ACIT, Jaipur V. RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., Jaipur

ITA 334/JPR/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 2155 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 07-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VARINDER MEHTA
• Assessee Lawyers: P C PARWALCA
• Keywords: Reopening of assessment; Depreciation; Additional depreciation; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 334/JP/2016 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 THE ACIT, CIRCLE- 6, JAIPUR. CUKE VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., UDHYOG BHAWAN, TILAK NAGAR, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCR4695J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT CO NO. 4/JP/2016 (ARISING OUT OF ITA NO. 334/JP/2016) FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2007-08 M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., UDHYOG BHAWAN, TILAK NAGAR, JAIPUR. CUKE VS. THE ACIT, CIRCLE- 6, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AABCR4695J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI P.C. PARWAL(C.A.) JKTLO DH VKSJ LS @ REVENUE BY : SHRI VARINDER MEHTA (CIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 07/12/2017 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 09/02/2018 VKNS'K@ ORDER ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 2 PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE REVENUE AND CROSS OBJECTION BY THE ASSESSEE ARE DIRECTED AGAINST THE ORDER DATED 25.01.2016 OF LD. CIT(A), JAIPUR FOR THE ASSESSMENT YEAR 2007-08. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS:- 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN ALLOWING DEDUCT ION OF RS. 11,52,52,892/- ON INTEREST INCOME (INCLUDING PENAL INTEREST INCOME RS. 11,40,17,559/- AND OTHER INCOME OF RS. 1 2,35,333/- 2. THE APPELLANT CRAVES ITS RIGHTS TO ADD, AMEND OR ALTER ANY OF THE GROUNDS ON OR BEFORE THE HEARING. 2. THE ASSESSEE IN THE CROSS OBJECTION HAS RAISED THE FOLLOWING GROUNDS:- 1 THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN UPHOLDING THE VALIDITY OF ORDER PASSED U/S 147 OF THE IT ACT, 1961. 2. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED ON FACTS AND IN LAW IN NOT ALLOWING THE DEDUCTION U/S 80IA ON OTHER MISCELLANEOUS INCOME OF RS. 26,02,007/-. 3. THE ASSESSEE CARVES RIGHT TO ADD, ALTER, AMEND, AND MODIFY ANY OF THE GROUND OF APPEAL. 4. NECESSARY COST BE ALLOWED TO THE ASSESSEE. ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 3 SINCE, THE ASSESSEE HAS RAISED A LEGAL ISSUE REGARD ING THE VALIDITY OF REOPENING WHICH GOES TO THE ROOD OF THE MATTER, THE REFORE, FIRST WE TAKE UP GROUND NO. 1 OF THE CROSS OBJECTION OF THE ASSE SSEE. 3. THE ASSESSEE FILED ITS RETURN OF INCOME IN THE Y EAR UNDER CONSIDERATION ON 22.10.2007 DECLARING INCOME OF RS. 26,67,24,890/- AFTER CLAIMING HIS DEDUCTION U/S 80IA (4) (III) OF THE ACT OF RS. 56,84,24,379/-. THE AO COMPLETED THE SCRUTINY ASSES SMENT U/S 143(3) OF THE ACT VIDE ORDER DATED 24.12.2009 WHEREBY THE AO ALLOWED THE DEDUCTION U/S 80IA OF THE ACT AND ASSESSED THE TOTA L INCOME OF THE ASSESSEE AT RS. 29,91,67,100/-. THEREAFTER THE AO I SSUE A NOTICE U/S 148 OF THE ACT ON 23.03.2012 WHEREBY PROPOSED TO DI SALLOWANCE THE EXPENDITURE OF RS. 1,28,37,888/- INCURRED ON MAINTE NANCE OF TRANSFERRED AREA. THE REASSESSMENT U/S 143(3) R.W.S . 147 WAS COMPLETED ON 01.03.2013. THE ASSESSING OFFICER AGAI N ISSUED A NOTICE U/S 148 DATED 25.03.2014 ON THE GROUND THAT ASSESSE E CLAIMED DEDUCTION U/S 80IA ON OTHER INCOME NOT CONNECTED WI TH THE ELIGIBLE BUSINESS OF DEVELOPING, MAINTAINING AND OPERATING I NDUSTRIAL PARKS AS A RESULT OF WHICH THE ASSESSEE WAS ALLOWED EXCESS DED UCTION U/S 80IA OF RS. 11,78,54,899/-. THE ASSESSEE RAISED THE OBJECTI ONS AGAINST THE NOTICE ISSUED U/S 148 VIDE LETTER DATED 11.06.2014 HOWEVER, THE AO ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 4 REJECTED THE OBJECTION RAISED BY THE ASSESSEE VIDE ORDER DATED 14.11.2014. THE AO COMPLETED THE SECOND REASSESSMEN T U/S 143(3) R.W.S. 147 VIDE ORDER DATED 31.12.2014 WHEREBY THE AO DISALLOWED THE DEDUCTION U/S 80IA ON INTEREST INCOME INCLUDING PEN AL INTEREST AND OTHER INCOME ITEMS. THE ASSESSEE CHALLENGED THE ACT ION OF THE AO BEFORE THE LD. CIT(A) AND ALSO RAISED THE OBJECTS A GAINST THE VALIDITY OF REOPENING HOWEVER, THE LD. CIT(A) REJECTED THE OBJE CTIONS RAISED BY THE ASSESSEE AGAINST THE VALIDITY OF THE REOPENING. THE LD. CIT(A) ALLOWED PART RELIEF TO THE ASSESSEE AND SUSTAINED THE DISAL LOWANCE OF DEDUCTION U/S 80IA OF THE ACT IN RESPECT OF PENAL INTEREST AN D OTHER INCOME. THUS, BOTH REVENUE AS WELL AS ASSESSEE ARE AGGRIEVED BY T HE IMPUGNED ORDER OF LD. CIT(A) AND FILED THE APPEAL AND CROSS OBJECT ION BEFORE THIS TRIBUNAL. 4. BEFORE US, THE LD. AR OF THE ASSESSEE HAS SUBMIT TED THAT IN COURSE OF ORIGINAL ASSESSMENT PROCEEDING, ASSESSEE FILED T HE AUDIT REPORT U/S 80IA OF THE ACT ALONG WITH THE BALANCE SHEET AND PR OFIT & LOSS ACCOUNTS OF VARIOUS INDUSTRIAL PARKS ELIGIBLE FOR DEDUCTION U/S 80IA AND NOTIFICATION ISSUED UNDER THIS ACT. THE LD. AR HAS SUBMITTED THAT IN THE INCOME & EXPENDITURE THE INTEREST INCOME INCLUDING PENAL INTEREST AND OTHER INCOME ARE SEPARATELY MENTIONED. THEREFORE, I T IS INCORRECT ON THE ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 5 PART OF THE LOWER AUTHORITIES TO HELD THAT ASSESSEE HAS NOT DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR IT S ASSESSMENT. IN FACT THE AO AFTER CONSIDERING THE SAME HAS ALLOWED THE DEDUC TION U/S 80IA WHILE PASSING THE ORIGINAL ASSESSMENT U/S 143(3) DATED 24 .02.2009. HE HAS FURTHER SUBMITTED THAT THE REOPENING IS BASED ON CH ANGE OF OPINION AND WHEN THERE ARE TWO VIEWS POSSIBLE ON THE ALLOWABILI TY OF DEDUCTION U/S 80IA IN RESPECT OF INTEREST INCOME ON LATE PAYMENT BY THE ALLOTTEES THEN, THE REOPENING IS BAD IN LAW. IN SUPPORT OF HI S CONTENTION HE HAS RELIED UPON THE DECISION OF HONBLE JURISDICTION HI GH COURT IN CASE OF CIT VS. HINDUSTAN ZINC LTD. 241 TAXMAN 392 AND SUBMITTED THAT THE HONBLE HIGHT COURT HAS HELD THAT FORMATION OF BELIEF BY THE AO REGARDING ESCAPED INCOME WAS BASED ON RE-APPRECIATI ON OF MATERIAL ALREADY AVAILABLE ON RECORD AT THE TIME OF SCRUTINY ASSESSMENT WHICH AMOUNTED TO MERE CHANGE OF OPINION. REOPENING OF CO MPLETED ASSESSMENT WITHOUT ANY FRESH MATERIAL, MERELY ON BA SIS OF CHANGE OF OPINION OF THE AO WAS WITHOUT JURISDICTION AND PATE NTLY ILLEGAL. THE LD. AR HAS THEN RELIED UPON THE DECISION OF HONBLE DEL HI HIGH COURT IN CASE OF PR. CIT VS. TUPPERWARE INDIA PVT. LTD. 127 DTR 161 AS WELL AS DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. KELVINATOR OF INDIAN LTD. 320 ITR 561 AND SUBMITTED THAT WHEN THERE WAS NO ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 6 MATERIAL WITH THE AO SO AS TO CONSTITUTE THE REASON TO BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT THEN, REOPENING IS NO T VALID. THE LD. AR HAS SUBMITTED THAT THE LD. CIT(A) HAS RELIED UPON T HE DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF ELEGANZA JEWELLERY LTD. VS. CIT 364 ITR 132 HOWEVER, THIS DECISION IS DISTINGUISHABLE ON THE F ACT IN AS MUCH AS IN THE CASE OF THE ASSESSEE THERE HAS BEEN FULL AND TRUE DISCLOSER OF ALL RELEVANT MATERIAL NECESSARY FOR AS SESSMENT. THUS, THE LD. AR HAS SUBMITTED THAT THE REOPENING OF THE ASSESSME NT IS BAD IN LAW AND CONSEQUENTLY THE REASSESSMENT MADE BY THE AO IS LIABLE TO BE QUASHED. 5. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT FUR NISHED THE AUDIT REPORT AND BOOKS OF ACCOUNTS WOULD NOT CONSTITUTE D ISCLOSER OF RELEVANT FACTS FULLY AND TRULY. HE HAS REFERRED TO THE EXPLA NATION-1 TO SECTION 147 OF THE ACT AND SUBMITTED THAT PRODUCTION OF BOOKS O F ACCOUNT OR OTHER EVIDENCE FROM WHICH THE MATERIAL EVIDENCE COULD WIT H DUE DILIGENCE HAS BEEN DISCOVERED BY THE AO WILL NOT AMOUNT TO DISCL OSER WITHIN THE MEANING OF PROVISO TO SECTION 147 OF THE ACT. HE HA S FURTHER SUBMITTED THAT AS PER THE EXPLANATION 2 EXCESSIVE ALLOWANCE U NDER THE ACT IS ALSO DEEM TO BE INCOME CHARGEABLE TAX HAS ESCAPED ASSESS MENT. HE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 7 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THE OR IGINAL ASSESSMENT WAS COMPLETED U/S 143(3) ON 24.12.2009 AND THEREAFTER T HE AO REOPEN THE ASSESSMENT AND COMPLETED THE REASSESSMENT U/S 143(3 ) R.W.S. 147 OF THE ACT ON 01.03.2013. FURTHER, THE AO ISSUED A NOT ICED U/S 148 ON 25.03.2014 PROPOSED TO DISALLOW THE CLAIM OF DEDUCT ION U/S 80IA ON INTEREST AND OTHER INCOMES. THUS, IT IS CLEAR THAT AFTER COMPLETING THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT AS WELL A S REASSESSMENT U/S 147 OF THE ACT, THE AO HAS MADE SECOND ATTEMPT TO A SSESS THE INCOME WHICH HAS ESCAPED ASSESSMENT. THE REASONS FOR REOPE NING OF THE ASSESSMENT HAS BEEN RECORDED BY THE AO CONTAINED TH E DETAILS OF INTEREST INCOME AND OTHER INCOME WHICH IN THE OPINI ON OF THE AO ARE NOT ELIGIBLE FOR DEDUCTION U/S 80IA OF THE ACT IN V IEW OF THE VARIOUS DECISIONS INCLUDING THE DECISION OF HONBLE SUPREME COURT IN CASE OF LIBERTY INDIA VS. CIT 317 ITR 218. IT IS PERTINENT TO NOTE THAT IN THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT TH E ASSESSING OFFICER HAS NOT STATED THAT ANY NEW MATERIAL OR INFORMATION CAME TO HIS KNOWLEDGE AFTER COMPLETION OF ASSESSMENT U/S 143(3) ON 24.12.2009 OR AFTER COMPLETION OF THE ASSESSMENT U/S 143(3) R.W.W . 147 ON 01.03.2013. THE AO HAS TAKEN ALL DETAILS FROM THE A SSESSMENT RECORD ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 8 AND EVEN THE DECISION AS REFERRED BY THE AO IN THE REASONS RECORDED FOR REOPENING ARE PRIOR TO THE ASSESSMENT FRAMED U/S 14 3(3) ON 24.12.2009. THEREFORE, THERE IS NO DISPUTE THAT THE AO HAS PROPOSED TO REOPEN THE ASSESSMENT BY RE-APPRECIATING AND RE-EVA LUATING THE MATERIAL ALREADY AVAILABLE ON ASSESSMENT RECORD. NE ITHER THERE WAS ANY CHANGE IN THE MATERIAL AVAILABLE WITH THE AO OR ANY OTHER INFORMATION RECEIVED THEREAFTER NOR ANY CHANGE IN THE JUDICIAL AUTHORITY ON THE POINT AFTER COMPLETION OF ASSESSMENT U/S 143(3) OF THE AC T. THERE IS NO QUARREL THAT MERE PRODUCTION OF BOOKS OF ACCOUNT WO ULD NOT NECESSARILY BE AMOUNT TO DISCLOSER OF FULLY AND TRULY ALL THE F ACTS NECESSARY FOR ASSESSMENT. HOWEVER, IN THE CASE IN HAND THE ASSESS EE HAS CLAIMED THE DEDUCTION U/S 80IA AND AS PER THE DETAILS OF INCOME IN THE INCOME AND EXPENDITURE ACCOUNT AS WELL AS IN THE AUDIT REPORT FILED BY THE ASSESSEE, IT IS CLEAR THAT THE ASSESSEE HAS GIVEN THE INCOMES UNDER SEPARATE HEADS MAKING IT OBVIOUS AND APPARENT THE NATURE OF INCOME AND ITEMS OF INCOME. FURTHER, THE ASSESSING OFFICER EVEN DID NOT DISTURB THE ORIGINAL ORDER OF ALLOWING DEDUCTION U/S 80IA WHILE CONSIDERING THE FIRST REASSESSMENT U/S 143(3) R.W.S. 147 ON 01.03.2013. I T IS NOT THE CASE OF THE DEPARTMENT THAT NITTY-GRITTY OF THE NATURE OF I NCOME ON WHICH THE ASSESSEE CLAIMED OF DEDUCTION U/S 80IA OF THE ACT C OULD HAVE BEEN ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 9 ASCERTAINED BY THE AO ONLY AFTER APPLYING DUE DILIG ENCE BUT ALL THE DETAILS WERE AVAILABLE IN PLAIN AND SIMPLE FORM UND ER SEPARATE HEADS AND ITEMS OF INCOME IN THE INCOME AND EXPENDITURE A CCOUNT FILED BY THE ASSESSEE. SINCE, THE ASSESSING OFFICER HAS FORMED I TS BELIEF ON THE BASIS OF THE MATERIAL AVAILABLE ON RECORD WITHOUT ANY FRE SH EVIDENCE OR MATERIAL CAME TO THE KNOWLEDGE OF THE ASSESSING OFF ICER, THE OPINION FORM BY THE AO ON THE BASIS OF THE RE-APPRECIATION OF MATERIAL ALREADY AVAILABLE ON RECORD IS NOTHING BUT MERE CHANGE OF O PINION. THE HONBLE JURISDICTION HIGH COURT IN CASE OF CIT VS. HINDUSTA N ZINZ LTD.(SUPRA) WHILE CONSIDERING AN IDENTICAL ISSUE AS HELD IN PAR AS 4 TO 12 AS UNDER:- 4. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNED COUNSEL FOR THE REVENUE AND PERUSED THE MATERIAL ON RECORD. 5. INDISPUTABLY, AS PER THE PROVISION OF SECTION 147 OF THE ACT, THE ASSESSING OFFICER IS EMPOWERED TO INITIATE THE RE- ASSESSMENT PROCEEDINGS IF ANY INCOME OF THE ASSESSEE CHARGEABL E TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR. BUT THE N, BEFORE INITIATING THE RE-ASSESSMENT PROCEEDINGS, THE AO HA S TO RECORD THE REASONS IN TERMS OF SUB-SECTION (2) OF SECTION 148, FOR FORMATION OF THE BELIEF THAT ANY INCOME OF THE ASSE SSEE CHARGEABLE TO TAX FOR THE RELEVANT ASSESSMENT YEAR HAS ESCAPED ASSESSMENT. AS LAID DOWN BY THE HON'BLE SUPREME COU RT, THE BELIEF ENTERTAINED BY THE ASSESSING OFFICER MUST NO T BE ARBITRARY OR IRRATIONAL, IT MUST BE REASONABLE AND BASED ON M ATERIAL ON RECORD. THE ASSUMPTION OF JURISDICTION BY THE ASSES SING OFFICER UNDER THE PROVISIONS OF THE ACT PRE-SUPPOSES DUE AP PLICATION OF MIND BY THE ASSESSING OFFICER ON THE MATERIAL ON RE CORD AND ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 10 FORMATION OF THE BELIEF BY THE ASSESSING OFFICER TH AT THE INCOME HAS ESCAPED ASSESSMENT CANNOT BE BASED ON WHIMS AND FANCY, THERE MUST EXISTS RATIONAL AND INTELLIGIBLE NEXUS B ETWEEN THE REASONS AND THE BELIEF. 6. IN THE MATTER OF CALCUTTA DISCOUNT CO. LTD. V. ITO [1961] 41 ITR 191 (SC) , THE HON'BLE SUPREME COURT WHILE DEALING WITH THE AMBIT AND SCOPE OF THE PROVISIONS OF SECTION 34 OF THE INDIAN INCOME TAX, 1922, WHICH WERE SIMILAR TO THE PROVISI ONS OF SECTION 147 OF THE ACT OF 1961 EXPLAINED THE PURPORTS OF SE CTION 34, AS UNDER: 'TO CONFER JURISDICTION UNDER THIS SECTION TO ISSUE NOTICE IN RESPECT OF ASSESSMENTS BEYOND THE PERIOD OF FOUR YEARS, BUT WITHIN A PERIOD OF EIGHT YEARS, FROM THE END OF THE RELEVANT YEAR TWO CONDITIONS HAVE THEREFORE TO BE SATISFIED. THE FIRS T IS THAT THE INCOME-TAX OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME, PROFITS OR GAINS CHARGEABLE TO INCOME-TAX HAVE BEEN UNDER- ASSESSED. THE SECOND IS THAT HE MUST HAVE ALSO REAS ON TO BELIEVE THAT SUCH 'UNDER-ASSESSMENT', HAS OCCURRED BY REASO N OF EITHER (I) OMISSION OR FAILURE ON THE PART OF AN ASSESSEE TO MAKE A RETURN OF HIS INCOME UNDER SECTION 22, OR (II) OMISSION OR FAILURE ON THE PART OF AN ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT YEAR. BOTH TH ESE CONDITIONS ARE CONDITIONS PRECEDENT TO BE SATISFIED BEFORE THE INCOME-TAX OFFICER COULD HAVE JURISDICTION TO ISSUE A NOTICE F OR THE ASSESSMENT OR REASSESSMENT BEYOND THE PERIOD OF FOU R YEARS, BUT WITHIN THE PERIOD OF EIGHT YEARS, FROM THE END OF T HE YEAR IN QUESTION.' THE HON'BLE SUPREME COURT FURTHER OBSERVED THAT IT IS DUTY OF EVERY ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATE RIAL FACTS NECESSARY FOR HIS ASSESSMENT. BUT, HIS DUTY DOES NO T EXTEND BEYOND THIS. THE HON'BLE SUPREME COURT OPINED THAT ONCE ALL PRIMARY FACTS ARE BEFORE THE ASSESSING AUTHORITY, H E REQUIRES NO FURTHER ASSISTANCE BY WAY OF DISCLOSURE . IT IS FOR HIM TO DECIDE ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 11 WHAT INFERENCES OF FACTS CAN BE REASONABLY DRAWN AN D WHAT LEGAL INFERENCES HAVE ULTIMATELY TO BE DRAWN. 7. IN THE MATTER OF S. NARAYANAPPA AND OTHERS V. COMM ISSIONER OF INCOME TAX, BANGALORE [1967] 63 ITR 219 , THE HON'BLE SUPREME COURT WHILE RELYING UPON THE DECISION IN TH E MATTER OF CALCUTTA DISCOUNT CO. LTD. (SUPRA), HAS OBSERVED AS UNDER : 'BUT THE LEGAL POSITION IS THAT IF THERE ARE IN FAC T SOME REASONABLE GROUNDS FOR THE INCOME-TAX OFFICER TO BELIEVE THAT THERE HAD BEEN ANY NON-DISCLOSURE AS REGARDS ANY FACT, WHICH COULD HAVE A MATERIAL BARING ON THE QUESTION OF UNDER-ASSESSMENT , THAT WOULD BE SUFFICIENT TO GIVE JURISDICTION TO THE INCOME TA X OFFICER TO ISSUE THE NOTICE UNDER SECTION 34. WHETHER THESE GROUNDS ARE ADEQUATE OR NOT IS NOT A MATTER FOR THE COURT TO INVESTIGATE . IN OTHER WORDS, THE SUFFICIENCY OF THE GROUNDS WHICH INDUCED THE IN COME-TAX OFFICER TO ACT IS NOT A JUSTICIABLE ISSUE. IT IS OF COURSE OPEN FOR THE ASSESSEE TO CONTEND THAT THE INCOME-TAX OFFICER DID NOT HOLD THE BELIEF THAT THERE HAD BEEN SUCH NON-DISCLOSURE. IN OTHER WORDS, THE EXISTENCE OF THE BELIEF CAN BE CHALLENGED BY TH E ASSESSEE BUT NOT THE SUFFICIENCY OF THE REASONS FOR THE BELIEF. AGAIN THE EXPRESSION 'REASON TO BELIEVE' IN SECTION 34 DOES N OT MEAN A PURELY SUBJECTIVE SATISFACTION ON THE PART OF THE I NCOME-TAX OFFICER. THE BELIEF MUST BE HELD IN GOOD FAITH: IT CANNOT BE MERELY A PRETENCE. TO PUT IT DIFFERENTLY, IT IS OPEN TO TH E COURT TO EXAMINE WHETHER THE REASONS FOR THE BELIEF HAVE A RATIONAL CONNECTION OR A RELEVANT BEARING TO THE FORMATION OF THE BELIEF AND ARE NOT EXTRANEOUS OR IRRELEVANT TO THE PURPOSE OF THE SECT ION. TO THIS LIMITED EXTENT, THE ACTION OF THE INCOME-TAX OFFICE R IN STARTING PROCEEDINGS UNDER SECTION 34 OF THE ACT IS OPEN TO CHALLENGE IN A COURT OF LAW.' (EMPHASIS SUPPLIED) 8. IN THE MATTER OF ITO V. LAKHMANI MEWAL DAS [1976] 103 ITR 437 , THE HON'BLE SUPREME COURT HAS OBSERVED AS UNDER : 'PRODUCTION BEFORE THE INCOME-TAX OFFICER OF THE AC COUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COUL D WITH DUE ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 12 DILIGENCE AMOUNT TO DISCLOSURE CONTEMPLATED BY LAW. THE DUTY OF THE ASSESSEE IN ANY CASE DOES NOT EXTEND BEYOND MAK ING A TRUE AND FULL DISCLOSURE OF PRIMARY FACTS. ONCE HE HAS D ONE THAT HIS DUTY ENDS. IT IS FOR THE INCOME-TAX OFFICER TO DRAW THE CORRECT INFERENCE FROM THE PRIMARY FACTS. IT IS NO RESPONSI BILITY OF THE ASSESSEE TO ADVICE THE INCOME-TAX OFFICER WITH REGA RD TO THE INFERENCE WHICH HE SHOULD DRAW FROM THE PRIMARY FAC TS. IF AN INCOME-TAX OFFICER DRAWS AN INFERENCE WHICH APPEARS SUBSEQUENTLY TO BE ERRONEOUS, MERE CHANGE OF OPINIO N WITH REGARD TO THAT INFERENCE WOULD NOT JUSTIFY INITIATI ON OF ACTION FOR REOPENING ASSESSMENT. THE GROUNDS OR REASONS WHICH LEAD TO THE FORMATION OF THE BELIEF CONTEMPLATED BY SECTION 147 (A) OF THE ACT MUST HAV E A MATERIAL BEARING ON THE QUESTION OF ESCAPEMENT OF INCOME OF THE ASSESSEE FROM ASSESSMENT BECAUSE OF HIS FAILURE OR OMISSION TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. ONCE THERE EXIS T REASONABLE GROUNDS FOR THE INCOME-TAX OFFICER TO FORM THE ABOV E BELIEF, THAT WOULD BE SUFFICIENT TO CLOTHE HIM WITH JURISDICTION TO ISSUE NOTICE. WHETHER THE GROUNDS ARE ADEQUATE OR NOT IS NOT A MA TTER FOR THE COURT TO INVESTIGATE. THE SUFFICIENCY OF THE GROUND S WHICH INDUCE THE INCOME-TAX OFFICER TO ACT IS, THEREFORE, NOT A JUSTICIABLE ISSUE. IT IS, OF COURSE, OPEN TO THE ASSESSEE TO CONTEND T HAT THE INCOME- TAX OFFICER DID NOT HOLD THE BELIEF THAT THERE HAD BEEN SUCH NON- DISCLOSURE. THE EXISTENCE OF THE BELIEF CAN BE CHAL LENGED BY THE ASSESSEE BUT NOT THE SUFFICIENCY OF THE REASONS FOR THE BELIEF. THE EXPRESSION 'REASON TO BELIEVE' DOES NOT MEAN A PURE LY SUBJECTIVE SATISFACTION ON THE PART OF THE INCOME-TAX OFFICER. THE REASON MUST BE HELD IN GOOD FAITH. IT CANNOT BE MERELY A P RETENSE. IT IS OPEN TO THE COURT TO EXAMINE WHETHER THE REASONS FO R THE FORMATION OF THE BELIEF HAVE A RATIONAL CONNECTION WITH OR A RELEVANT BEARING ON THE FORMATION OF THE BELIEF AND ARE NOT EXTRANEOUS OR IRRELEVANT FOR THE PURPOSE OF THE SEC TION. TO THIS LIMITED EXTENT, THE ACTION OF THE INCOME-TAX OFFICE R IN STARTING ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 13 PROCEEDINGS IN RESPECT OF INCOME ESCAPING ASSESSMEN T IS OPEN TO CHALLENGE IN A COURT OF LAW.' THE HON'BLE SUPREME COURT FURTHER OBSERVED : 'AS STATED EARLIER, THE REASONS FOR THE FORMATION O F THE BELIEF MUST HAVE A RATIONAL CONNECTION WITH OR RELEVANT BEARING ON THE FORMATION OF THE BELIEF. RATIONAL CONNECTION POSTUL ATES THAT THERE MUST BE A DIRECT NEXUS OR LIVE LINK BETWEEN THE MAT ERIAL COMING TO THE NOTICE OF THE INCOME -TAX OFFICER AND THE FO RMATION OF HIS BELIEF THAT THERE HAS BEEN ESCAPEMENT OF THE INCOME OF THE ASSESSEE FROM ASSESSMENT IN THE PARTICULAR YEAR BEC AUSE OF HIS FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FA CTS.' (EMPHASIS SUPPLIED) 9. IN THE MATTER OF GANGA SARAN & SONS (P.) LTD. V. I TO [1981] 130 ITR 1/6 TAXMAN 14 (SC) , THE HON'BLE SUPREME COURT HELD AS UNDER: '6. IT IS WELL SETTLED AS A RESULT OF SEVERAL DECIS IONS OF THIS COURT THAT TWO DISTINCT CONDITIONS MUST BE SATISFIED BEFO RE THE INCOME TAX OFFICER CAN ASSUME JURISDICTION TO ISSUE NOTICE UNDER SECTION 147(A). FIRST, HE MUST HAVE REASON TO BELIEVE THAT THE INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT AND SECONDLY, H E MUST HAVE REASON TO BELIEVE THAT SUCH ESCAPEMENT IS BY R EASON OF THE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSE SSMENT. IF EITHER OF THESE CONDITIONS IS NOT FULFILLED, THE NOTICE IS SUED BY THE INCOME TAX OFFICER WOULD BE WITHOUT JURISDICTION. T HE IMPORTANT WORDS UNDER SECTION 147 (A) ARE 'HAS REASON TO BELI EVE' AND THESE WORDS ARE STRONGER THAN THE WORDS ' IS SATISF IED'. THE BELIEF ENTERTAINED BY THE INCOME TAX OFFICER MUST NOT BE A RBITRARY OR IRRATIONAL. IT MUST BE REASONABLE OR IN OTHER WORDS IT MUST BE BASED ON REASONS WHICH ARE RELEVANT AND MATERIAL. T HE COURT, OF COURSE, CANNOT INVESTIGATE INTO THE ADEQUACY OR SUF FICIENCY OF THE REASONS WHICH HAVE WEIGHED WITH THE INCOME TAX OFFI CER IN COMING TO THE BELIEF, BUT THE COURT CAN CERTAINLY E XAMINE WHETHER ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 14 THE REASONS ARE RELEVANT AND HAVE A BEARING ON THE MATTERS IN REGARD TO WHICH HE IS REQUIRED TO ENTERTAIN THE BEL IEF BEFORE HE CAN ISSUE NOTICE UNDER SECTION 147(A). IF THERE IS NO RATIONAL AND INTELLIGIBLE NEXUS BETWEEN THE REASONS AND THE BELI EF, SO THAT, ON SUCH REASONS, NO ONE PROPERLY INSTRUCTED ON FACTS A ND LAW COULD REASONABLY ENTERTAIN THE BELIEF, THE CONCLUSION WOU LD BE INESCAPABLE THAT THE INCOME TAX OFFICER COULD NOT H AVE REASON TO BELIEVE THAT ANY SUCH ESCAPEMENT WAS BY REASON OF T HE ASSESSEE HAD ESCAPED ASSESSMENT AND SUCH ESCAPEMENT WAS BY R EASON OF THE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS AND THE NOTICE I SSUED BY HIM WOULD BE LIABLE TO BE STRUCK DOWN AS INVALID.' (EMP HASIS SUPPLIED) 10. IN THE MATTER OF SRI KRISHNA (P.) LTD. V. ITO [1996] 221 ITR 538/87 TAXMAN 315 , THE HON'BLE SUPREME COURT HAS OBSERVED AS UNDER : 'THE INCOME-TAX OFFICER CAN ISSUE NOTICE UNDER SECT ION 148 OF THE INCOME-TAX ACT,1961, PROPOSING TO REOPEN AN ASSESSM ENT ONLY WHERE HE HAS REASON TO BELIEVE THAT ON ACCOUNT OF E ITHER THE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO FILE THE RETURN OR ON ACCOUNT OF THE OMISSION OR FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR HIS ASSESSMENT FOR THAT YEAR, INCOME HAS ESCAPED ASSESS MENT. THE EXISTENCE OF THE REASON(S) TO BELIEVE IS INTENDED T O BE A CHECK, A LIMITATION, UPON HIS POWER TO REOPEN THE ASSESSMENT . SECTION 148(2) IMPOSES A FURTHER CHECK UPON THE SAID POWER, VIZ., THE REQUIREMENT OF RECORDING OF REASONS FOR SUCH REOPEN ING BY THE INCOME-TAX OFFICER. SECTION 151 IMPOSES YET ANOTHER CHECK UPON THE SAID POWER, VIZ., THE COMMISSIONER OR THE BOARD , AS THE CASE MAY BE, HAS TO BE SATISFIED, ON THE BASIS OF THE RE ASONS RECORDED BY THE INCOME-TAX OFFICER, THAT IT IS A FIT CASE FO R ISSUANCE OF SUCH A NOTICE. THE POWER CONFERRED UPON THE INCOME-TAX O FFICER BY SECTIONS 147 AND 148 IS THUS NOT AN UNBRIDLED ONE. IT IS HEDGED IN ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 15 WITH SEVERAL SAFEGUARDS CONCEIVED IN THE INTEREST O F ELIMINATING ROOM FOR ABUSE OF THIS POWER BY THE ASSESSING OFFIC ERS. THE IDEA WAS TO SAVE THE ASSESSEES FROM HARASSMENT RESULTING FROM MECHANICAL REOPENING OF ASSESSMENTS BUT THIS PROTEC TION AVAILS ONLY TO THOSE ASSESSEES WHO DISCLOSE ALL MATERIAL F ACTS TRULY AND FULLY. EVERY DISCLOSURE IS NOT AND CANNOT BE TREATE D TO BE TRUE AND FULL DISCLOSURE. A DISCLOSURE MAY BE A FALSE ONE OR A TRUE ONE. IT MAY BE A FULL DISCLOSURE OR IT MAY NOT BE. A PARTIA L DISCLOSURE MAY VERY OFTEN BE A MISLEADING ONE. WHAT IS REQUIRED IS A FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS NECESSARY FOR MAKI NG ASSESSMENT FOR THAT YEAR. ALL THE REQUIREMENTS STIPULATED BY S ECTION 147 MUST BE GIVEN DUE AND EQUAL WEIGHT.' IT WAS FURTHER OBSERVED THAT : 'SINCE THE BELIEF IS THAT OF THE INCOME-TAX OFFICER , THE SUFFICIENCY OF REASONS FOR FORMING THE BELIEF IS NOT FOR THE CO URT TO JUDGE BUT IT IS OPEN TO AN ASSESSEE TO ESTABLISH THAT, IN FACT THERE EXISTED NO BELIEF OR THAT THE BELIEF WAS NOT AT ALL A BONA FIDE ONE OR WAS BASED ON VAGUE, IRRELEVANT AND NON-SPECIFIC INFORMATION. TO THAT LIMITED EXTENT, THE COURT MAY LOOK INTO THE CONCLUSION ARRIVED AT BY THE INCOME-TAX OFFICER AND EXAMINE WH ETHER THERE WAS ANY MATERIAL AVAILABLE ON THE RECORD FROM WHICH THE REQUISITE BELIEF COULD BE FORMED BY THE INCOME-TAX OFFICER AN D FURTHER WHETHER THAT MATERIAL HAD ANY RATIONAL CONNECTION O R A LIVE LINK FOR THE FORMATION OF THE REQUISITE BELIEF.' (EMPHAS IS SUPPLIED) 11. IN THE MATTER OF CIT V. KELVINATOR OF INDIA LTD. [2010] 320 ITR 561/187 TAXMAN 312 (SC) , THE HON'BLE SUPREME COURT HELD: 'HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETAT ION TO THE WORDS 'REASON TO BELIEVE', FAILING WHICH SECTION 14 7 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPINION', WHICH CAN NOT BE PER SE REASON TO REOPEN. ONE MUST ALSO KEEP IN MIND THE CO NCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND POWER TO REA SSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS TH E POWER TO ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 16 REASSESS, BUT THE REASSESSMENT HAS TO BE BASED ON F ULFILMENT OF CERTAIN PRE-CONDITIONS AND IF THE CONCEPT OF 'CHANG E OF OPINION' IS REMOVED AS CONTENDED ON BEHALF OF THE DEPARTMENT, T HEN 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 ASSESSING OFFICER. HENC E, AFTER 1-4- 1989, THE ASSESSING OFFICER HAS POWER TO REOPEN, PR OVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO CONCLUSION THAT T HERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. UNDER THE DIR ECT TAX LAWS (AMENDMENT) ACT, 1987, THE PARLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BELIEVE', THE PARLIAMENT REINT RODUCED THE SAID EXPRESSION AND DELETED THE WORD 'OPINION' ON T HE GROUND THAT IT WOULD VEST ARBITRARY POWERS IN THE ASSESSING OFF ICER.' (EMPHASIS SUPPLIED) 12. IN THE BACKDROP OF THE SETTLED POSITION OF LAW NOT ICED HEREINABOVE ADVERTING TO THE FACTS OF THE PRESENT C ASE, IT IS TO BE NOTICED THAT THE ASSESSEE HAD MADE TRUE AND FULL DI SCLOSURE OF ALL RELEVANT FACTS RELATING TO THE CLAIM OF ADDITIONAL DEPRECIATION AND ALSO IN RESPECT OF CLAIM FOR GRANT OF DEDUCTION UND ER SECTION 80 IA. A SEPARATE AUDIT REPORT IN THE PRESCRIBED FORM 10CCB IN SUPPORT OF THE CLAIM FOR DEDUCTION UNDER SECTION 80 IA/80IB WAS ALSO DULY SUBMITTED. THE ASSESSEE HAD ALSO SUBMITTE D REPLY PURSUANT TO ALL QUERIES MADE BY AO DURING THE ASSES SMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. IN THI S VIEW OF THE MATTER, THE CONTENTION SOUGHT TO BE RAISED BY THE R EVENUE ABOUT NON-DISCLOSURE ON THE BASIS OF THE FAILURE ON THE P ART OF THE ASSESSEE IN MENTIONED BIFURCATED AMOUNT OF ADDITION AL DEPRECIATION ALLOWABLE IN THE DEPRECIATION CHART IS ABSOLUTELY BASELESS. IT IS TO BE NOTICED THAT ALL THAT HAS BEE N SAID BY THE AO IS THAT AFTER SCRUTINY ASSESSMENT, IT WAS OBSERVED THAT ASSESSEE HAS MADE INCORRECT CLAIM OF ADDITIONAL DEPRECIATION ON CPP WHEREAS, THE CLAIM FOR ADDITIONAL DEPRECIATION ON C PP WAS ALLOWED BY THE AO WHILE FRAMING THE ASSESSMENT UNDE R SECTION 143(3) AFTER CONSCIOUS CONSIDERATION OF THE MATERIA L ON RECORD. IT ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 17 IS NOT EVEN THE CASE OF THE REVENUE THAT THE FORMAT ION OF THE BELIEF REGARDING THE ESCAPEMENT OF THE ASSESSMENT B Y THE AO IS BASED ON ANY NEW MATERIAL COMING ON RECORD. APPAREN TLY, THE FORMATION OF THE BELIEF BY THE AO REGARDING ESCAPEM ENT OF THE ASSESSMENT IS BASED ON RE-APPRECIATION OF THE MATER IAL ALREADY AVAILABLE ON RECORD AT THE TIME OF SCRUTINY ASSESSM ENT WHICH AMOUNTS TO MERE CHANGE OF OPINION. OBVIOUSLY, IN TH E GARB OF PURPORTED EXERCISE OF THE POWER TO REASSESS, THE AO CANNOT BE PERMITTED TO REVIEW HIS OWN ORDER OR THE ORDER PASS ED BY HIS PREDECESSOR. THUS, THE FINDING ARRIVED AT BY THE IT AT THAT THE REASSESSMENT PROCEEDINGS INITIATED BY THE AO BY MER E CHANGE OF OPINION IS PATENTLY ILLEGAL, CANNOT BE FAULTED WITH . A SIMILAR VIEW HAS BEEN TAKEN BY THE HONBLE DELHI HIGH COURT IN CASE OF PR. CIT VS. TUPPERWARE INDIA PVT. LTD. (SUPRA). WE FURTHER NOTE THAT IT IS NOT THE CASE OF EARNING THE INTEREST INCOME FROM THE SURPLUS FUND DEPOSITED IN THE BANK OR OTHER INCOMES ARE NOT CONN ECTED WITH THE BUSINESS ACTIVITY OF THE ASSESSEE DEVELOPING AND MA INTAINING INDUSTRIAL PARKS BUT THE INTEREST AND PENAL INTEREST RECEIVED BY THE ASSESSEE IN RESPECT OF THE LATE PAYMENT MADE BY THE ALLOTTEES. FURTHER, THE OTHER INCOMES THOUGH IT IS VERY SMALL AMOUNT IS ALSO IN R ESPECT OF THE MAINTENANCE AND FEE FOR SANCTION OF PLANS ETC AND T HEREFORE, IT IS APPARENT THAT ON THIS ISSUE THERE IS A POSSIBILITY OF TWO VIEWS. WHEN THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF THE ASSE SSEE U/S 80IA IN THE ORIGINAL ASSESSMENT CLAIM U/S 143(3) AND ALSO NOT D ISTURBING THE SAID ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 18 CLAIM IN THE FIRST REASSESSMENT ORDER PASSED U/S 14 3(3) R.W.S. 147 OF THE ACT THEN THE REOPENING FOR THE PURPOSE OF THE D ISALLOWING THE SAID DEDUCTION ON THE ISSUE ON WHICH TWO VIEWS ARE POSSI BLE IS NOT PERMISSIBLE IN THE ABSENCE OF ANY FRESH MATERIAL CA ME TO THE KNOWLEDGE OF THE AO WHICH COULD LEAD TO THE FORMATION OF BELI EF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT DUE TO EXC ESS DEDUCTION U/S 80IA OF THE ACT ALLOWED IN THE ORIGINAL ASSESSMENT. IT IS NOT THE CASE OF CLAIM OF DEDUCTION U/S 80IA OF THE ACT ALLOWED BY T HE AO WHICH IS ABSOLUTELY NOT PERMISSIBLE UNDER THE ACT BUT THE OP INION OF THE AO IN ALLOWING THE CLAIM IN THE ORIGINAL ASSESSMENT U/S 1 43(3) IS A POSSIBLE VIEW. ACCORDINGLY, IN VIEW OF THE FACTS THAT THE IN TEREST AND PENAL INTEREST WAS RECEIVED AS PART OF THE OTHER REVENUE EARNED BY THE ASSESSEE FROM THE ALLOTTEES AND FROM THE ACTIVITY OF DEVELOPING, MAINTAINING AND OPERATING THE INDUSTRIAL PARKS THEN THE CASE OF THE ASSESSEE DOES NOT FALL IN THE CATEGORY OF ABSOLUTE IMPERMISSIBLE CLAIM. HENCE, THE REOPENING BASED ON CHANGE OF OPINION IS NOT PERMISSIBLE UNDER THE LAW AND THE SAME IS HELD AS INVALID. ACCO RDINGLY, WE SET ASIDE THE REOPENING U/S 148 AS INVALID AND CONSEQUENTLY Q UASH THE REASSESSMENT FRAMED BY THE AO. ITA NO. 334 & CO.NO. 04 /JP/2016 ACIT VS. M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR 19 7. SINCE, WE HAVE SET ASIDE THE REOPENING OF THE AS SESSMENT AS INVALID AND QUASHED THE REASSESSMENT, THEREFORE, TH E OTHER ISSUES RAISED ON THE MERITS OF DEDUCTION U/S 80IA BECOME I NFRUCTUOUS. IN THE RESULT, THE REVENUE APPEAL IS DISMISSED AND CROSS OBJECTION OF ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09/02/2018. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09/02/2018. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- ACIT, CIRCLE-6, JAIPUR. 2. IZR;FKHZ@ THE RESPONDENT- M/S RAJASTHAN STATE INDUSTRIAL DEVELOPMENT & INVESTMENT CORPORATION LTD., JAIPUR. 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 334/JP/2016 & CO NO. 4/JP/2016} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR