Unipro Techno Infrastructure Pvt. Ltd., Chandigarh V. Pr. CIT-I, Chandigarh

ITA 361/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8316 (ITAT-CHANDIGARH)
• Duration Of Justice: 9 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 12-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI SARANGA L
• Assessee Lawyers: SUDHIR SEHGAL A K SOOD
• Keywords: Depreciation; Opportunity of being heard; Audit objection; Difference of opinion; Assessment record; Change of opinion; Reassessment proceedings
• Section: 143(3); 133(6); 148; 263; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.361/CHD/2016 (ASSESSMENT YEAR : 2011-12) M/S UNIPRO TECHNO INFRASTRUCTURE, VS. THE PR. C.I.T-I, PRIVATE LIMITED, SCO 36, SECTOR 7-C, CHANDIGARH. CHANDIGARH. PAN: AABCU1732D (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI SUDHIR SEHGAL A.K. SOOD RESPONDENT BY : SHRI RAVI SARANGAL, CIT DR DATE OF HEARING : 27.10.2016 DATE OF PRONOUNCEMENT : 06.02.2017 O R D E R PER ANNAPURNA GUPTA, A.M . : THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED PR. COMMISSIONER OF IN COME TAX, CHANDIGARH DATED 29.03.2016, PASSED UNDER SECT ION 263 OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT ), RELATING TO ASSESSMENT YEAR 2011-12. 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE AR E AS FOLLOWS: THAT THE ORDERS OF THE PR. COMMISSIONER OF INCOME TAX -1 ASSUMING JURISDICTION U/S 263 OF THE ACT ARE CONTRA RY TO LAW AND FACTS OF THE APPELLANT'S CASE AS THE ORDERS PAS SED UNDER SECTION 143(3) ARE NEITHER ERRONEOUS IN SO FAR AS I T IS PREJUDICIAL TO THE INTEREST OF THE REVENUE NOR COVERED UNDER NE WLY INSERTED EXPLANATION 2 OF SECTION 263 INSERTED W.E.F. 01.06. 2015 ON THE 2 ISSUE OF ALLOWABILITY OF DEDUCTION UNDER SECTION 80 IA, PROPORTIONATE PROFIT EARNED ON JOG WORK DONE BY SUB - CONTRACTORS AND EXAMINATION OF PROVISIONS OF SECTIO N 80IA(8)/80IA(10) ON THE FOLLOWING GROUNDS. 1. THAT THE PROCEEDINGS UNDER SECTION 263 OF THE AC T BY THE PR COMMISSIONER OF INCOME TAX IN THE INSTANT CASE FOR THE ASSESSMENT YEAR 2011-12 HAVE BEEN INITIATED ON ACCOUNT OF CHANGE OF OPINION' ON THE BASIS OF OPINI ON EXPRESSED AS A RESULT OF AUDIT OBJECTION AND BY TAKIN G ANOTHER OPPOSITE VIEW THAN THE VIEW EXPRESSED BY THE DEPARTMENT IN RESPONSE TO THE AUDIT OBJECTION BY NO T ACCEPTING THE AUDIT OBJECTION AND DEFENDING THAT TH E ACTIVITY OF THE COMPANY IS FULLY COVERED UNDER SECT ION 80IA(4)(B), WHICH IS NOT PERMITTED BY LAW. 2. THAT THE JURISDICTION U/S 263 BY THE PR COMMISSI ONER OF INCOME TAX-I FOR THE A/Y 2011-12 HAS BEEN WRONGLY ASSUMED AS THE ASSESSING OFFICER AFTER SCRUTINIZING ALL THE DETAILS, MAKING ENQUIRIES, PROPER VERIFICATION AND CONSIDERATION OF THE ENTIRE MATERIAL ON RECORD HAD ALLOWED THE CLAIM OF THE ASSESSEE AFTER DUE APPLICATION OF MIND. THE SAID STAND ALSO GETS CONFIRMED FROM THE FACT THAT THE DEPARTMENT IN RESPONSE TO THE AUDIT OBJECTION RAISED BY THE AG OFFICE DURING REVENUE AU DIT HAS NOT ACCEPTED THE AUDIT OBJECTION AND DEFENDED T HAT THE ACTIVITY OF THE COMPANY IS FULLY COVERED UNDER SECTION 80IA(4)(B). 3. THAT THE ORDERS OF THE PR COMMISSIONER OF INCOME TAX-I UNDER SECTION 263 IS BASED ON WHIMS AND FANCIES OF T HE REVISING AUTHORITY AS THERE IS NO MATERIAL ON RECORD TO SUGGEST THAT THE ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. 4. THAT THE ORDERS OF THE PR COMMISSIONER OF INCOME TAX-I UNDER SECTION 263 FOR THE A/Y 2011-12 OF THE ACT IS A RESULT OF TOTAL NON-APPLICATION OF MIND AND MECHANICAL EXERCISE OF POWER. 5. THAT THE ORDER OF THE PR COMMISSIONER OF INCOME TAX- I LACKS FROM JUDICIAL CONSISTENCY AS THE SAID DEDUCTION U/S 80A HAS BEEN ALLOWED BY THE 3 SUBSEQUENT ASSESSING OFFICERS FOR THE A/Y 2012-13 A ND 2013-14 AFTER SCRUTINIZING ALL THE DETAILS, MAKING ENQUIRIES, PROPER VERIFICATION AND CONSIDERATION OF TH E ENTIRE MATERIAL ON RECORD HAD ALLOWED THE CLAIM OF T HE ASSESSEE AFTER DUE APPLICATION OF MIND. 6. ANY OTHER GROUND THAT MAY BE TAKEN UP BEFORE THE APPEAL IS FINALLY HEARD AND DISPOSED OF. 3. BRIEF FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE COMPANY HAD FILED ITS RETURN OF INCOME ON 28. 09. 2011 DECLARING INCOME OF RS.24,35, 260/-. ASSES SMENT U/S 143 (3) WAS FRAMED AT AN INCOME OF RS.29,87,288 /- AFTER ALLOWING DEDUCTION UNDER SECTION 80IA AMOUNTI NG TO RS.12,11,810/-. 4. THEREAFTER ON EXAMINING THE ASSESSMENT RECORD THE LEARNED PR.CIT FOUND THAT THE ASSESSING OFFICER HAD NOT EXAMINED CERTAIN ISSUES VIS--VIS CLAIM OF DEDU CTION UNDER SECTION 80IA OF THE ACT MADE BY THE ASSESSEE. THE LEARNED PR. CIT NOTICED THAT THE ASSESSEE COMPANY H AD BEEN AWARDED A CONTRACT WHICH WAS IN THE NATURE OF WORKS CONTRACT AND IN VIEW OF EXPLANATION TO SUBS ECTION (13) TO SECTION 80IA, WHICH EXCLUDES BUSINESS IN TH E NATURE OF WORKS CONTRACT FROM CLAIMING BENEFIT OF DEDUCTION UNDER SECTION 80IA(4), DEDUCTION UNDER SE CTION 80IA, WAS NOT ALLOWABLE ON THE PROFITS DERIVED FROM THIS PROJECT. FURTHER THE LEARNED PR. CIT NOTICED THAT T HE ASSESSEE HAD UNDERTAKEN A PROJECT OF WATER SUPPLY A ND HAD DEBITED A PAYMENT OF RS.2,92,48,936/- IN THE TR ADING ACCOUNT RELATING TO THE PROJECT ON ACCOUNT OF JOB W ORK DONE BY SUB-CONTRACT. AS PER THE LEARNED PR. CIT T HE 4 ASSESSEE WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTI ON 80IA ON THE PROPORTIONATE PROFITS EARNED ON JOB WORK EXE CUTED BY SUB-CONTRACT. THE LEARNED PR. CIT ALSO NOTICED THAT IN RESPECT OF TWO PROJECTS RELATING TO WATER SUPPLY AN D HAMIRPUR BYE PASS, THE EXPENSES INCURRED ON FREIGHT AND CARRIAGE, FUEL AND WAGES AND SALARY WERE NOT IN PRO PORTION TO THE RECEIPTS FROM THE SAME AND THE SAME HAD NOT BEEN EXAMINED BY THE ASSESSING OFFICER W.R.T THE PROVISI ONS OF SECTION 80IA(8)/80IA (10) OF THE ACT. THE LEARNED PR. CIT FOUND THAT THE ASSESSING OFFICER HAD NOT EXAMINED T HE ABOVE ISSUE DURING THE ASSESSMENT PROCEEDINGS. ACCORDINGLY, PROCEEDINGS UNDER SECTION 263 OF THE A CT WERE INITIATED AND SHOW CAUSE NOTICE ISSUED TO THE ASSESSEE WHICH MENTIONED THE DISCREPANCIES NOTED IN THE ASSESSMENT ORDER PASSED AS FOLLOWS: I ) THE ASSESSEE COMPANY WAS AWARDED CONTRACT BY HIMACHAL PRADESH GOVERNMENT, IRRIGATION AND PUBLIC HEALTH DEPARTMENT DIVISION THURAL, DISTT. KANGRA. I T IS SEEN THAT THE ASSESSEE COMPANY HAS CLAIMED DEDUCTION U/S 80IA OF I.T ACT, 1961 ON THE PROFITS OF THE SAID CONTRACT. THE PROJECT IS APPARENTLY COVERED UNDER TH E DEFINITION OF 'WORK CONTRACT'. ACCORDINGLY AS PER TH E EXPLANATION TO SUB-SECTION 13 OF SECTION 80IA, DEDUC TION U/S 80IA OF I.T. ACT, 1961 IS NOT ALLOWABLE ON THE P ROFITS DERIVED FROM THESE PROJECTS. ALLOWANCE OF DEDUCTION U/S 80IA HAS THUS RESULTED IN LOSS OF REVENUE. II) DEDUCTION U/S 80IA HAS BEEN CLAIMED ON PROFITS DERIVED FROM THE PROJECT OF WATER SUPPLY. IT IS SEE N THAT IN TRADING ACCOUNT, A PAYMENT OF RS.2,92,48,936/- H AS BEEN MADE FOR 'JOB WORK DONE BY SUB-CONTRACTORS'. PROPORTIONATE PROFITS EARNED ON THE JOB WORK EXECUT ED BY A SUB-CONTRACTORS IS NOT ELIGIBLE FOR DEDUCTION U/S 80IA. THIS ISSUE HAS NOT BEEN EXAMINED BY THE AO DURING TH E COURSE OF ASSESSMENT PROCEEDINGS AND HAS RESULTED IN LOSS OF REVENUE. 5 III) IT FURTHER SEEN THAT THE RECEIPTS FROM THE WATER SUPPLY PROJECT AND HAMIRPUR BYE PASS PROJECT ARE IN THE RATION OF 2.8 : 1 WHEREAS THE EXPENSES INCUR RED ON FREIGHT & CARRIAGE, FUEL AND WAGES & SALARY ARE COMPARATIVELY HIGHER IN CASE OF HAMIRPUR BYE PASS PROJECT. THE COMPARATIVE DETAILS HAVE NOT BEEN EXAMINED BY THE AO VIZ-A-VIZ THE PROVISIONS OF SECTIONS 80IA(8)/80IA(10) OF L.T. ACT, 1961. 5. DURING THE COURSE OF PROCEEDINGS BEFORE THE LEARNED PR.CIT THE ASSESSEE FILED DETAILED REPLIES, STATING THAT THE ISSUE OF ELIGIBILITY OF THE ASSESSEE TO C LAIM DEDUCTION OF ITS PROFITS UNDER SECTION 80IA HAD BEE N EXAMINED BY THE ASSESSING OFFICER DURING ASSESSMEN T PROCEEDINGS AND AFTER DUE VERIFICATION HAD ALLOWED THE SAME TO THE ASSESSEE AND THEREFORE THE PRESENT PROC EEDING UNDER SECTION 263 ONLY TANTAMOUNTED TO REVIEW DUE T O CHANGE OF OPINION. FURTHER THE ASSESSEE SUBMITTED THAT EVEN ON MERITS THE ASSESSEE WAS ENTITLED TO DEDUCTI ON UNDER SECTION 80IA SINCE THE CONTRACT AWARDED TO I T WAS NOT IN THE NATURE OF WORKS CONTRACT BUT WAS A COMPO SITE CONTRACT ON BUILD, OPERATE AND TRANSFER BASIS WITH ALL THE ATTENDANT RISKS RELATING TO INVESTMENT, ENTREPRENEU RSHIP PERFORMANCE GUARANTEE ETC. LYING ON THE ASSESSEE IT SELF. FURTHER THE ASSESSEE SUBMITTED THAT IN THE CASE OF KAVERI INFRASTRUCTURE PVT. LIMITED/UNIPRO TECHNO INFRASTRU CTURE SIMILAR CONTRACT WAS HELD AS INFRASTRUCTURAL CONTRA CT IN THE ASSESSMENT YEAR 2008 -09 BY ANOTHER ASSESSING O FFICER AND ALSO THE ASSESSEE HAD BEEN GRANTED CERTIFICATES FOR DEDUCTION OF TAX AT LOWER RATE IN VIEW OF THE FACT THAT THE CONTRACT AWARDED TO IT QUALIFIED FOR DEDUCTION UNDE R SECTION 80 IA OF THE ACT. THE ASSESSEE FURTHER ARGU ED THAT 6 THE PROCEEDINGS HAD BEEN INITIATED ON RECEIPT OF AU DIT OBJECTION. THE GIST OF THE SUBMISSIONS MADE BY THE ASSESSEE BEFORE THE LEARNED PR. CIT ARE REPRODUCED IN PARA 3.1 OF HIS ORDER, AFTER CONSIDERING WHICH LEARNED P R. CIT HELD THAT ALL THE ABOVE THREE ISSUES HIGHLIGHTED BY HIM HAD NOT BEEN EXAMINED BY THE ASSESSING OFFICER DURI NG ASSESSMENT PROCEEDINGS AND THEREFORE THE ORDER HAD BEEN PASSED WITHOUT MAKING ENQUIRIES OR VERIFICATION WHI CH WERE NECESSARY FOR THE GRANT OF DEDUCTION UNDER SEC TION 80IA(4) OF THE ACT. HE THEREFORE HELD THAT THE ORDE R PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND ACCO RDINGLY SET ASIDE THE SAME WITH A DIRECTION TO THE ASSESSIN G OFFICER PASS AN ORDER AFRESH IN ACCORDANCE WITH LAW . THE RELEVANT FINDINGS OF THE LEARNED PR. CIT AT PARA 3. 1 TO 4 OF HIS ORDER ARE AS UNDER: 3.1 IN REPLY TO THE ISSUE AT SR. NO. 1 OF THE SHOW CAUSE, THE ASSESSEE HAS FILED A DETAILED REPLY WHER EIN IT HAS BEEN STATED THAT: I) THE COMPOSITE PROJECT ENTRUSTED/AWARDED TO THE ASSESSEE WAS ON BUILT, OPERATE AND TRANSFER BASIS. II) FOR THE EXECUTION OF CONTRACT THE MACHINERY INSTALLED INCLUDING ITS COMPONENTS, ENGINEERS & LABOUR EMPLOYED, DESIGNING, EXECUTION, FINANCING IN THE FORM OF CAPITAL INVESTMENT, ENTREPRENEURSHIP RISK, PERFORMANCE GUARANTEE ETC. IS THE RESPONSIBILITY OF THE ASSESSEE. III) A CERTIFICATE FOR DEDUCTION OF TAX AT LOWER RATE WAS ISSUED TO THE ASSESSEE BY THE CIT(TDS) IN VIEW OF THE 7 FACT THAT THE CONTRACT AWARDED TO THE ASSESSEE QUALIFIERS FOR DEDUCTION U/S 80IA OF THE ACT. IV) DEDUCTION U/S 80IA WAS ALLOWED BY THE AO ON THE GROUND THAT THE CONTRACT WAS FOR INFRASTRUCTURE DEVELOPMENT AND NOT A CIVIL CONTRACT. V) SIMILAR CONTRACT IN THE CASE OF M/S KAVERY INFRASTRUCTURE PVT. LTD./UNIPRO TECHNO INFRASTRUCTURE WAS HELD AS INFRASTRUCTURAL CONTRACT IN THE A.Y. 2008 - 09 BY ANOTHER ASSESSING OFFICER. VI) THE PROCEEDINGS U/S 263 HAVE BEEN INITIATED AFTER RECEIPT OF OBJECTION FROM REVENUE AUDIT PARTY WITHOU T BESTOWING CONSCIOUS ATTENTION TO THE FACTUAL POSITION. THE ASSESSEE HAS FURTHER STATED, THAT THE P ROCEEDINGS INITIATED U/S 263 DESERVE TO BE DROPPED IN VIEW OF TH E FOLLOWING:- I) THE PROCEEDINGS HAVE BEEN INITIATED ON THE OPINION O F AUDIT WHICH ARE NOT PERMITTED AS PER VARIOUS JUDICIAL DECISIONS. II) THE DEDUCTION WAS ALLOWED BY THE AO AFTER VERIFICATION WHICH CANNOT BE REVIEWED DUE TO CHANGE IN OPINION. [CIT(CENTRAL) VS NAHAR EXPORTS LTD.] III) IN THE PROPOSAL OF THE ASSESSING OFFICER, IT H AS NOWHERE BEEN RECORDED THAT DEDUCTION WAS GRANTED BECAUSE OF LACK OF INQUIRING/VERIFICATION OR AS A RESULT OF NON APPLICATORS OF MIND. IV) THE NOTICE HAS BEEN ISSUED IN MECHANICAL EXERC ISE OF POWER AND NON APPLICATION OF MIND IN SUPPORT OF WHICH FIVE ARGUMENTS HAVE BEEN GIVEN. V) THE DEDUCTION HAS BEEN ALLOWED BY THE AO ON A TR UE AND CORRECT INTERPRETATION OF THE PROVISION OF THE A CT. VI) POWER U/S 263 CANNOT BE EXERCISED BY ASSESSING DIFFERENT INTERPRETATION ON THE SAME SET OF FACTS. 3.1.1 THE SUBMISSIONS MADE BY THE ASSESSEE HAVE BEE N CONSIDERED. THE EXPLANATION TO SUBSECTION 13 OF SE CTION 80IA HAS BEEN SUBSTITUTED BY FINANCE ACT 2009. THE EXPLANATION IS EXCLUSIONARY IN NATURE WHICH STATES THAT NOTHING CONTAINED IN THE SECTION WILL APPLY IN RELA TION TO A BUSINESS REFERRED TO IN SUB SECTION (4) WHICH IS IN T HE NATURE 8 OF WORKS CONTRACT AWARDED BY ANY PERSON (INCLUDING THE CENTRAL OR STATE GOVERNMENT). THUS TO BE ELIGIBLE F OR DEDUCTION U/S 80IA(4), THE BUSINESS SHOULD NOT BE O F THE NATURE OF WORKS CONTRACT. IT IS SEEN FROM THE RECOR DS OF THE ASSESSMENT PROCEEDINGS THAT THIS ASPECT HAS NEVER B EEN EXAMINED DURING THE COURSE OF ASSESSMENT AND NO VERIFICATIONS WERE MADE BY THE AO. 3.1.2 AS PER THE PROVISION OF SECTION 263 OF T HE I.T. ACT, THE PR. COMMISSIONER MAY CALL FOR AND EXAMINE THE RECORD OF ANY PROCEEDINGS UNDER THIS ACT AND IF CON SIDERS THAT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER I S ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE, HE MAY, AFTER GIVING THE ASSESSEE AN OPPORT UNITY OF BEING HEARD AND AFTER MAKING OR CAUSE TO BE MADE SUC H INQUIRY AS HE DEEMS NECESSARY, PASS SUCH ORDER THER EON AS THE CIRCUMSTANCES OF THE CASE JUSTIFY. IN THIS C ONTEXT, IT IS WORTHWHILE TO MENTION THAT SECTION 263 DOES NOT PRESCRIBE ANY PROCEDURAL CONDITION FOR INVOKING THE SAID PROV ISION. THE RECORDS MAY BE EXAMINED FOR DIFFERENT REASONS INCLUDING ANY OBJECTION RAISED BY THE AUDIT FOR INVOKING THE PROVISION OF SECTION 263. IN THE CASE OF CIT (CEN TRAL) VS NAHAR EXPORTS LTD. (2008] 173 TAXMAN 3 (P&H), THE HON'BLE JURISDICTIONAL HIGH COURT, HAD RELIED ON TH E DECISION OF HON'BLE APEX COURT IN CIT VS MAX INDIA LTD [295 ITR 282 (SC)] WHEREIN IT WAS HELD THAT AT THE RELEVANT TIME TWO VIEWS WERE POSSIBLE ON THE WORD 'PROFITS' IN THE PROVISION TO SECTION 8HHC (3). IN THE PRESENT CASE, IT IS NOT A QUESTION OF HAVING A VIEW DIFFERENT THAN THE ONE HELD BY THE AO. IN THE PRE SENT CASE THE APPLICABILITY OF EXPLANATION TO SUB SECTIO N 13 OF SECTION 80IA WAS NOT EXAMINED WHICH PROHIBITS DEDUCTION U/S 80IA(4J IN THE CASE OF WORK CONTRACT. THUS WHETHER THE PROFITS DERIVED BY THE ASSESSEE FE LL UNDER THE PREVIEW OF EXPLANATION TO SECTION 13 WAS AN ESSENTIAL CONDITION FOR THE APPLICABILITY OF SECTION 80IA(4J OF THE ACT. THE ASSESSEE HAS FURTHE R RELIED ON THE DECISION IN NARAIN SINGLA VS. PRINCIPAL COMMISSIONER OF INCOME TAX(CENTRAL), LUDHIANA (62 TAXMANN.COM [2015] 255 (CHANDIGARH - TRIB.), THE FA CTS OF WHICH ARE NOT APPLICABLE TO THE CASE OF THE ASSE SSEE. ON CONTRARY TO THE CLAIM OF THE ASSESSEE, THE HON'B LE TRIBUNAL IN THE SAID CASE HAS HELD THAT IN CASE OF LACK OF INQUIRY, CAUSE OF ACTION U/S 263 OF THE ACT WAS OPEN. THE CASE OF THE ASSESSEE PRECISELY FALLS UNDER THES E OBSERVATIONS AS NO INQUIRY HAS BEEN MADE ON THE APPLICABILITY OF EXPLANATION TO SUB SECTION 13 OF S ECTION 80IA IN THE CASE OF THE ASSESSEE. FURTHER THE FACTS OF 9 ISSUANCE OF CERTIFICATE FOR TAX DEDUCTION AT LOWER RATES OR ALLOWING DEDUCTION IN SOME OTHER CASE BY ANY OTHER AO ARE NOT RELEVANT HERE. ACCORDINGLY, T HE ORDER PASSED BY THE ASSESSING OFFICER IS ERRO NEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF R EVENUE ON THIS ISSUE. 3.2 REGARDING THE ISSUE AT SR. NO. 2 OF THE SHOW CAUSE NOTICE, THE ASSESSEE HAS ADMITTED THAT DURING THE EXECUTION OF THE CONTRACT, SERVICES OF SUBCONTRACTORS WERE HIRED. THE ASSESSEE HAS FURTHER CLAIMED THAT T HE ISSUE HAS BEEN CONSIDERED BY THE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS THOUGH NOT DISCUSSED IN THE ASSESSMENT ORDER AND THAT SECTION 80IA DOES NOT EXPRESSLY DEBAR THE ASSESSEE FROM CLA IMING DEDUCTIONS U/S 80IA. 3.2.1 THE PROVISIONS OF SECTION 80IA(4) ARE APPLICABLE TO ANY ENTERPRISE CARRYING ON BUSINESS OF DEVELOPIN G OR OPERATING AND MAINTAINING OR DEVELOPING, OPERATING AND MAINTAINING ANY INFRASTRUCTURAL FACILITY. THE DEDUCTIONS ARE THUS CLEARLY NOT APPLICABLE FOR THE CONTRACT WHICH IS NOT CARRIED OUT BY THE ASSESSEE. THIS ASPECT HAS NOT BEEN SUBJECTED TO VERIFICATION DURIN G THE ASSESSMENT PROCEEDINGS. NO SUCH DETAILS WERE CALLED FOR BY THE AO OR SUBMITTED BY THE ASSESSEE. ACCORDINGLY, EVEN ON THIS ISSUE THE ORDER PASSED BY THE AO IS ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE IN TEREST OF REVENUE. 3.3 REGARDING THE ISSUE MENTIONED AT SR. NO. 3 OF TH E SHOW CAUSE THE ASSESSEE HAS CLAIMED THAT THE SAME W AS DULY EXAMINED BY THE ASSESSING OFFICER. IT HAS FURTH ER BEEN CLAIMED THAT THE PROVISIONS OF SECTION 801A(8) ARE NOT APPLICABLE. THERE IS NOTHING ON RECORD EITHER IN TH E QUESTIONNAIRE OR IN THE NOTING SHEET ENTRIES TO SUG GEST THAT VERIFICATION WAS MADE BY THE AO DURING THE ASSESSMEN T PROCEEDINGS WITH RELATION OF APPLICABILITY OF PROVISION OF SECTION 801A(8)/80IA(10) OF THE ACT. HENCE, THE ORDER PASSED BY THE AO IS ERRONEOUS SO FAR AS IT IS PREJUDICIAL T O THE INTEREST OF REVENUE ON THIS ISSUE ALSO. 3.4 FURTHER, REFERENCE IS ALSO MADE HERE TO THE NEWLY INSERTED EXPLANATION 2 OF SECTION 263 WHICH WAS INSERTED W.E.F. 01.06.2015 AND READS AS UNDER:- 'FOR THE PURPOSE OF THIS SECTION, IT IS HEREBY D ECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DE EMED TO 10 BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE IN TEREST OF THE REVENUE, IF IN THE OPINION THE PRINCIPAL COMMISSIONER OR COMMISSIONER, - (A) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING IN TO THE CLAIM; (C) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH' ANY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE B OARD UNDER SECTION 119; OR (D) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSE SSEE, RENDERED BY THE JURISDICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OTHER PERSON.' HENCE, LEGAL PROVISIONS/COURT DECISIONS AS CITED BY THE ASSESSEE WITH RESPECT TO LIMITATION/VALIDITY OF INVO KING PROVISIONS OF SECTION 263 ARE NOT APPLICABLE IN THIS CASE. IN VIEW OF THE ABOVE, IT IS EVIDENT THAT THE ISSUES MENTIONED IN SHOW CAUSE NOTICE AS DETAILED ABOVE HA VE NOT BEEN EXAMINED/VERIFIED AT THE TIME OF ASSESSMENT PR OCEEDINGS. IT IS THEREFORE HELD THAT THE SAID ASSESSMENT ORDER IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF REVENUE FOR THE REASONS DISCUSSED ABOVE IN VIEW OF THE PROVISIONS OF SECTION 263, INTER-ALIA, INCLUDING EXPLANATION 2 (A) INSERTED W.E.F. 01.06.2015, ACCORDINGLY, THE ASSESSMENT ORDER U/S 143(3)DATED 26.12.2013 FOR ASSESSMENT YEAR 2011-12 IS CANCELLED WITH A DIRECTION TO THE ASSESSING OFFICER TO PASS AN ORDER AFRESH IN ACCORDANCE WITH LAW KEEPING IN VIEW THE ABOVE OBSERVATIONS AND AFTER ALLOWING OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 6. AGGRIEVED BY THE SAME THE ASSESSEE HAS COME UP IN APPEAL BEFORE US. 7. BEFORE US LD. COUNSEL FOR THE ASSESSEE REITERAT ED THE CONTENTIONS MADE BEFORE THE LEARNED PR. CIT WH ILE THE LEARNING DR RELIED ON THE ORDER OF THE LEARNED PR. CIT. 11 8. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE ORDER OF THE LEARNED PR. CIT AND THE DOCUMENTS PLACED BEFORE US. 9. ON PERUSAL OF THE ORDER OF THE LEARNED PR.CIT W E FIND THAT THE FIRST REASON FOR INVOKING REVISIONAR Y POWERS UNDER SECTION 263 WAS THAT THE ASSESSING OFFICER HA D NOT EXAMINED THE CLAIM OF THE ASSESSEE OF DEDUCTION UND ER SECTION 80IA OF THE ACT VIS-A-VIS THE APPLICABILITY OF THE EXPLANATION TO SUB-SECTION(13) OF SECTION 80IA OF T HE ACT. THE LEARNED PR. CIT HAS HELD THAT AS PER THE AFORES AID EXPLANATION TO THE SECTION WORK CONTRACTS ARE NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA(4) AND APPARENTLY THE PROJECT UNDERTAKEN BY THE ASSESSEE IS COVERED UNDER THE DEFINITION OF WORKS CONTRACT. MOREOVER THE ASSESS ING OFFICER HAS NOT EXAMINED THIS ASPECT DURING THE COU RSE OF ASSESSMENT AND NO VERIFICATIONS WERE MADE BY THE ASSESSING OFFICER, THEREFORE, AS PER THE LEARNED PR . CIT, THE ASSESSEE HAS BEEN WRONGLY ALLOWED DEDUCTION OF ITS PROFITS UNDER SECTION 80IA(4) OF THE ACT CAUSING PR EJUDICE TO THE REVENUE. BEFORE US LD. COUNSEL FOR THE ASSES SEE MADE ARGUMENTS CHALLENGING THE JURISDICTION OF THE PR.CIT TO INVOKE REVISIONARY POWERS ON THIS ASPECT AS ALSO ON THE MERITS OF THE CLAIM OF DEDUCTION UNDER SECTION 80IA (4). CHALLENGING THE ASSUMPTION OF JURISDICTION OF THE L EARNED PR. CIT, THE LD. COUNSEL OF THE ASSESSEE STATED THA T THIS ISSUE HAD BEEN EXAMINED DURING ASSESSMENT PROCEEDIN GS AND THE ASSESSING OFFICER, AFTER DUE APPLICATION OF MIND, 12 HAD ALLOWED THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA(4). THE LD. COUNSEL FOR THE ASSESSEE S TATED THAT REVIEW OF THE ORDER WAS ONLY ON ACCOUNT OF CHA NGE OF OPINION AND COULD NOT BE EXERCISED UNDER SECTION 26 3 OF THE ACT. IN SUPPORT OF ITS CONTENTION THAT THE ISS UE HAD BEEN EXAMINED BY THE AO DURING ASSESSMENT PROCEEDIN GS THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE FOLLOWING: A) THE RETURN OF INCOME FOR THE IMPUGNED YEAR ACCOMPANIED BY AUDIT REPORT UNDER SECTION 80 IA IN FORM NO. 10 CCB ON THE BASIS OF WHICH DEDUCTION UNDER SECTION 80 IA WAS CLAIMED BY THE ASSESSEE PLACED AT PAPER BOOK PAGE NO. 1 TO 26 B) THE QUESTIONNAIRE RECEIVED FROM THE ASSESSING OFFICER AND THE RELEVANT QUERIES RAISED AT SERIAL N O. 5,6,7 AND 11 OF THE SAME RELATING TO THE CLAIM OF T HE ASSESSEE UNDER SECTION 80 IA PLACED AT PAPER BOOK PAGE NO. 29 TO 35. THE RELEVANT QUERIES RAISED IN T HE QUESTIONNAIRE ARE AS FOLLOWS: 5. AS PER INFORMATION FILED BY YOU, IT HAS SEEN TH AT YOU HAD UNDERTAKEN CONTRACT FOR PROVIDING LIFT WATER SUPPLY SCHEME FROM EXECUTIVE ENGINEER, IPH AND CLAIMED THIS INCOM E AS EXEMPT U/S 80IA AND GOT SUB-CONTRACT FROM NKG INFRA IN WHICH INCOME IS TAXABLE. PLEASE PROVIDE THE COMPLET E DETAILS IN THIS REGARD ALONGWITH COPY OF CONTRACT W ITH THEM. PLEASE ALSO PROVIDE DETAILS HOW YOU ARE ELIGIBLE FOR EXEMPTION U/S 801A WHEN YOU ARE CONDUCTING ACTIVITIES UNDER CONTRACT. 13 6. YOU HAVE ALSO CLAIM EXEMPTION AMOUNTING TO RS.52,35,708/- U/S 10(2A) AND RS.12, 11, 810/- U/S 80IA. PLEASE PROVIDE THE COMPLETE DETAILS IN THIS REGA RD ALONGWITH DOCUMENTARY EVIDENCE. 7. AS PER AUDIT REPORT COL. NO. 26, THE AUDITOR HAS S HOWN DEDUCTION UNDER CHAPTER VI-A AT 'NIL' ON THE OTHER HAND IN THE COMPUTATION YOU HAVE CLAIMED UNDER CHAPTER V L- A AT RS. 12,11,810/-. PLEASE EXPLAIN THIS. 11. PLEASE STATE THE DATE ON WHICH THE COMPANY CAME INTO EXISTENCE. AS PER FORM NO. 10CCB ANNEXED WITH AUDIT REPORT AT PARA 8 THE AUDITOR HAS MENTIONED COMMENCEMENT OF OPERATION/ACTIVITY AS 13.04.2010. AND AT PARA 9 THE INITIAL ASSESSMENT YEAR FROM WHEN DEDUCTION U/S 80 -1A IS FOR THE A.Y. 2011-12. ON THE OTHER HAND, UNDER THE DETAIL OF FIXED ASSERT AS ON 31.03.2 011, YOU HAVE SHOWN WDV OF THE FIXED ASSET AS ON 01.04.2010 AT RS.1,81,58,128/-. PLEASE FURNISH DETAILS OF HOW WDV COMES TO EXIST ON 01.04.2010 WHEN YOUR DATE OF COMMENCEMENT OF OPERATION STARTED ON 13.04.2010 AND SHOW CAUSE WHY DEPRECIATION CLAIMED BY YOU SHOULD NOT BE DISALLOWED AS IT SEEMS THAT YO U ARE FURNISHING INACCURATE PARTICULARS. PLEASE ALSO FURNI SH WHETHER YOU HAVE CLAIMED SUCH EXEMPTION U/S 80-LA I N THE PREVIOUS YEAR ALSO OR NOT? 12. FURTHER AT PARA 12 OF FORM NO.10CCB, YOU HAVE S HOWN SALES TAX REGISTRATION NO. IN WHICH IT HAS ASCERTAI NED THAT YOU WERE GOT REGISTERED WITH SALES TAX ON 09.07.200 9. PLEASE STATE WHETHER YOU HAVE GOT SALE TAX NO. BEFO RE THE COMPANY CAME INTO EXISTENCE. C) THE REPLY FILED BY THE ASSESSEE IN RESPONSE TO THE QUERY RAISED DATED 13.08.13 PLACED AT PAPER BOO K PAGE NO. 36 TO 40. THE RELEVANT REPLY OF THE ASSESS EE 14 IN THE SAME POINTED OUT TO US BY THE LD. COUNSEL FO R THE ASSESSEE IS AS FOLLOWS: 5. THE ASSESSEE COMPANY WAS AWARDED CONTRACT BY HIMACHAL PARDESH GOVERNMENT, IRRIGATION AND PUBLIC H EALTH DEPARTMENT, DIVISION THURAL AS UNDER; 'PROVIDING REHABILITATION AND SOURCE LEVEL AGUMENTATION OF VARIOUS SCHEMES IN CHANGER AREA IN TENHIL JAISINGHPUR, PALAMPW, KHWIDIAN AND DERA IN DISTRICT KANGRA (HP) SUB HEAD:- CONSTRUCTION OF CIVI L WORK I.E. PERCOLATION WELL, PUMP HOUSE, DTAFF QUARTERS, LABORATORY BUILDING, INSPECTION HUT STORAGE TANKS, COMPOUND WALLS, RETAINING/BREAST -WALLS, WIRE CRATE WORKS, ROADS, STREET TRUSS BRIDGE, PROVIDING, LOWERING, LAYING AND JOINTING OF PIPE LINES INCLUDING SUPPLY AND FIXING OF REQUIRED VALVES AND SPECIALS, CONSTRUCTION OF ANCHOR BLOCKS/THRUST BLOCKS AND SUPPORTING PILLARS ETC FOR RISING MAIN, GRAVITY MAIN AND SUPPLY OF LAB EQUIPMENTS, INSPECTION VEHICLE AND MAINTENANCE VAN ETC. SUPPLY AND INSTALLATION OF PUMPING MACHINERY INCLUDING ACCESSORIES AND ELECTROMECHANICAL EQUIPMENTS REQUIRED FOR STEPPING DOWN OF 11KVA POWER SUPPLY AND POST COMPLETION OPERATION AND MAINTENANCE OF THE WHOLE SCHEME FOR 60 MONTHS INCLUDING AUTOMATION.' THE COMPOSITE PROJECT AWARDED TO THE ASSESSEE IN PR OVIDING LIFT WATER SUPPLY SCHEME FROM EXECUTIVE ENGINEER, IRRIGA TION & PUBLIC HEALTH, DIVISION THURAL, DISTT. KANGRA (HP) O N ACCOUNT OF PROVIDING REHABILITATION AND SOURCE LEVEL AUGMENTATI ON OF VARIOUS SCHEMES IN CHANGER AREA IN TEHSIL JAISINGHPU R, PALAMPUR, KHUNDIAN AND DEHRA IN DISTT KANGRA HP COMP LETE CONSTRUCTION OF THE PROJECT INCLUDING OPERATION & MAIN TENANCE OF THE WHOLE SCHEME IS COVERED UNDER SECTION 80IA. THE COPY OF CONTRACT WITH EXECUTIVE ENGINEER HP IPH DIVN. THU RAL FOR LIFT WATER SUPPLY SCHEME IS ENCLOSED HEREWITH. A COPY OF AGREEMENT AS SUB CONTRACTOR OF NKG INFRAS TRUCTURE LTD IS ALSO ENCLOSED HEREWITH. D) REPLY DATED 29.08.2013 FOR THE PURPOSE OF CLAIM OF DEDUCTION UNDER SECTION 80IA PLACED AT PAPER BOO K PAGE 41 NUMBER. THE RELEVANT PORTION OF THE REPLY I S AS FOLLOWS: PLEASE REFER TO THE ASSESSMENT PROCEEDINGS IN THE CASE OF UNIPRO TECHNO INFRASTRUCTURE PRIVATE LIMITE D, SCO 36, SECTOR 7, CHANDIGARH FOR THE A/Y 2011-12 PAN AACFU1 025F. THE INFORMATION/DOCUMENTS ASKED FOR IS AS UNDER; 15 2. THE PARTNERSHIP FIRM OF UNIPRO TECHNO INFRASTRUC TURE WAS CONVERTED INTO PRIVATE LIMITED COMPANY WITH EFFECT FROM 13.04.2010 WITH ALL ITS ASSETS AND LIABILITIES WITH THE SAME SALES TAX REGISTRATION NUMBER. THE DEDUCTION U /S 8Q1A WAS FIRST CLAIMED IN THE A/Y 2010-11. THE-YEAR UNDER REFERENCE IS THE SECOND YEAR FOR CLAIMING DEDUCTION U/S 801A. E) THE ORDER PASSED BY THE ASSESSING OFFICER DEALING WITH THE ISSUE OF 80IA AT PARAS 3 TO 4.2 OF THE ORDER AS FOLLOWS PLACED AT PAPER BOOK PAGE NOS. 44 TO 52 : 3. THE CASE OF THE ASSESSEE SELECTED UNDER CASS WIT H THE REASONS THAT 'AO TO EXAMINE THE REASONS & GENUINENESS FOR HIGH CLAIM OF REFUND OUT OF TDS'. W HEN CONFRONTED, THE ASSESSEE VIDE ITS REPLY DATED 13.08. 2013, HAS SUBMITTED THAT IN THE YEAR 2011-12 A REFUND OF RS.10,47,850/- WAS CLAIMED AS A PART OF THE INCOME OF THE COMPANY AMOUNTING TO RS. 12,11,810/- WAS EXEMPT U/S 80IA AND TDS WAS DEDUCTED ON THE TOTAL RECEIPT OF T HE COMPANY, THE EXCESS AMOUNT OF TDS DEDUCTED WAS CLAI MED AS REFUND. 4. THE ASSESSEE-COMMISSIONER CAME INTO EXISTENCE W.E.F. 13.04.2010 AFTER CONVERSION FROM PARTNERSHIP FIRM, NAMELY M/S UNIPRO TECHNO INFRASTRUCTURE TO M/S UNIP RO TECHNO INFRASTRUCTURE PRIVATE LTD. WITH ALL ITS ASS ETS AND LIABILITIES WITH SALE TAX REGISTRATION NUMBER AND AL SO CARRIED FORWARDED THE SAME WDV OF THE FIRM AS ON TH E LAST DATE OF 13.04.2013. 4.1 THE ASSESSEE COMPANY IS A PARTNER IN THE FI RM KAVERI INFRASTRUCTURE PRIVATE LTD. JV UNIPRO TECHNO INFRASTRUCTURE IN WHICH IT IS HOLDING 95% SHARE. COPY O F THE PARTNERSHIP DEED IS PLACED ON RECORD. THE ASESSEE HAS EARNED A PROFIT OF RS.52,35,708/- AS PARTNER ON ACC OUNT OF 95% SHARE OF PROFIT FROM THE FIRM AND CLAIMED EXEMP T U/S 10(2A) OF THE IT ACT, 1961. FARTHER, THE ASSESSEE COMPANY WAS AWARDED CONTRACT BY HIMACHAL PARDESH GOVERNMENT , 16 IRRIGATION AND PUBLIC HEALTH DEPARTMENT, DIVISION THU RAL. THE COMPOSITE PROJECT AWARDED TO THE ASSESSEE IN PROVIDIN G LIFT WATER SUPPLY SCHEME FROM EXECUTIVE ENGINEER, IRRIGA TION & PUBLIC HEALTH, DIVISION THURAL, DISTT. KANGRA (HP) ON ACCOUNT OF PROVIDING REHABILITATION AND SOURCE LEVEL AUGMENTATION OF VARIOUS SCHEMES IN CHANGER AREA IN TEHSIL JAISINGHPUR, PALAMPUR, KHUNDIAN AND DEHRA IN DISTT. KANGRA HP COMPLETE CONSTRUCTION OF THE PROJECT OF THE PROJECT INCLUDING OPERATION & MAINTENANCE OF THE WH OLE SCHEME. 4.2 THE ACTIVITY UNDERTAKEN BY THE COMPANY FOR IPH THURAL QUALIFIES EXEMPTION U/S 80!A OF THE I T. ACT 1961, AND THE INCOME IS 100% EXEMPT FOR 10 YEARS. IT MAY HE MENTIONED HERE THAT THIS THE 2 ND YEAR FOR CLAIMING EXEMPTION U/S (I.E. L ST YEAR IN THE HAND OF UNIPRO TECHNO INFRASTRUCTURE FOR THE F.Y. 09-10 AND 2 ND YEAR IN THE HAND OF UNIPRO TECHNO INFRASTRUCTURE PRIVATE LIMITED W.E .F. 13.04.2010, I.E. FOR THE F.Y. 2010-11) SINCE THE COMP ANY HAS AWARDED THE SAME PROJECT BY THE SAME GOVT. THIS YEAR , THE ASSESSEE HAS CLAIMED AN AMOUNT OF RS.12,11,810/- AS DEDUCTION U/S 80IA. THE ASSESSEE VIDE ITS REPLY, WHICH IS PLACED ON RECORD, HAS HIMSELF ADMITTED THAT THE YEA R UNDER REFERENCE IS THE SECOND YEAR FOR CLAIMING DED UCTION U/S 801A. 10. RELYING UPON THE ABOVE DOCUMENTS LD. COUNSEL FOR THE ASSESSEE STATED THAT RELEVANT QUERIES RELAT ING TO ELIGIBILITY OF THE CLAIM OF ASSESSEE OF DEDUCTION U NDER SECTION 80IA WAS RAISED BY THE ASSESSING OFFICER D URING ASSESSMENT PROCEEDINGS, DUE REPLY WAS FILED BY THE ASSESSEE AFTER CONSIDERING WHICH AND AFTER APPLYING HIS MIND TO WHICH THE ASSESSING OFFICER PASSED A DETAIL ED REPLY ALLOWING DEDUCTION UNDER SECTION 80IA TO THE ASSESSEE. THEREAFTER LD. COUNSEL FOR THE ASSESSEE D REW OUR 17 ATTENTION TO THE FACT THAT THE VIEW TAKEN BY THE AS SESSING OFFICER IN ALLOWING THE CLAIM OF THE ASSESSEE UNDER SECTION 80IA WAS CORRECT SINCE IT WAS ADEQUATELY PROVED BEF ORE HIM THAT THE CONTRACT AWARDED TO THE ASSESSEE WAS A COMPOSITE CONTRACT AWARDED ON BUILD, OPERATE AND TR ANSFER BASIS FOR THE EXECUTION OF WHICH THE MACHINERY INST ALLED INCLUDING ITS COMPONENTS, ENGINEERS AND LABOUR EMPL OYED, DESIGNING, EXECUTION, FINANCING IN THE FORM OF CAPI TAL INVESTMENT, ENTERPRISE RISK, PERFORMANCE GUARANTEE ETC WAS THE RESPONSIBILITY OF THE ASSESSEE. THE LD. CO UNSEL FOR THE ASSESSEE POINTED OUT THAT THE CONTRACT IN A NY CASE COULD NOT BE SAID TO BE A WORKS CONTRACT FOR THE PURPOSE OF EXPLANATION TO SUB-SECTION (13) TO SECTION 80IA( 4) AND THE ASSESSING OFFICER ON THE BASIS OF DOCUMENTS PR ODUCED BEFORE IT HAD RIGHTLY ARRIVED AT THE CONCLUSION TH AT THE ASSESSEE WAS ELIGIBLE TO CLAIM DEDUCTION UNDER SECT ION 80IA OF THE ACT. IN SUPPORT OF ITS CONTENTION THAT THE VIEW TAKEN BY THE LD. COUNSEL FOR THE ASSESSEE WAS A COR RECT AND PLAUSIBLE VIEW LD. COUNSEL FOR THE ASSESSEE DRE W OUR ATTENTION TO THE FACT THAT ON AN APPLICATION FILED BY THE ASSESSEE TO THE CIT (TDS) FOR ISSUING A CERTIFICATE FOR DEDUCTION OF TAX AT LOWER RATE ON ACCOUNT OF THE DE DUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 80IA OF THE A CT, THE ASSESSEE WAS AWARDED A CERTIFICATE FOR ASSESSMENT Y EARS 2010-11 TO 2013-14 PLACED AT PB-126 TO 134 AFTER CONSIDERING ALL THE NECESSARY AND RELEVANT DOCUMENT S PROVING THAT THE ASSESSEE WAS ELIGIBLE TO CLAIM DED UCTION UNDER THE SAME. LD. COUNSEL FOR THE ASSESSEE POINTE D OUT 18 THE FACT THAT THE ASSESSEE HAD BEEN AWARDED A CERTI FICATE FOR DEDUCTION OF TAX AT LOWER RATE ON ACCOUNT OF IT S ELIGIBILITY TO CLAIM DEDUCTION UNDER SECTION 80IA O F THE ACT PROVED THAT THE VIEW TAKEN BY THE ASSESSING OFFICER ON THE BASIS OF DOCUMENTS BEFORE IT WAS CORRECT. LD. COUNS EL FOR THE ASSESSEE FURTHER DREW OUR ATTENTION TO THE FACT THAT A SIMILAR CONTRACT IN THE CASE OF M/S KAVERI INFRASTR UCTURE PRIVATE LIMITED/UNIPRO TECHNO INFRASTRUCTURE WAS HE LD AS INFRASTRUCTURAL CONTRACT FOR THE ASSESSMENT YEAR 20 08-09 TO A.Y 2011-12 BY ANOTHER ASSESSING OFFICER. LD.COU NSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE RELEVANT ORDER SHEET ENTRY IN THE CASE OF M/S KAVERI INFRASTRUCTUR E PRIVATE LIMITED, JV UNIPRO TECHNO INFRASTRUCTURE PL ACED AT PB-70 AND 71, WHICH READS AS UNDER : 04.08.2015 THE REPLY TO THE NOTICES ISSUED UNDER SE CTION 133(6) OF THE ACT BY RESPONDENT NO. 2 TO THE IRRIGATION DEPARTMENT, H.P. GOVERNMENT WAS RECEIVED ON 03.08.2015 FROM THE EXECUTIVE ENGINEER (I&PH) DIVISION, H.P. GOVERNMENT, BY THE SAID RESPONDENT NO. 2, IN PURSUANCE OF WHICH THE CASE OF THE PETITIONER WAS FIXED FOR 04.08.2015. THE ASSESSING OFFICER I.E. RESPONDENT NO: 2, PASSED THE FOLLOWING ORDER IN FAVOUR OF THE PETITIONER WHICH RENDERED THE VERY INITIATION OF REASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR IN QUESTION INCLUDING ' THE SUBSEQUENT YEAR AS ILLEGAL AND TOTALLY WITHOUT JURISDICTION:- 'PRESENT: SH. A.K. SOOD, CA. THE ID. COUNSEL AGAIN SUBMITS THAT PROCEEDINGS U/S 148 NEED TO BE DROPPED AS THERE WAS NO NON 19 DISCLOSURE BY THE ASSESSEE. HE HAS AGAIN BEEN TOLD THAT THE CASE IS BEING PROCEEDED WITH ON MERIT AS THE MATTER IS ONE OF INTERPRETATION OF THE STATUTE. THE CLARIFICATION RECEIVED FROM THE EXECUTIVE ENGINEER, L&PH, DIVISION BARSAR, DISTT. HAMIRPUR VIDE LETTER DT. 1/8/2016 IN RESPONSE TO QUERY U/S 133(6) IS ON RECORD. PERUSAL OF THE SAME SHOWS THAT THE ASSESSEE WAS AWARDED THE COMPLETE PROJECT CONTRACT ON BOT BASIS AND NO OTHER AGENCY WAS INVOLVED IN THE SAME. THE ID. COUNSEL HAS ALSO CITED CBDT CIRCULAR NO. 10/2005 DT. 16.12.2005 WHICH THOUGH SPECIFIC TO PORTS INTERPRETS SECTION 80IA AS BEING APPLICABLE TO PROJECTS/ STRUCTURES BUILT UNDER BOT BASIS. PERUSAL OF CLARIFICATION RECEIVED FROM I H.P. GOVT. DEPTT. AND THE LANGUAGE OF THE CONTRACT AGREEMENT SHOWS THAT THE ACTIVITY OF THE ASSESSEE IS NOT IN THE NATURE OF WORKS CONTRACT FOR THE PURPOSES OF 80IA. IT APPEARS THAT THE ASSESSEE HAS IMPLEMENTED AN INFRASTRUCTURE PROJECT FOR THE GOVT. ON A TURNKEY BASIS AND HAS ALSO BEEN ENGAGED IN ITS OPERATION AND MGT. SUCH ARRANGEMENT IS TYPICAL TO INFRASTRUCTURE DEVELOPMENT PROJECT OF THE GOVT. AND CANNOT BE SEEN AS MERE WORKS CONTRACT. CASE ADJOURNED TO 17.08.2015. INSP. TO PLACE COPY OF FILE NOTINGS ON ALL FILES OF CONNECTED RELEVANT ASSESSMENT YEARS IN THE CASE.' 11. THE LD. COUNSEL OF THE ASSESSEE ALSO DREW OUR ATTENTION TO THE FACT THAT IN THE PRECEDING YEAR I. E. ASSESSMENT YEAR 2010-11 AS ALSO IN THE SUCCEEDING YEAR I.E A.Y 2012-13 & 2013-14, THE ASSESSEE HAD BEEN AL LOWED ITS CLAIM OF DEDUCTION UNDER SECTION 80IA IN THE OR DER 20 PASSED UNDER SECTION 143 (3) OF THE ACT. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, STATED THAT THE CLAIM OF THE ASSESSEE FOR DEDUCTION UNDER SECTION 80IA HAVING B EEN DULY EXAMINED IN THE COURSE OF REGULAR ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER HAVING ALLOWE D THE CLAIM WHICH WAS CONSISTENT WITH THE VIEW TAKEN BY T HE CIT (TDS) WHILE GRANTING CERTIFICATE OF LOWER DEDUCTION OF TAX, THE ASSESSING OFFICER IN THE PRECEDING AND SUCCEEDI NG YEARS, AS ALSO WITH THE VIEW TAKEN BY THE ASSESSING OFFICER IN THE CASE OF ANOTHER ASSESSEE UNDERTAKING IDENTIC AL WORK, IT CANNOT BE SAID THAT ANY ERROR HAD CREPT IN THE ORDER OF THE ASSESSING OFFICER CAUSING PREJUDICE TO THE REVENUE AND THEREFORE THE ACTION OF THE LEARNED PR. CIT IN ASSUMING JURISDICTION UNDER SECTION 263 FOR REVIEWI NG THE ORDER OF THE ASSESSING OFFICER ON THIS COUNT WAS BA D IN LAW AND NEEDED TO BE QUASHED. 12. LD.DR, ON THE OTHER HAND, WE FIND, RELIED UPON THE ORDER OF THE LEARNED PR. CIT AND STATED THAT TH E ASPECT OF APPLICATION OF EXPLANATION TO SUB-SECTION (13) O F SECTION 80IA, TO THE CONTRACT AWARDED TO THE ASSESSEE WAS N OT EXAMINED BY THE ASSESSING OFFICER WHICH BEING CRUCI AL TO THE CLAIM OF DEDUCTION UNDER SECTION 80IA, AN ERROR HAD CREPT INTO THE ORDER OF THE ASSESSING OFFICER AND S INCE APPARENTLY THE PROJECT UNDERTAKEN BY THE ASSESSEE W AS COVERED UNDER THE DEFINITION OF WORKS CONTRACT TH E ASSESSEE HAD BEEN WRONGLY GRANTED DEDUCTION UNDER 21 SECTION 80IA CAUSING LOSS TO THE REVENUE AND THUS T HE ACTION OF THE LEARNED PR. CIT WAS JUSTIFIED ON THIS ACCOUNT. 13. WE HAVE HEARD THE CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE ORDER OF THE LEARNED PR. CI T AS ALSO THE DOCUMENTS PLACED AND REFERRED TO BEFORE US . 14. THE ONLY REASON FOR EXERCISING REVISIONARY POWERS UNDER SECTION 263 IN THE PRESENT CASE IS THA T THE ASSESSING OFFICER HAD NOT EXAMINED THE CLAIM OF THE ASSESSEE TO DEDUCTION UNDER SECTION 80IA(4) VIS-A-V IS EXPLANATION 13 TO THE SAID SECTION WHICH EXCLUDES P ROFITS EARNED FROM WORKS CONTRACTS FROM DEDUCTION UNDER SE CTION 80IA(4) OF THE ACT. 15. ON THIS ACCOUNT WE ARE UNABLE TO AGREE WITH TH E LEARNED PR. CIT. IT IS AMPLY CLEAR FROM THE PLEADI NGS AND DOCUMENTS PLACED BEFORE US BY THE LD.COUNSEL FOR TH E ASSESSEE THAT THE SAID ISSUE WAS RAISED DURING ASSE SSMENT PROCEEDINGS, DUE INQUIRIES WERE MADE AND AFTER PROP ER APPLICATION OF MIND THE ASSESSING OFFICER ALLOWED T HE CLAIM OF THE ASSESSEE. 16. WE FIND THAT THE ASSESSEE HAD FILED RETURN OF INCOME CLAIMING DEDUCTION UNDER SECTION 80IA AMOUNT ING TO RS.12,11,810/-. CERTIFICATE IN FORM NO.10CCB, CERTIFYING THE ASSESSEES CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE SAME AMOUNT WAS ALSO FILED GIVING ALL D ETAILS OF HE UNDERTAKING CLAIMING THE SAID DEDUCTION. FUR THER, DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS 22 SPECIFICALLY ASKED TO PROVIDE COMPLETE DETAILS OF T HE CONTRACT UNDERTAKEN FOR PROVIDING LIFT WATER SITE S CHEME FROM EXECUTIVE ENGINEER, IPH, THE INCOME FROM WHICH WAS CLAIMED EXEMPT UNDER SECTION 80IA OF THE ACT. THE ASSESSEE WAS ALSO SPECIFICALLY ASKED TO PROVE HIS ELIGIBILITY FOR SUCH CLAIM WHEN THE ACTIVITIES WERE BEING UNDERTAKEN UNDER CONTRACT. THUS SPECIFIC AND POINTE D QUERIES VIS-A-VIS ELIGIBILITY OF CLAIM OF DEDUCTION U/S 80IA WERE RAISED AND THE ASSESSEE WAS SPECIFICALLY ASKED TO JUSTIFY ITS CLAIM IN THE LIGHT OF UNDERTAKING THE W ORK UNDER CONTRACT MEANING THEREBY THAT IT WAS A WORKS CONTRACT. 17. IN REPLY TO THE SAME, THE ASSESSEE FURNISHED COMPLETE DETAIL OF THE WORK UNDERTAKEN STATING THAT IT HAD UNDERTAKEN CONTRACT FOR PROVIDING LIFT WATER SUPPLY SCHEME FROM THE EXECUTIVE ENGINEER, IRRIGATION & PU BLIC HEALTH DIVISION, THURAL, DISTT. KANGRA ON ACCOUNT O F PROVIDING REHABILITATION AND SOURCE LEVEL AGUMENTAT ION OF VARIOUS SCHEMES IN DIFFERENT TEHSILS OF DISTRICT KA NGRA. THE ASSESSEE, WE FIND, HAD ALSO STATED THAT THE COM PLETE CONSTRUCTION OF THE PROJECT ALONGWITH OPERATION AND MAINTENANCE OF THE WHOLE SCHEME WAS TO BE UNDERTAKE N BY IT. COMPLETE DETAIL OF THE CONSTRUCTION WORK TO B E UNDERTAKEN WAS ALSO GIVEN AND IT WAS REITERATED THA T THE POST-COMPLETION OPERATION AND MAINTENANCE OF THE WH OLE SCHEME FOR 16 MONTHS INCLUDING AUTOMATION WAS THE RESPONSIBILITY OF THE ASSESSEE UNDER THE SCHEME. T HE 23 ASSESSEE HAD CLARIFIED THAT IT WAS A COMPOSITE PROJ ECT AWARDED TO IT AND THUS WAS COVERED UNDER SECTION 80 IA OF THE ACT. THUS, THE ASSESSEE HAD CLARIFIED THAT IT WAS NOT MERELY WORKS CONTRACT AWARDED TO IT BUT A PROJECT A WARDED TO IT WAS ON A TURNKEY BASIS WHICH INCLUDED POST- COMPLETION OPERATION AND MAINTENANCE OF THE SAME AL SO FOR A SPECIFIED PERIOD. COPY OF THE CONTRACT WAS A LSO PLACED BEFORE THE ASSESSING OFFICER. THE ASSESSEE HAD ALSO CLARIFIED THAT THE IMPUGNED DEDUCTION UNDER SE CTION 80IA WAS FIRST CLAIMED BY IT IN ASSESSMENT YEAR 201 0-11 AND THE YEAR UNDER REFERENCE WAS THE SECOND YEAR FO R CLAIMING THE SAID DEDUCTION. 18. IT IS AMPLY CLEAR FROM THE ABOVE THAT NECESSAR Y ENQUIRIES REGARDING THE ASSESSEES CLAIM FOR DEDUCT ION UNDER SECTION 80IA OF THE ACT VIS--VIS THE LIFT WA TER SITE SCHEME CONTRACT RECEIVED FROM THE EXECUTIVE ENGINEE R, IPH, DISTRICT KANGRA WERE MADE DURING THE ASSESSMEN T PROCEEDINGS BY THE ASSESSING OFFICER. FURTHER ALL NECESSARY EXPLANATIONS REGARDING THE CLAIM OF DEDUC TION ALONGWITH EVIDENCES WERE PLACED BY THE ASSESSEE TO PROVE ITS CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE AC T. THEREFORE, FOR ALL PURPOSES, IT CAN BE SAID THAT TH E CLAIM OF THE ASSESSEE HAD BEEN DULY VERIFIED DURING THE ASSESSMENT PROCEEDINGS. CLEARLY THE CONTENTION OF T HE LEARNED PR. CIT THAT NO ENQUIRIES WERE MADE IS INCO RRECT. 19. WE MAY ADD THAT IT CANNOT ALSO BE A CASE OF INADEQUATE ENQUIRY. ALL EXPLANATIONS AND EVIDENCES WERE 24 PLACED BEFORE THE ASSESSING OFFICER TO EXPLAIN THE NATURE OF THE CONTRACT AND DEMONSTRATE THAT IT WAS NOT MER ELY A WORKS CONTRACT. WE FAIL TO UNDERSTAND WHAT FURTH ER INQUIRY WAS REQUIRED TO BE MADE IN THE CASE TO SETT LE THE ISSUE OF THE NATURE OF CONTRACT OR FOR THAT MATTER HOW THE PRESENT INQUIRY WAS NOT ADEQUATE TO ARRIVE AT THE C ORRECT CONCLUSION. MOREOVER WE FIND THAT EVEN THE LEARNED PR. CIT HAS NOT SPELT OUT THE SAME IN HIS ORDER. EVEN BEFORE US THE LD. DR HAS FAILED TO SHOW HOW THE INQUIRY MA DE WAS INADEQUATE AND WHAT FURTHER INVESTIGATION WAS REQUIRED IN THE MATTER OR WHY ON THE BASIS OF EXPLA NATION AND EVIDENCES FILED BY THE ASSESSEE THE CORRECT NAT URE OF THE CONTRACT COULD NOT BE DEDUCED. IN SUCH CIRCUMSTANCES, WE HOLD, IT CANNOT BE SAID THAT THER E WAS ANY ERROR IN THE ORDER OF THE ASSESSING OFFICER SO AS TO CAUSE PREJUDICE TO THE REVENUE. 20. MOREOVER, WE FIND THAT AFTER GOING THROUGH THE REPLIES FILED BY THE ASSESSEE THE ASSESSING OFFICER DISCUSSED THE SAME IN HIS ASSESSMENT ORDER AND RECO RDED HIS SATISFACTION REGARDING THE ASSESSEES CLAIM FOR SUCH DEDUCTION STATING THAT THE ACTIVITY UNDERTAKEN BY T HE ASSESSEE CLARIFIES FOR DEDUCTION UNDER SECTION 80IA OF THE ACT. THE ASSESSING OFFICER FURTHER ADDED THAT THIS WAS THE SECOND YEAR OF CLAIM OF DEDUCTION SINCE THE ASSESSE E COMPANY HAD BEEN AWARDED THE SAME PROJECT BY THE SA ME GOVERNMENT. THUS, WE FIND THAT THE ASSESSING OFFIC ER AFTER HAVING APPLIED HIS MIND TO THE EXPLANATIONS A ND 25 EVIDENCES FILED BY THE ASSESSEE ARRIVED AT A LOGICA L AND REASONABLE CONCLUSION THAT THE ASSESSEE WAS ELIGIBL E TO CLAIM DEDUCTION UNDER SECTION 80IA OF THE ACT AS IT S ACTIVITY QUALIFIED FOR THE SAID CLAIM. WE FIND THA T THE VIEW TAKEN BY THE ASSESSING OFFICER IS A PLAUSIBLE VIEW SINCE AS DEMONSTRATED BEFORE US, THE ASSESSEE HAD BEEN GRANT ED A CERTIFICATE OF LOWER DEDUCTION OF TAX FOR ASSESSMEN T YEARS 2010-11 TO 2013-14 AFTER CONSIDERING THE ELIGIBILIT Y OF THE CLAIM OF THE ASSESSEE TO DEDUCTION UNDER SECTION 80 IA OF THE ACT. THE ASSESSEE HAS ALSO DEMONSTRATED BEFORE US THAT IN THE PRECEDING AND SUCCEEDING ASSESSMENT YEA RS, IDENTICAL CLAIM ON ACCOUNT OF VERY SAME PROJECT HAD BEEN ALLOWED TO IT BY THE ASSESSING OFFICER AND ALSO THA T FOR IDENTICAL PROJECT ANOTHER ASSESSING OFFICER HAD GRA NTED DEDUCTION UNDER SECTION 80IA OF THE ACT TO A SISTER CONCERN OF THE ASSESSEE M/S KAVERI INFRASTRUCTURES PVT. LTD. IN COLLATERAL PROCEEDINGS BEFORE THE DCIT, FOR THE ASSESSMENT YEARS 2008-09 TO 2011-12, THAT TOO AFTER EXERCISING POWERS UNDER SECTION 133(6) AND RECEIVIN G CLARIFICATION FROM THE EXECUTIVE ENGINEER, IPH, ON PERUSAL OF WHICH THE ASSESSING OFFICER FOUND THAT THE CONTR ACT WAS ON BUILT OPERATE TRANSFER (BOT) BASIS AND NOT IN TH E NATURE OF WORKS CONTRACT AND THAT THE PROJECT WAS O N TURNKEY BASIS IN WHICH THE ASSESSEE WAS INVOLVED IN OPERATION AND MANAGEMENT ALSO. THE AO IN THAT CASE ALSO NOTED THAT SUCH ARRANGEMENTS WERE TYPICAL FOR INFRASTRUCTURE DEVELOPMENT PROJECTS OF THE GOVERNME NT AND CANNOT BE SEEN AS MERE WORKS CONTRACT. ALL THE SE 26 FACTS HAVE NOT BEEN REBUTTED BY THE LD. DR BEFORE U S. THEREFORE, WITHOUT ANY DOUBT IT CAN BE SAID THE VIE W TAKEN BY THE ASSESSING OFFICER WITH REGARD TO THE CLAIM O F THE ASSESSEE UNDER SECTION 80IA OF THE ACT WAS A PLAUSI BLE VIEW. 21. INTERESTINGLY, WE FIND ,THAT ALL THE EXPLANATI ONS AND EVIDENCES WHICH WERE FILED BEFORE THE AO BY THE ASSESSEE TO SUPPORT ITS CLAIM OF DEDUCTION U/S 80IA WAS ALSO FILED BEFORE THE LEARNED PR. CIT AND DESPITE S O THERE IS NOT A WHISPER IN THE ENTIRE ORDER AS TO HOW THE VIEW OF THE AO THAT IT WAS AN INFRASTRUCTURE PROJECT AND NO T WORKS CONTRACT, IS INCORRECT. THE LEARNED PR. CIT HAS NO T REFERRED TO A SINGLE DOCUMENT, CLAUSE OR OTHERWISE OF THE AGREEMENT TO LEND CREDENCE TO HIS VIEW. THE ENTIRE THRUST OF THE LEARNED PR. CIT IN EXERCISING REVISIONARY PO WERS IS THAT ADEQUATE ENQUIRY VIS--VIS CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT WAS NOT CARRIED OUT, WHICH AS WE HAVE STATED ABOVE, THE LD. COUNSEL FOR THE ASSESSEE HAS DEMONSTRATED IS INCORRECT. ADEQUATE ENQUIRIES WERE CARRIED OUT, ADEQUATE REPLIES WERE FILED BY THE ASS ESSEE AND THE ASSESSING OFFICER AFTER HAVING APPLIED HIS MIND TO THE EXPLANATIONS AND EVIDENCES FILED BY THE ASSESSE E HAD ARRIVED AT A PLAUSIBLE CONCLUSION THAT THE ASSESSEE WAS UNABLE TO DEDUCTION UNDER SECTION 80IA OF THE ACT. WE ARE, THEREFORE, IN COMPLETE AGREEMENT WITH THE LD. COUNSEL OF THE ASSESSEE THAT THE ISSUE WAS EXAMINED AND VER IFIED DURING ASSESSMENT PROCEEDINGS AND THE ASSESSING OFF ICER 27 HAD ARRIVED AT A PLAUSIBLE CONCLUSION THAT ON THE B ASIS OF THE VERIFICATION CARRIED OUT BY IT THAT THE ASSESS EE WAS ELIGIBLE TO CLAIM DEDUCTION UNDER SECTION 80IA OF T HE ACT AND THEREFORE THERE WAS NO ERROR IN THE ORDER OF TH E ASSESSING OFFICER SO AS TO CAUSE PREJUDICE TO THE R EVENUE. THE ACTION OF THE LEARNED PR. CIT IN EXERCISING HIS REVISIONARY POWERS ON THIS GROUND IS SET ASIDE. 22. BESIDES THE ABOVE ARGUMENT LD. COUNSEL FOR THE ASSESSEE ALSO ARGUED BEFORE US THAT THE ISSUE OF EL IGIBILITY OF CLAIM OF DEDUCTION UNDER SECTION 80IA OF THE ACT HAVING BEEN EXAMINED IN THE 1 ST YEAR OF CLAIM OF THE ASSESSEE I.E. AY 2010-11, THE SAME COULD NOT HAVE BEEN DISTURBED IN THE SUCCEEDING YEARS. IN SUPPORT OF ITS CONTENTION THE LD. COUNSEL RELIED UPON THE DECISION OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VERSUS MICRO INSTRUMENT COMPANY IN ITA. NO. 958/2008 DATED 2.9.2 016 MORE SPECIFICALLY AT PARA 12 OF ITS ORDER HAD STATE D AS FOLLOWS: 12. HOWEVER, WHILE UNDERTAKING THIS EXERCISE, THE ASSESSING OFFICER IS NOT ENTITLED TO REOPEN AN ISSUE THAT HAD BEEN DECIDED IN RESPECT OF A PREVIOUS ASSESSMENT YEAR. IN OTHER WORDS, AN ASSESSING OFFICER IS NOT ENTITLED TO QUESTION THE VALIDITY OF THE GRANT OF A DEDUCTION UNDER SECTION 80-IB IN A PREVIOUS ASSESSMENT YEAR ON ANY GROUND. THE ASSESSING OFFICER WOULD NOT BE ENTITLED TO SAY THAT A PARTICULAR CONDITION WAS NOT FULFILLED IN AN EARLIER ASSESSMENT YEAR IF THE ASSESSEE HAD BEEN GRANTED THE DEDUCTION IN THAT YEAR. THE ASSESSING OFFICER, THEREFORE, CANNOT 28 DENY A DEDUCTION IN THE ASSESSMENT YEAR IN QUESTION BEFORE HIM ON THE GROUND THAT THE ASSESSEE HAD FAILED TO FULFILL A CONDITION PRECEDENT TO THE GRANT OF A DEDUCTION IN ANOTHER ASSESSMENT YEAR. THAT WOULD AMOUNT TO AN ASSESSING OFFICER REOPENING AN ASSESSMENT IN RESPECT OF ANOTHER ASSESSMENT YEAR WITHOUT FOLLOWING THE PROVISIONS OF THE ACT. 23. LD.DR, ON THE OTHER, HAND RELYING UPON PARA 11 OF THE ORDER STATED THAT CERTAIN ISSUES COULD HAVE BEEN DISTURBED IN THE SUCCEEDING YEARS ALSO. LD.DR STAT ED THAT MERELY BECAUSE THE ASSESSEE HAD BEEN ALLOWED CLAIM IN THE 1 ST YEAR DID NOT MEAN THAT THE SAME FOR ALL PURPOSES COULD NOT BE DISTURBED IN THE SUCCEEDING YEARS AT A LL. 24. WE HAVE GONE THROUGH THE ORDER OF THE JURISDICTIONAL HIGH COURT RELIED UPON BY BOTH THE P ARTIES AND FIND MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR THE ASSESSEE. THERE IS NO DISPUTE ABOUT THE FACT THAT I N THE PRECEDING ASSESSMENT YEAR I.E. AY 2010-11, WHICH WA S THE 1 ST YEAR OF CLAIM OF DEDUCTION UNDER SECTION 80IA, THE ASSESSEE WAS ALLOWED THE SAME UNDER SECTION 143 (3 ) OF THE ACT. THIS MEANS THAT FOR ALL PURPOSES THE CLAIM OF THE ASSESSEE HAVING BEEN EXAMINED IN THE LIGHT OF THE PARAMETERS OF ELIGIBILITY LAID DOWN UNDER SECTION 8 0IA, IT COULD NOT BE SAID THAT IN THE SUCCEEDING YEAR THOSE VERY SAME PARAMETERS HAD CHANGED ON THE SAME SET OF FACT S. THE ASSESSING OFFICER, AFTER CONSIDERING ALL THE DO CUMENTS PLACED BEFORE IT, HAD IN THE PRECEDING YEAR CONCLUD ED THAT THE ASSESSEE WAS CARRYING OUT AN INFRASTRUCTURE REL ATED 29 PROJECT WHICH WAS NOT IN THE NATURE OF WORKS CONTRA CT AS DEFINED UNDER SECTION 80IA, READ WITH EXPLANATION-1 3 AND THUS THE ASSESSEE WAS ELIGIBLE TO CLAIM DEDUCTION U NDER SECTION 80IA OF THE ACT. IN THE IMPUGNED CASE, WHIC H IS THE SUCCEEDING YEAR, ON THE VERY SAME SET OF FACTS THE FINDINGS OF THE PRECEDING YEAR ON THE FACT THAT THE ASSESSEE WAS CARRYING OUT ELIGIBLE INFRASTRUCTURE P ROJECT AND NOT WORKS CONTRACT, CANNOT NOW BE DISTURBED, W HICH IS EXACTLY WHAT HAS BEEN STATED BY THE HIGH COURT I N THE ORDER PASSED IN THE CASE OF MICRO INSTRUMENT COMPAN Y (SUPRA). FOLLOWING THE SAME ALSO WE HOLD THAT THE LEARNED PR. CIT COULD NOT HAVE EXERCISED HIS REVISIONARY PO WERS SINCE THE CLAIM OF THE ASSESSEE HAD BEEN DECIDED IN THE PRECEDING YEAR ITSELF AND WITHOUT DISTURBING THE SA ME IT COULD NOT HAVE BEEN DISLODGED IN THE IMPUGNED YEAR. 25. IN VIEW OF THE ABOVE WE SET ASIDE THE ORDER OF THE LEARNED PR. CIT ON THIS COUNT. 26. THE 2 ND ISSUE RAISED BY THE LEARNED PR. CIT IS THAT THE ASSESSEE HAS CLAIMED 80IA ON PROFITS DERIV ED FROM THE PROJECT OF WATER SUPPLY AND FROM THE PERUSAL OF THE TRADING ACCOUNT IT IS SEEN THAT A PAYMENT OF RS.2,92,48,936/-HAD BEEN MADE FOR JOB WORK DONE BY SUBCONTRACTORS. AS PER THE LEARNED PR. CIT PROPORTI ONATE PROFITS EARNED ON THE JOB WORK EXECUTED BY A SUBCONTRACTOR WAS NOT ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA AND SINCE THIS ISSUE HAD NOT BEEN EXAMINED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT 30 PROCEEDINGS IT HAD RESULTED IN LOSS OF REVENUE CAUS ING PREJUDICE TO THE REVENUE. 27. BEFORE US LD. COUNSEL OF THE ASSESSEE REITERAT ED THE CONTENTIONS MADE IN RELATION TO THE PREVIOUS I SSUE THAT THE EXAMINATION OF THE CLAIM OF THE ASSESSEE F OR DEDUCTION UNDER SECTION 80IA HAD BEEN DONE IN DETA IL BY THE ASSESSING OFFICER AND AFTER EXAMINING THE SAME THE ASSESSING OFFICER HAD ALLOWED THE CLAIM. THE LD. C OUNSEL FOR THE ASSESSEE STATED THAT IT CANNOT NOW BE SAID THAT THE CLAIM OF THE ASSESSEE HAD NOT BEEN DULY EXAMINED BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS. TH E LD. COUNSEL OF THE ASSESSEE FURTHER STATED THAT THE JOB WORK DONE BY SUBCONTRACTORS WAS NOT A SEPARATE CONTRACT BUT SUB CONTRACT OF THE MAIN PROJECT AWARDED TO IT AND THE ASSESSEE AS PER THE PROVISIONS OF SECTION 80IA WAS ENTITLED TO CLAIM DEDUCTION OF THE ENTIRE PROFITS EARNED BY IT ON THE PROJECT EXECUTED ON INFRASTRUCTURE DEVELOPMENT. THE FACT THAT IT HAD SUB-CONTRACTED A PART OF THE WORK DID NOT AFFECT ITS CLAIM OF DEDUCTION OF THE ENTIRE PROFITS AND THE SUB CONTRACT WORK COULD NOT BE TREATED AS SEPARATE FOR THE PURPOSE OF CLAIMING DEDUCTION UNDER SECTION 80IA OF THE ACT. 28. LD.DR, ON THE OTHER HAND, RELIED UPON THE ORDE R OF THE LEARNED PR. CIT AND STATED THAT THE PROFITS EARNED ON THE SUB CONTRACT WORK WERE NOT ELIGIBLE FOR DEDU CTION UNDER SECTION 80IA OF THE ACT AND THE SAME HAVING N OT BEEN EXAMINED BY THE ASSESSING OFFICER AN ERROR HA D 31 CREPT IN THE ORDER OF THE ASSESSING OFFICER CAUSING PREJUDICE TO THE REVENUE BY ALLOWING THE ASSESSEE C LAIM OF DEDUCTION OF PROFITS UNDER SECTION 80IA ON THE SAME . 29. HAVING HEARD THE RIVAL CONTENTIONS, WE FIND MERIT IN THE CONTENTIONS MADE BY THE LD. COUNSEL FO R THE ASSESSEE. IT IS NOT DISPUTED THAT THE ASSESSEE HAD BEEN AWARDED A CONTRACT FOR INFRASTRUCTURE DEVELOPMENT. THE ASSESSEE HAS STATED THAT A PART OF THE WORK WAS SUBCONTRACTED FOR EASE IN EXECUTION IN THE ENTIRE PROJECT. THIS FACT HAS NOT BEEN REBUTTED BY THE LEARNED PR. CIT. THEREFORE, IT REMAINS THAT THE PROFIT EARNED BY THE ASSESSEE AS A WHOLE WAS ON ACCOUNT OF THE PROJECT O F DEVELOPMENT OF INFRASTRUCTURE AND THE ASSESSEE WAS ENTITLED TO CLAIM DEDUCTION UNDER SECTION 80IA OF T HE SAME. EVEN OTHERWISE WE FIND THAT THE ASSESSEES CL AIM FOR DEDUCTION UNDER SECTION 80IA WAS DULY EXAMINED BY T HE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS AND ALLOWED BY HIM ALSO. AS STATED ABOVE THE ASSESSEES CLAIM HAD BEEN ALLOWED BOTH IN THE PRECEDING YEAR AND IN THE SUCCEEDING YEAR ALSO. ON A QUERY RAISED BY THE BENC H WHETHER THE ASSESSEE HAD BEEN SUBCONTRACTING WORK I N THE PRECEDING AND SUCCEEDING YEARS ALSO, THE LD. COUNSE L OF THE ASSESSEE STATED AT THE BAR THAT THE ASSESSEE H AD BEEN SUBCONTRACTING WORK IN ALL YEARS ALSO. FROM THE AFO RESAID IT IS EVIDENT THAT THE ASSESSEES CLAIM FOR DEDUCTI ON UNDER SECTION 80IA WAS EXAMINED IN ALL RESPECTS BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT 32 PROCEEDINGS AND DULY ALLOWED. MOREOVER THE FACT TH AT THE ASSESSEE HAD BEEN ALLOWED DEDUCTION ON THE SAME PAT TERN IN THE PRECEDING AND SUCCEEDING YEARS LENDS CREDENC E TO THE ALLOWANCE OF THE CLAIM BY THE ASSESSING OFFICER IN THE IMPUGNED YEAR ALSO. FURTHER WE FIND THAT THE LEARNE D PR. CIT HAS NO BASIS AT ALL FOR STATING THAT THE PROFIT EARNED ON ACCOUNT OF JOB WORK GOT DONE BY SUBCONTRACTORS W AS A SEPARATE CONTRACT WHICH WAS NOT ELIGIBLE FOR DEDUCT ION UNDER SECTION 80IA OF THE ACT. WHAT CAN BE GATHERED FROM THE FINDINGS OF THE LEARNED PR. CIT IS THAT THE ASS ESSEE IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80IA ONLY ON A CCOUNT OF WORK/CONTRACT/PROJECT EXECUTED BY IT. WE FIND T HAT THIS UNDERSTANDING OF THE PROVISIONS OF SECTION 80IA IS INCORRECT AND HAS NO JUDICIAL PRECEDENTS AT ALL AND ON ACCOUNT OF THE SAME WE HOLD THAT THERE IS NO ERROR IN THE ORDER OF THE ASSESSING OFFICER ON THIS COUNT ALSO A ND SET ASIDE THE SAME FOR THIS REASON. 30. THE 3 RD REASON GIVEN BY THE LEARNED PR. CIT FOR EXERCISING REVISIONARY POWERS UNDER SECTION 263 IS THAT WHILE THE RECEIPTS FROM THE WATER SUPPLY PROJECT AN D HAMIRPUR BYPASS PROJECT IN THE RATIO OF 2.8:1, THE EXPENSES INCURRED ON FREIGHT AND CARRIAGE, FUEL AND WAGES AND SALARY ARE COMPARATIVELY HIGHER IN CASE OF HAMI RPUR BYPASS PROJECT AND THE COMPARATIVE DETAILS HAVE NOT BEEN EXAMINED BY THE ASSESSING OFFICER VIS-A-VIS THE PRO VISIONS OF SECTION 80IA(8)/80IA(10) OF THE INCOME TAX ACT, 1961 33 CAUSING ERROR IN THE ORDER OF THE ASSESSING OFFICER AND PREJUDICE TO THAT EXTENT. 31. THE LD. COUNSEL OF THE ASSESSEE REITERATED HIS ARGUMENTS MADE ON ACCOUNT OF POINT NO.1 RAISED BY T HE LEARNED PR. CIT WHILE LD. DR RELIED UPON THE ORDER OF THE LEARNED PR. CIT IN THIS REGARD. 32. HAVING HEARD THE ARGUMENTS OF BOTH THE PARTIES AS ALSO THE ISSUE RAISED BY THE LEARNED PR. CIT WE FIND FROM A BARE PERUSAL OF THE SAME THAT IT IS NOT EVID ENT AS TO WHAT IS THE ERROR THAT HAS OCCURRED IN THE ORDER. I N FACT THE LEARNED PR. CIT IS MERELY PRESUMING THAT AN ERR OR MAY HAVE OCCURRED IN THE ORDER. WHILE THE LEARNED PR. C IT HAS POINTED OUT THAT THE RECEIPTS FROM THE TWO PROJECT S IS IN THE RATIO OF 2.8:1, IT IS NOT SPECIFIED THE RATIO I N WHICH THE EXPENSES HAVE BEEN BIFURCATED BETWEEN THE TWO PROJE CTS TO HIGHLIGHT THE ERROR WHICH HAS OCCURRED IN THE ORDER . FURTHER IT IS ALSO NOT CLEAR FROM THE ORDER OF THE LEARNED PR. CIT AS TO HOW THE PROVISIONS OF SECTION 80IA(8)/80IA(10) OF THE INCOME TAX ACT, 1961 ARE ATTRACTED IN THE IMPUGNED ISSUE. THE PROVISIONS OF SECTION 80IA(8)/80IA(10) ARE ATTRACTED ONLY BETWEEN TRANSA CTIONS THAT TAKE PLACE BETWEEN AN ELIGIBLE AND NON-ELIGIBL E ENTITY. LEARNED PR. CIT HAS NOT POINTED OUT AS TO WHICH AMO NG THE TWO PROJECTS ARE ELIGIBLE AND WHICH IS NOT ELIGIBLE . HAVING NOT POINTED OUT THE SAME WE FAIL TO UNDERSTAND HOW THE LEARNED PR. CIT CAME TO THE CONCLUSION THAT AN ERRO R HAD OCCURRED IN THE ORDER VIS-A-VIS THE APPLICABILITY O F THE 34 PROVISIONS OF SECTION 80IA(8)/80IA (10) OF THE ACT AND SO WE FIND THAT THE LEARNED PR. CIT HAS FAILED TO POIN T ANY ERROR IN THE ORDER OF THE ASSESSING OFFICER IN THI S REGARD. FURTHER AS STATED ABOVE THE ISSUE HAD BEEN EXAMINED DURING ASSESSMENT PROCEEDINGS AS HELD ABOVE BY US AND THEREFORE THERE WAS NO ERROR IN THE ORDER OF THE AS SESSING OFFICER. WE THEREFORE SET ASIDE THE ORDER OF THE L EARNED PR. CIT ON THIS COUNT ALSO. 33. IN VIEW OF THE ABOVE WE SET ASIDE THE ORDER OF THE LEARNED PR. CIT ON ALL THE THREE COUNTS RAISED IN HIS ORDER AND ALLOW THE APPEAL OF THE ASSESSEE. 34. IN THE RESULT APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (BHAVNESH SAINI) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 6 TH FEBRUARY, 2017 *RATI* COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT 5. THE DR ASSISTANT REGISTRAR, ITAT, CHANDIGARH