OF COMPUTER SOFTWARE. 2. THIS DEDUCTION WILL ALSO BE ADMISSIBLE TO AN ASS ESSEE WHO IS A SUPPORTING SOFTWARE DEVELOPER. 3. CONSIDERATION IN RESPECT OF COMPUTER SOFTWARE SH OULD BE BROUGHT INTO INDIA BY THE ASSESSEE IN CONVERTIBLE FOREIGN E XCHANGE. 4. ASSESSEE SHOULD FURNISH IN THE PRESCRIBED FORM, ALONG WITH RETURN OF INCOME A REPORT OF ACCOUNTANT AS DEFINED UNDER SECTION 288(2). 5. WHERE DEDUCTION IS ALLOWED UNDER SECTION 80HHE O N CERTAIN PROFITS, THEN NO FURTHER DEDUCTION SHALL BE ALLOWED ON SUCH PROFITS UNDER ANY PROVISION OF THE ACT FOR ANY ASSESSMENT YEAR. THUS, THE CONDITIONS PRESCRIBED UNDER SECTION 80HHE CLEARLY SHOW THAT THIS DEDUCTION WOULD BE AVAILABLE TO AN ASSESSEE BE ING AN INDIAN COMPANY OR A RESIDENT PERSON IN INDIA IF IT IS EXPORTING CO MPUTER SOFTWARE OUT OF INDIA OR TRANSMITTING IT FROM INDIA TO OUTSIDE INDI A BY ANY MEANS. IT IS REALLY NOT NECESSARY THAT SUCH SOFTWARE SHOULD NECE SSARILY BE DEVELOPED BY THE ASSESSEE ITSELF. BECAUSE FOR AN ASSESSEE WH O IS DEVELOPING SOFTWARE, BUT NOT EXPORTING IT, BUT SELLING IT TO E XPORT HOUSE, THE DEDUCTION UNDER SECTION 80 HHE IS PROVIDED UNDER SUB SECTION 1A. FOR 7 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) UNDERSTANDING THE DIFFERENCE WE REPRODUCE SUB SECTI ONS 1, 2 AND SUB SECTION 1A OF SECTION 80HHE AS UNDER: 80HHE 80HHE. DEDUCTION IN RESPECT OF PROFITS FROM EXPORT OF COMPUTER SOFTWARE, ETC.--(1) WHERE AN ASSESSEE, BEING AN IND IAN COMPANY OR A PERSON (OTHER THAN A COMPANY) RESIDENT IN INDIA, IS ENGAGED IN THE BUSINESS OF,-- (I) EXPORT OUT OF INDIA OF COMPUTER SOFTWARE OR IT S TRANSMISSION FROM INDIA TO A PLACE OUTSIDE INDIA BY ANY MEANS ; (II) PROVIDING TECHNICAL SERVICES OUTSIDE INDIA IN CONNECTION WITH THE DEVELOPMENT OR PRODUCTION OF COMPUTER SOFT WARE, THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS OF THIS SECTION, BE ALLOWED, IN COMPUTING THE TOTAL INCOME OF THE ASSESSEE, A DEDUCTION OF THE PROFITS DERIVED BY THE ASSESSEE FROM SUCH BUSINESS: +PROVIDED THAT IF THE ASSESSEE, BEING A COMPANY ENG AGED IN THE EXPORT OUT OF INDIA OF COMPUTER SOFTWARE ISSUES A C ERTIFICATE REFERRED TO IN CLAUSE (B) OF SUB-SECTION (4A), THAT IN RESPECT OF THE AMOUNT OF THE EXPORT SPECIFIED THEREIN, THE DEDUCTI ON UNDER THIS SUB-SECTION IS TO BE ALLOWED TO A SUPPORTING SOFTWA RE DEVELOPER, THEN THE AMOUNT OF DEDUCTION IN THE CASE OF AN ASSE SSEE SHALL BE REDUCED BY SUCH AMOUNT WHICH BEARS TO THE TOTAL PRO FITS DERIVED BY THE ASSESSEE FROM THE EXPORT, THE SAME PROPORTION A S THE AMOUNT OF THE EXPORT TURNOVER SPECIFIED IN SUCH CERTIFICATE B EARS TO THE TOTAL EXPORT TURNOVER OF THE ASSESSEE. +(1A) WHERE THE ASSESSEE, BEING A SUPPORTING SOFTWA RE DEVELOPER, HAS DURING THE PREVIOUS YEAR, DEVELOPED AND SOLD CO MPUTER SOFTWARE TO AN EXPORTING COMPANY IN RESPECT OF WHIC H THE SAID COMPANY HAS ISSUED A CERTIFICATE UNDER THE PROVISO TO SUB-SECTION (1), THERE SHALL, IN ACCORDANCE WITH AND SUBJECT TO THE PROVISIONS THIS SECTION, BE ALLOWED IN COMPUTING THE TOTAL INC OME OF THE ASSESSEE A DEDUCTION OF THE PROFITS DERIVED BY THE ASSESSEE FROM THE DEVELOPING AND SELLING OF COMPUTER SOFTWARE TO THE EXPORTING COMPANY IN RESPECT OF WHICH THE CERTIFICATE HAS BEE N ISSUED BY THE SAID COMPANY. 8 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) (2) THE DEDUCTION SPECIFIED IN SUB-SECTION (1) SHAL L BE ALLOWED ONLY IF THE CONSIDERATION IN RESPECT OF THE COMPUTER SOF TWARE REFERRED TO IN THAT SUB-SECTION IS RECEIVED IN, OR BROUGHT INTO , INDIA BY THE ASSESSEE IN CONVERTIBLE FOREIGN EXCHANGE, WITHIN A PERIOD OF SIX MONTHS FROM THE END OF THE PREVIOUS YEAR OR, ~WITHI N SUCH FURTHER PERIOD AS THE COMPETENT AUTHORITY MAY ALLOW IN THIS BEHALF. 10. THEREFORE, THE DEFICIENCIES MENTIONED BY THE AS SESSING OFFICER IN REASONS RECORDED ARE NOT THE ESSENTIAL CONDITIONS R EQUIRED FOR CLAIMING DEDUCTION UNDER SECTION 80HHE. FURTHER CLAUSE-1 OF SUB CLAUSE-1 OF SECTION 80HHE CLEARLY PROVIDES DEDUCTION TO A PERSO N RESIDENT IN INDIA IF IT IS TRANSMITTING A COMPUTER SOFTWARE FROM INDIA T O A PLACE OUTSIDE INDIA BY ANY MEANS, AS OBSERVED BY US ABOVE. IT IS UNDISP UTED FACT THAT THE ASSESSEE HAS TRANSMITTED SOFTWARE TO UNIVERSITY OF CALIFORNIA FROM WHOM THE ASSESSEE HAS RECEIVED CONVERTIBLE FOREIGN EXCHA NGE WHICH IS CERTIFIED BY NATIONALIZED BANK I.E. STATE BANK OF INDIA. NO FAULT IS FOUND WITH THIS CERTIFICATE. THERE IS NO EVIDENCE ON RECORD T O SAY THAT ASSESSEE HAS NOT EXPORTED OR TRANSMITTED ANY SOFTWARE OR THAT SA LE PROCEEDS ARE IN ANY WAY ASSESSEES OWN MONEY WHICH IS ROUTED THROUGH UN IVERSITY OF CALIFORNIA BACK TO THE ASSESSEE. IN ABSENCE OF ANY CONTRARY MATERIAL ON RECORD IT IS NOT POSSIBLE TO DOUBT THE TRANSMISSION OF SOFTWARE AND RECEIPT OF CONVERTIBLE FOREIGN EXCHANGE BY THE ASSESSEE FRO M UNIVERSITY OF CALIFORNIA. THEREFORE ESSENTIAL CONDITION AS PROVI DED UNDER CLAUSE 1 OF SUB SECTION 1 IS SATISFIED FOR CLAIMING DEDUCTION U NDER SECTION 80HHE. 11. IN ANY WAY, ASSESSING OFFICER WAS ALREADY SATIS FIED IN THE ORIGINAL ASSESSMENT PROCEEDINGS THAT ALL THE CONDITIONS FOR CLAIMING DEDUCTION UNDER SECTION 80 HHE ARE FULFILLED. THEREFORE, SUB SEQUENT ALLEGED BELIEF FOR REOPENING OF THE ASSESSMENT IS ONLY A CHANGE OF OPINION WHICH IS BASED ON THE VIEW EXPRESSED BY LD. COMMISSIONER OF INCOME TAX(APPEALS) WHILE DISPOSING OF APPELLATE ORDER FOR THE ASSESSMENT YEAR 2003-2004. THIS ASPECT OF THE MATTER IS SQUARELY C OVERED BY THE DECISION 9 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF AUSTIN ENGINEERING COMPANY LIMITED (SUPRA) HON'BLE GUJARAT HIGH COURT OBSERVED AS UNDER: AUSTIN ENGINEERING CO. LTD. VS. JOINT COMMISSIONER OF INCOME-TAX IN FACT, THE LAW, AS IT THEN STOOD WAS UNDERSTOOD IDENTICALLY BOTH BY THE ASSESSEE AND THE ASSESSING OFFICER. MERELY BEC AUSE SUBSEQUENTLY THE APEX COURT PRONOUNCED THE LAW TO B E OTHERWISE, ON THE DATE OF THE FILING OF THE RETURN OF THE INCO ME WHEN THE ASSESSEE MADE A CLAIM FOR DEDUCTION, THE CLAIM COUL D NOT BE TERMED TO BE EITHER LACKING IN MATERIAL PARTICULARS OR CO ULD NOT BE TERMED TO BE UNTRUE. IN OTHER WORDS, ALL THE MATERIAL FAC TS WERE FULLY DISCLOSED AND NO FALSE FACTS WERE STATED IN SUPPOR T OF THE CLAIM MADE. THE REASONS RECORDED THEMSELVES SHOW THAT TH E ASSESSING OFFICER HAS CHANGED HIS OPINION ONLY ON THE BASIS OF SUBSEQUENT JUDGMENT RENDERED BY THE APEX COURT. THUS, THIS IS A CASE OF CHANGE OF OPINION BY THE ASSESSING OFFICER AND NOT A CASE OF ANY FAILURE ON THE PART OF THE ASSESSEE. 12. SEVERAL OTHER AUTHORITIES SUCH AS GUJARAT HIGH COURT IN HYNOP FOOD AND OIL INDUSTRIES LTD. VS. CIT (2008) 30 ITR 115 (GUJARAT) HAVE HELD THAT ONCE DEDUCTION UNDER SECTION 80HH AND 80I ARE GRANTED AFTER CONSIDERING MATERIAL AVAILABLE RECORD, THEN SUBSEQU ENT NOTICE ISSUED TO WITHDRAW SAID DEDUCTION WOULD NOT BE VALID. ONCE T HERE WAS NO OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ANY MATERIAL FACT, FULLY AND TRULY, THEN SUBSEQUENT REOPENING WOULD ONLY BE A CHANGE OF OPINION WHICH COULD NOT EMPOWER THE ASSESSING OFFICER TO IS SUE NOTICE UNDER SECTION 148 OF THE ACT BEYOND THE PERIOD OF 4 YEARS . HON'BLE MADRAS HIGH COURT IN ESTERLIGHT INDIA LIMITED VS. ACIT 200 8 305 ITR 339 (MADRAS) HAS HELD THAT WHERE THERE IS NO MATERIAL T O SHOW HOW INCOME IS ESCAPED ASSESSMENT, OR HOW THERE IS ANY OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS NECESSARY FOR ASSESSMENT FOR THAT YEAR, THE ASSESSING OFFICER WIL L NOT HAVE JURISDICTION TO ISSUE NOTICE UNDER SECTION 148. HON'BLE GUJARAT HIGH COURT IN VIKAS PRINTARY VS. ASSISTANT DIRECTOR 270 ITR 368 (GUJARA T) HELD THAT WHERE 10 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) THERE IS NO MATERIAL WITH THE ASSESSING OFFICER TO COME TO THE CONCLUSION THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT IN RESPECT OF ASSESSMENT YEAR SOUGHT TO BE REOPENED AFTER EXPIRIN G OF 4 YEARS, IT WOULD BE A CASE OF CHANGE OF OPINION ONLY. 13. IF WE EXCLUDE THE ALLEGED ESCAPEMENT OF INCOME ON ACCOUNT OF DEDUCTION UNDER SECTION 80HHE WOULD SURVIVES IN THE REASONS RECORDED ARE THE ESCAPEMENT OF THE INCOME OF RS. 1438+808+69 828/- TOTALING TO RS.72,074/-. THE NOTICE UNDER SECTION 148 IS PROHI BITED FROM BEING ISSUED BY VIRTUE OF CLAUSE-B OF SUB SECTION 1 OF SE CTION 149 AS FOR REOPENING OF THE ASSESSMENT BETWEEN 4 YEARS AND 6 Y EARS FROM THE END OF RELEVANT ASSESSMENT YEAR AMOUNT OF INCOME CHARGEABL E TO TAX WHICH IS ALLEGED TO ESCAPE ASSESSMENT SHOULD BE RS. 1,00,000 /- OR MORE FOR THAT YEAR. ACCORDINGLY, ASSESSING OFFICER DOES NOT GET JURISDICTION TO ISSUE NOTICE UNDER SECTION 148(1) ON THE RESIDUARY ISSUES ALSO. 14. ACCORDINGLY, WE HOLD THAT REOPENING OF THE ASSE SSMENT WAS BAD IN LAW AND CANNOT BE SUSTAINED. EVEN ON MERIT THERE I S NO CASE FOR MAKING ADDITION AS OBSERVED BY US ABOVE. ACCORDINGLY, THE ASSESSMENT SO FRAMED BY THE ASSESSING OFFICER IS CANCELLED. 15. THE APPEAL FILED BY THE ASSESSEE, IS THEREFORE ALLOWED. THIS ORDER IS PRONOUNCED IN OPEN COURT ON DATED 16 TH OCTOBER, 2009. SD/- SD/- (R.V. EASWAR) (D.C. AGRAWAL) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD; DATED: 16/10/2009 ANKIT* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 11 ITA NO.2279/AHD/2009 (ASSESSMENT YEAR 2001-2002) 2. THE RESPONDENT 3. THE CIT(A) CONCERNED 4. THE CIT, 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, ASSTT. REGISTRAR/ DEPUTY REGISTRAR ITAT, AHMEDABAD BENCHES, AHMEDABAD.