Dy. Commissioner of Income Tax, Lucknow V. M/s Technical Associates Ltd., Lucknow

ITA 842/LKW/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100469 (ITAT-LUCKNOW)
• Duration Of Justice: 11 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 20-10-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 21-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ROHIT BHALLA
• Keywords: Reopening of assessment; Difference of opinion; Assessment record; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148; 6

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NOS.842/LKW/2014 ASSESSMENT YEAR 2009-10 M/S TECHNICAL ASSOCIATES LTD. 8 TH K.M. RSM MARG, FAIZABAD ROAD, ISMAILGANJ, LUCKNOW PAN AABCT 7365 F VS DCIT, RANGE - VI, LUCKNOW (RESPONDENT) (APPELLANT) SHRI AMIT NIGAM, DR APPELLANT BY SHRI ROHIT BHALLA, CA RESPONDENT BY 20 / 10 /2015 DATE OF HEARING 19 / 1 1 /2015 DATE OF PRONOUNCEMENT O R D E R PER SUNIL KUMAR YADAV, JM. 1. THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST THE ORDER OF THE LD. CIT(A)-II, INTERALIA ON FOLLOWING GROUNDS :- 1. THE COMMISSIONER OF INCOME TAX (APPEALS), LUCKN OW HAS ERRED IN LAW AND ON FACTS OF THE CASE THAT THE INIT IATION OF PROCEEDING U/S 147 AND ISSUANCE OF NOTICE U/S 148 O F THE INCOME TAX ACT, 1961 IS BAD IN LAW AND CONTRARY TO THE PROVISIONS OF THE ACT, SIMPLY RELYING ON THE SUBMIS SION OF ASSESSEE MADE BEFORE HIM. THE CIT(A) FAILED TO APPR ECIATE THAT THE ASSESSEE DID NOT DISCLOSE COMPLETE FACTS D URING THE COURSE OF ASSESSMENT PROCEEDING BY NOT FURNISHING S EPARATE TAX AUDIT REPORT IN FORM NO.1OCCB FOR SITARGANJ UNI T AS PRESCRIBED UNDER RULE 18BBB OF THE INCOME TAX ACT, 1962. 2 2. THE COMMISSIONER OF INCOME TAX (A), LUCKNOW HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DELETING THE ADD ITION MADE ON ACCOUNT OF DISALLOWANCE OF DEDUCTION U/S 80 IC AT RS.1,50,09,117/- AS THE ASSESSEE DID NOT QUALIFY FO R 'SUBSTANTIAL EXPANSION' AS DEFINED IN SECTION-80IC( 8)(IX) OF THE INCOME TAX ACT, 1961. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY ONE OR MORE OF THE GROUNDS OF APPEALS, AS STATED ABOVE, AS AND WHEN NEED TO DO SO ARISES WITH THE PRIOR PERMISSION OF . THE COURT. 2. THE FACTS IN BRIEF BORN OUT FROM THE ORDERS OF T HE LOWER AUTHORITIES ARE THAT THE ASSESSEE HAS FILED E-RETUR N, DECLARING TOTAL INCOME OF RS.24,14,81,160/- AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT, ASSESSING THE TOTAL INCOME OF RS .24,19,80,973/-. HAVING FORMED A BELIEF ON THE BASIS OF ASSESSMENT F RAMED FOR THE AY 2010-11 THAT THE ASSESSEE DOES NOT DISCLOSE THE COM PLETE FACTS NECESSARY FOR THE AY 2009-10 AND HAS WRONGLY CLAIME D DEDUCTION U/S 80IC OF THE ACT FOR AY 2009-10 IN RESPECT OF SITARG ANJ UNIT, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 OF THE ACT AND REOPENED THE ASSESSMENT. IN COMPLIANCE OF NOTICE U/S 148 OF THE ACT, THE ASSESSEE SUBMITTED THAT THE RETURN OF INCOME ALREADY FILED O N 30.09.2009 FOR AY 2009-10, MAY BE TREATED TO BE INCOMPLIANCE TO THIS NOTICE. WITH REGARD TO CLAIM OF DEDUCTION U/S 80IC OF THE ACT, IT WAS C ONTENDED THAT AS FAR AS SITARGANJ UNDERTAKING AT UTTRANCHAL IS CONCERNED , THERE WAS NO OPENING BALANCE OF PLANT & MACHINERY AND THE ENTIRE AMOUNT REFLECTION AS GROSS BOOK VALUE (BEFORE TAKING INTO ACCOUNT DEP RECIATION) IS ON ACCOUNT OF ADDITIONS AGGREGATING TO RS.37,52,759/- MADE TO PLANT & MACHINERY ALONE IN THE RELEVANT FINANCIAL YEAR, AND SUBSTANTIAL EXPANSION IS TO BE CONSTRUED FOR SITARGANJ UNDERTAK ING ONLY AS THE 3 WORDS PRESENT IN SUB SECTION (2) OF SECTION 80IC OF THE ACT IS UNDERTAKING OR ENTERPRISE ALONE AND NOT ASSESS EE OR ASSESSEE AS A WHOLE. IT WAS FURTHER CONTENDED THAT THE ASSESSMENT OF THE ASSESSEE WAS COMPLETED AFTER NUMEROUS HEARING HAD TAKEN PLAC E AND THE AO HAD EXAMINED ALL POSSIBLE ISSUES INCLUDING CLAIM U/ S 80IC OF THE ACT. THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE EX PLANATION OF THE ASSESSEE AND HAVING OBSERVED THAT THE ASSESSEE DID NOT FILE AUDIT REPORT OF THE SITARGANJ UNIT AND ALSO AN AUDIT REPO RT U/S 80IC OF THE ACT DURING ASSESSMENT PROCEEDINGS FOR AY 2009-10, THERE FORE, THERE WAS NO DISCLOSURE OF RS.37,52,759/-IN PLANT AND MACHINE RY SITARGANJ. THE ASSESSING OFFICER HAS ACCORDINGLY DENIED THE DEDUCT ION U/S 80IC OF THE ACT. 3. THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT( A), ASSAILING THE REOPENING OF ASSESSMENT, ON THE GROUND THAT THE ASSESSING OFFICER HAS ALLOWED DEDUCTION U/S 80IC IN OTHER ASSESSMENT YEARS AND THESE FACTS WERE NOT TAKEN INTO ACCOUNT BY HIM WHILE REOP ENING THE ASSESSMENT. THEREFORE, REOPENING WAS DONE ON THE BA SIS OF CHANGE OF OPINION. ON MERIT ALSO, LD. COUNSEL FOR THE ASSESSE E HAS CONTENDED THAT ASSESSEE HAS FURNISHED TAX AUDIT REPORT ALONGWITH T HE RETURN OF INCOME AND THERE WAS NO REQUIREMENT OF LAW TO PREPARE A SE PARATE TAX AUDIT REPORT FOR THE UNIT ON WHICH DEDUCTION IS CLAIMED. THE ASSESSEE HAS FURNISHED THE DETAILED WRITTEN SUBMISSION AND THE F ACTS OF THE CASE BEFORE THE CIT(A) AND THE CIT(A) HAS RECORDED THE S AME IN HIS ORDER IN PARA 2 TO 8 ON PAGES 2 TO 15 OF HIS ORDER. BEING C ONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE CIT(A) HELD THAT THE AO HAS REOPENED THE ASSESSMENT ON ACCOUNT OF CHANGE OF OPINION. THE REFORE, REOPENING IS BAD. THE CIT(A) HOWEVER, ADJUDICATE THE ISSUE ON MERIT AND BEING 4 CONVINCED WITH THE EXPLANATION OF THE ASSESSEE, THE CIT(A) HAS DELETED THE ADDITION, IN THE LIGHT OF CONSOLIDATED TAX AUDI T REPORT AND SEPARATE FINANCIAL STATEMENT IN RESPECT OF SITARGANJ UNIT FI LED BEFORE HIM. THE RELEVANT OBSERVATIONS OF THE CIT(A) IS HEREUNDER FO R THE SAKE OF REFERENCE: I HAVE EXAMINED THE REASONS RECORDED U/S 147 OF TH E ACT FOR ISSUE OF NOTICE U/S 148, FINDING GIVEN BY THE A.O. IN ASSESSMENT ORDER AND WRITTEN SUBMISSIONS OF APPELLA NT FINDING DURING APPELLATE PROCEEDINGS AND ASSESSMENT RECORDS OF ASSESSMENT YEARS 2009-10 & 2010-11, AND VARIOUS JUD ICIAL PRONOUNCEMENTS AS QUOTED BY THE APPELLANT IN RESPEC T TO CHANGE OF OPINION AS WELL AS FILING OF AUDIT REPORT . ON EXAMINATION OF THE RECORDS IT HAS BEEN OBSERVED THA T THE A.O. HAS INITIATED PROCEEDINGS U/S 147 OF THE ACT WITHOU T PROPER VERIFICATION OF FACTS OF APPELLANT CASE AND PAPERS/ DOCUMENTS INCLUDING TAX AUDIT REPORT AND REPORT OF AUDITOR IN FORM NO. 10CCB IN RESPECT OF CLAIM OF DEDUCTION U/S 80IC OF THE ACT OF RS. 1,50,09,117/- FILED DURING THE ORIGINAL ASSESSM ENT PROCEEDINGS. DURING THE APPELLANT PROCEEDINGS THE APPELLANT WAS DIRECTED TO FURNISH ALL EVIDENCES TO PROVE THE CORRECTNESS A ND GENUINENESS OF THE CLAIM U/S 80IC OF THE ACT OF RS. 1,50,09,117/- . IN COMPLIANCE TO SAID QUERY RAISED THE APPELLANT HAS AGAIN FILED COPY OF TAX AUDIT REPORT, CONSOLIDATED AND SEPARATE FINANCIAL STATEMENT IN RESPECT OF SITA RGANJ UNIT, REPORT IN FORM NO. 10CCB FOR CLAIM OF DEDUCTION U/S 80IC, BILLS & VOUCHERS OF PLANT & MACHINERY INSTALLED IN SITARG ANJ UNIT, COPY OF ALLOTMENT OF LAND AT SITARGANJ, ELECTRICAL CONNECTION CERTIFICATE, REGISTRATION CERTIFICATE WITH CUSTOMS & CENTRAL EXCISE, REGISTRATION WITH DEPARTMENT OF COMMERCIAL TAX, REGISTRATION AND LICENSE WITH LABOUR DEPARTMENT. TH E APPELLANT HAS ALSO PRODUCED EXCISE REGISTERS WHICH HAS BEEN EXAMINED. LOOKING IN TO THESE FACTS & CIRCUMSTANCES, I HOLD T HAT THE A.O. WAS NOT JUSTIFIED IN INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND ACCORDINGLY ISSUE OF NOTICE U/S 148 OF THE ACT CANNOT BE 5 SAID PROPER AND JUSTIFIED AS PER PROVISIONS OF I.T. ACT. THE A.O. HIMSELF EXAMINED ALL THE RELEVANT RECORDS AT T HE TIME OF REGULAR ASSESSMENT PROCEEDING IN RESPECT OF CLAIM O F DEDUCTION U/S IC OF THE ACT OF RS. 1,50,09,117/- . THEREFORE, I FIND MUCH FORCE IN THE ARGUMENT OF APPELLANT THAT T HE INITIATION OF PROCEEDINGS U/S 147 OF THE ACT AND IS SUE OF NOTICE_U/S 148 OF THE ACT IS BAD IN LAW AND CONTRAR Y TO THE PROVISIONS OF IT ACT. THE AO HAS WRONGLY ASSUMED TH E JURISDICTION U/S 147/ 148 OF THE 1,T. ACT. THUS THE GROUND NO.2 RAISED BY THE APPELLANT IS HEREBY ALLOWED. GROUND NO.3 IN RESPECT OF DISALLOWING THE CLAIM U /S 80IC OF THE I.T. ACT AT RS. 1,50,09,117/-. THE A.O. HAS DISALLOWED THE CLAIM MADE BY APPELLANT U/S 80IC OF THE ACT OF RS. 1,50,09117/- ON THE GROUND THAT T HE APPELLANT DID NOT INVEST SUBSTANTIAL EXPANSION IN P LANT & MACHINERY DURING THE ASSESSMENT YEAR UNDER CONSIDER ATION. DURING APPELLATE PROCEEDINGS THE APPELLANT HAS FILE D WRITTEN SUBMISSIONS MENTIONED SUPRA AND CONTENDED THAT THE ASSESSEE COMPANY, FULFILLED ALL THE CONDITIONS LAID DOWN U/S 80IC OF THE ACT. THEREFORE, THE A.O. SHOULD HAVE AL LOWED ITS LEGITIMATE CLAIM MADE U/S 80IC OF THE ACT OF RS. 1, 50,09,117/- . I HAVE EXAMINED THE WRITTEN SUBMISSIONS OF APPELL ANT FILED DURING APPELLATE PROCEEDINGS, FINDING GIVEN BY A.O. IN ASSESSMENT ORDER, ASSESSMENT RECORDS OF A.Y. 2009-1 0 & 2010-11 , SCRUTINY ASSESSMENT ORDER FRAMED U/S 143( 3) OF THE ACT OF A.Y./ 2009-10, 2010-11 AND 2011-12 AND TAX A UDIT REPORTS ALONGWITH ITS ANNEXURES, REPORTS IN FORM NO . 10CCB OF I.T. ACT AND FINANCIAL STATEMENTS OF SITARGANJ UNIT AND I FIND THAT THE A.O. HIMSELF ALLOWED THE CLAIMED OF DEDUCT ION U/S 801C OF THE ACT OF SAME SITARGANJ UNIT IN A.YRS. 20 09-10, 2010-11 & 2011-12. THE REPORT FOR DEDUCTION U/S 801 C OF THE ACT IN FORM NO. 10CCB OF I.T. ACT AGAIN FILED BY TH E APPELLANT DURING REASSESSMENT PROCEEDINGS. BOTH REPORTS FILED IN FORM NO. 10CCB ARE AVAILABLE IN RELEVANT ASSESSMENT FOLD ER. SINCE THE A.O. HIMSELF ALLOWED THE CLAIM OF DEDUCTION U/S 80IC AFTER VERIFICATION FROM RELEVANT RECORDS I.E. COPY OF ITR OF APPELLANT, RELEVANT TAX AUDIT REPORTS & NOTES OF ACCOUNTS GIVE N IN TAX AUDIT REPORT ETC. AS MENTIONED ABOVE IN A.YRS. 2009 -10,2010- 11 & 2011-12, THEREFORE, THERE WAS NO REASON TO WIT HDRAW THE 6 CLAIM U/S 80IC WHICH WAS ALLOWED IN ORIGINAL ASSESS MENT PROCEEDINGS OF A.Y. 2009-10. THE A.O. HAS MENTIONED IN THE REASONS RECORDED U/S 147 OF THE ACT THAT SUBSTANTIA L EXPANSION DID NOT TAKE PLACE IN APPELLANT CASE DURI NG THE ASSESSMENT YEAR UNDER CONSIDERATION. AS EVIDENT FRO M FACTS AVAILABLE ON RECORD AND TAX AUDIT REPORT AND OTHER RELEVANT PAPERS/DOCUMENTS IN RESPECT OF MANUFACTURING AND SA LES OF PRODUCT FROM SITARGANJ UNIT ESTABLISHED THAT THE PR ODUCTION AND SALES WERE DULY EFFECTED IN ASSESSMENT YEAR UND ER CONSIDERATION AND THE APPELLANT HAS EARNED PROFIT F ROM SITARGANJ UNIT OF RS. 1,50,09,117/- . THE A.O. HAS NOT DOUBTED ABOUT THE PRODUCTION, SALES AND PROFIT EARNED FROM THE SITARGANJ UNIT SITUATED AT UTTARAKHAND. I HAVE EXAM INED THE COPY OF P&L A/C AND BALANCE SHEET & ITS ANNEXURES A ND I FOUND THAT THE APPELLANT HAS ESTABLISHED THE COMPLE TE NEW UNIT AT SITARGANJ DURING THE ASSESSMENT YEAR UNDER CONSIDERATION AND MANUFACTURING AND SALES TOOK PLAC E IN THE ASSESSMENT YEAR UNDER CONSIDERATION. SINCE THE ENTI RE INVESTMENT IN SITARGANJ UNIT IN PLANT & MACHINERY O F RS. 37,52,759/- WAS MADE DURING RELEVANT ASSESSMENT YEA R AS COMPARED TO NIL OPENING BALANCE AS ON 01.04.2008 BE ING NEW UNDERTAKING/ ENTERPRISE. KEEPING IN VIEW OF THE SE FACTS THE A.O. HAS WRONGLY INTERPRETED THE PROVISIONS OF 80IC OF THE ACT IN RESPECT OF SUBSTANTIAL INVESTMENT IN PLANT & MACHINERY. SINCE THE APPELLANT ESTABLISHED AT SITARGANJ, UTTAR AKHAND A COMPLETE NEW ENTERPRISE/ UNDERTAKING, WHICH IS EVID ENT FROM VARIOUS REGISTRATION CERTIFICATES OBTAINED BY THE A PPELLANT MENTIONED SUPRA, AND MANUFACTURING OF ARTICLES AND THINGS HAS ALREADY BEEN COMMENCED DURING ASSESSMENT YEAR U NDER CONSIDERATION, THEREFORE, THE CONDITION OF SUBSTANT IAL EXPANSION AS STATED IN THE PROVISIONS OF SUB SECTIO N (8) OF 80IC OF THE ACT IS FULFILLED. THE A.O. HAS NOT PROP ERLY APPRECIATED THE APPLICABILITY OF THE RELEVANT PROVI SIONS OF I.T. ACT, 1961 U/S80IC, LOOKING, INTO THE ABOVE FACTS ON_MERIT ALSO THE DIS ALLOWANCES MADE BY THE AO U/S 80IC OF THE ACT OF RS. 1,50,09,1 17/- CANNOT BE SAID PROPER & JUSTIFIED AND SAME LIABLE T O BE DELETED. THE A.O. IS DIRECTED TO DELETE THE ADDITIO N OF RS.1,50,09,117/-. THE APPELLANT GETS RELIEF OF RS.1,50,09,117/ . 7 4. AGGRIEVED, THE REVENUE HAS PREFERRED AN APPEAL B EFORE THE TRIBUNAL AND PLACED THE HEAVY RELIANCE UPON THE ORD ER OF THE ASSESSING OFFICER, WHEREAS THE LD. COUNSEL FOR THE ASSESSEE H AS INVITED OUR ATTENTION TO THE ASSESSMENT ORDER FOR THE AYS 2011- 12 AND 2012-13 IN WHICH THE CLAIM OF DEDUCTION U/S 80IC RAISED BY THE ASSESSEE WAS THOROUGHLY EXAMINED BY THE ASSESSING OFFICER BEFORE ALLOWING THE SAME. THE COPIES OF THE ORDERS ARE PLACED ON PAGES 195 TO 207 OF THE COMPILATION OF THE ASSESSEE. OUR ATTENTION WAS ALSO INVITED TO THE ASSESSMENT ORDER FOR AY 2012-13 IN WHICH THE ASSESS ING OFFICER HAS RECORDED IN HIS ORDER THAT THE CLAIM OF THE ASSESSE E U/S 80IC OF THE ACT WAS ALSO EXAMINED BY THE AO IN AY 2011-12 BEFORE AL LOWING THE SAME. IT WAS FURTHER CONTENDED THAT THOUGH IN AY 2011-12, THE CLAIM OF THE ASSESSEE WAS ALLOWED BUT THE ASSESSMENT WAS NOT REO PENED BY THE AO U/S 148 OF THE ACT. LD. COUNSEL FOR THE ASSESSEE FU RTHER CONTENDED THAT THE ASSESSING OFFICER HAS RECORDED ALL THE FACTS WH EREFROM IT IS CLEAR THAT THE REOPENING WAS DONE ON ACCOUNT OF CHANGE OF OPINION. 5. ON MERIT, LD. COUNSEL FOR THE ASSESSEE HAS CONTE NDED THAT THERE WAS NO REQUIREMENT OF LAW TO FILE A SEPARATE TAX AU DIT REPORT FOR THE UNIT ON WHICH DEDUCTION IS CLAIMED. ONE CONSOLIDATE D TAX AUDIT REPORT IS SUFFICIENT TO CLAIM THE DEDUCTION U/S 80IC OF THE A CT. AT THE MOST IN ORDER TO DEMONSTRATE THE EXPANSION OF THE UNIT, IND IVIDUAL FINANCIAL STATEMENT MAY BE FILED. THE ASSESSEE HAS FURNISHED THE REQUISITE INFORMATION BEFORE THE ASSESSING OFFICER IN ORDER T O ESTABLISH THAT THERE WAS NO OPENING BALANCE OF PLANT AND MACHINERY IN SI TARGANJ UNDERTAKING AND THE ENTIRE AMOUNT REFLECTING AS GRO SS BOOK VALUE IS ON ACCOUNT OF ADDITIONS AGGREGATING TO RS.37,52,759/- MADE TO PLANT & MACHINERY ALONE IN THE RELEVANT FINANCIAL YEAR. LD. COUNSEL FOR THE 8 ASSESSEE HAS ALSO PLACED RELIANCE UPON THE FOLLOWIN G JUDGMENTS IN SUPPORT OF HIS CONTENTION THAT ONCE THE CLAIM OF DE DUCTION IS ALLOWED, THE AO CANNOT REOPEN THE ASSESSMENT ON ACCOUNT OF C HANGE OF OPINION:- I) CIT VS. KELVINATOR OF INDIA LTD. [2002] 256 ITR 1. II) CIT VS. KELVINATOR OF INDIA LTD. [2010] 187 TAX MAN 312 III) CIT VS. USHA INTERNATIONAL LTD. 25 TAXMANN.COM 200 (DEL) IV) DONALDSON INDIA FILERS SYSTEMS PVT. LTD VS. DCI T [2015] 51 TAXMANN.COM 253 V) RASALIKA TRADING AND INVESTMENT CO. PVT. LTD. VS . DCIT [2014] 13 TAXMANN.COM 371 VI) CIT VS. CENTRAL WAREHOUSING CORPORATION [2015] 58 TAXMANN.COM 225 (DEL) VII) CIT VS. TOURISM FINANCE CORPORATION OF INDIA L TD. [2008] 173 TAXMANN 409 VIII) CIT VS. CHINTOO TOMAR [2015] 54 TAXMANN.COM 2 89 IX) CIT VS.VAISHALI AVENUE [2014] 48 TAXAMNN.COM 28 9 X) CIT VS. INDIA RARE EARTHS LTD. [2015] 61 TAXMANN .COM 179 XI) GKN SINTER METALS LTD. VS. ACIT [2015] 55 TAXMA NN.COM 138 XII) PINE CHEMICALS LTD. VS. DCIT [2015] 57 TAXMANN .COM 302 XIII) IBS SOFTWARE SERVICES PVT. LTD. VS. UNION OF INDIA [2015] 59 TAXAMANN.COM 96 XIV) CIT VS. SCHWING STETTER INDIA PVT. LTD. [2015] 61 TAXMANN.CO, 18 XV) GTL LTD. VS. ACIT [2015] 59 TAXAMANN.COM 362 XVI) J.V. GOKUL & CO. VS. ACIT [2015] 53 TAXMANN.CO M 494 6. LD. COUNSEL FOR THE ASSESSEE FURTHER INVITED OUR ATTENTION TO THE COMPUTATION OF INCOME FILED ALONG WITH RETURN OF IN COME AND THE TAX AUDIT REPORT IN WHICH SPECIFIC NOTE WAS GIVEN THAT SITARGANJ UNIT IN 9 UTTRANCHAL STATE HAS COMMENCED COMMERCIAL PRODUCTIO N W.E.F. 02.02.2009. THE COMPANY IS ELIGIBLE U/S 80IC OF THE ACT TO THE EXTENT OF 100% OF PROFIT. ACCORDINGLY, SAME HAS BEEN CLAIM ED IN THE INCOME TAX RETURN OF THE YEAR. IT WAS FURTHER CONTENDED TH AT SINCE ALL THESE INFORMATION WERE AVAILABLE BEFORE THE ASSESSING OFF ICER, IT CANNOT BE SAID THAT HE HAS NOT APPLIED HIS MIND BEFORE ALLOWI NG THE CLAIM OF THE ASSESSEE U/S 80IC OF THE ACT. ON MERIT, LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED THAT THE ASSESSEE HAS MADE THE ADDITI ON IN PLANT AND MACHINERY AMOUNTING ONLY TO RS.37,52,759/- IN SITAR GANJ UNIT, THEREFORE ASSESSEE IS ENTITLED FOR DEDUCTION U/S 80 IC OF THE ACT. 7. HAVING CAREFULLY EXAMINED THE ORDERS OF LOWER AU THORITIES IN THE LIGHT OF RIVAL SUBMISSION, WE FIND THAT THE ASSESSI NG OFFICER HAS REOPENED THE ASSESSMENT AFTER FORMING A BELIEF THAT ASSESSEE HAS WRONGLY CLAIMED DEDUCTION U/S 80IC OF THE ACT. ON P ERUSAL OF THE ASSESSMENT ORDER FOR AY 2010-11, WE FIND THAT ASSES SMENT ORDER WAS PASSED ON 22.12.2012 ALLOWING THE DEDUCTION CLAIMED U/S 80IC OF THE ACT TO THE ASSESSEE. IN THIS ORDER ALSO THERE WAS N O DETAILED DISCUSSION IN THIS REGARD. 8. THOUGH THE ASSESSMENT WAS REOPENED ON 17.06.2013 FOR AY 2009-10, BUT NO INTERFERENCE WAS MADE IN THE ASSESS MENT ORDER PASSED IN AY 2010-11 ON 22.12.2012 ALLOWING THE DED UCTION U/S 80IC OF THE ACT. IT IS ALSO EVIDENT FROM RECORD THAT OTH ER IN AYS 2011-12 AND 2012-13 DEDUCTION U/S 80IC WAS ALLOWED AND IN THE ORDER FOR AY 2011- 12 THE AO HIMSELF HAS OBSERVED THAT ASSESSING OFFIC ER HAS MADE AN ENQUIRY WHILE ALLOWING THE CLAIM OF DEDUCTION U/S 8 0IC FOR AY 2010-11. MEANING THEREBY, WHILE FRAMING THE ASSESSMENT FOR A Y 2010-11 ON 10 22.12.2012, THE ASSESSING OFFICER HAS APPLIED HIS M IND TO CLAIM OF DEDUCTION RAISED BY THE ASSESSEE U/S 80IC OF THE AC T WHERE THE ASSESSING OFFICER HIMSELF HAS APPLIED HIS MIND TO T HE CLAIM OF DEDUCTION BY MAKING NECESSARY ENQUIRY BEFORE REOPENING THE AS SESSMENT IN AY 2010-11, THE REOPENING FOR AY 2009-10 APPEARS TO BE ON THE BASIS OF CHANGE OF OPINION. IT IS ALSO OBVIOUS FROM THE RECO RD THAT DURING THE COURSE OF REASSESSMENT PROCEEDINGS, ASSESSEE HAS FI LED THE CONSOLIDATED TAX AUDIT REPORT ALONG WITH FINANCIAL STATEMENT OF THE SITARGANJ UNIT ON WHICH DEDUCTION U/S 80IC WAS CLAI MED. 9. WE HAVE ALSO CAREFULLY EXAMINED VARIOUS JUDICIAL PRONOUNCEMENTS RENDERED ON THIS ISSUE AND WE FIND T HAT IN THOSE JUDGMENTS IT HAS BEEN REPEATEDLY HELD THAT WHENEVER THE ASSESSING OFFICER HAS ALLOWED THE CLAIM OF THE ASSESSEE HAVIN G APPLIED HIS MIND THE REOPENING OF THE ASSESSMENT IS NOT POSSIBLE AS IT AMOUNT TO THE CHANGE OF OPINION. 10. IN THE CASE OF GKN SINTER METALS LTD. VS. MS. R AMPRIYA RAGHAVAN, ACIT REPORTED IN 371 TAXMANN.COM 225, THE IR LORDSHIP OF THE HONBLE BOMBAY HIGH COURT HAS HELD THAT THE ASS ESSING OFFICER HAVING ALLOWED ASSESSEES CLAIM FOR DEDUCTION UNDER SECTION 80-IA/80- IB IN COURSE OF ASSESSMENT UNDER SECTION 143(3), CO ULD NOT INITIATE REASSESSMENT PROCEEDINGS MERELY ON BASIS OF CHANGE OF OPINION THAT THERE WAS INAPPROPRIATE ALLOCATION OF EXPENSES BETW EEN VARIOUS UNITS ELIGIBLE FOR DEDUCTION. IN THAT CASE, ASSESSEE HAS FILED A NOTE INDICATING THE MANNER IN WHICH IT HAD WORKED OUT ITS CLAIM FOR DEDUCTION UNDER 80-IA. THE NOTE INDICATED THAT THE EXPENSES WERE AL LOCATED BETWEEN THE THREE MANUFACTURING UNITS ON BASIS OF THEIR TUR NOVER. SIMILARLY IN 11 THE INSTANT CASE, THE ASSESSEE HAS GIVEN A NOTE IN THE AUDITORS REPORT THAT SITARGANJ UNIT IN UTTRAKHAND STATE HAS COMMENC ED COMMERCIAL PRODUCTION W.E.F. 02.02.2009. THE COMPANY IS ELIGIB LE FOR DEDUCTION U/S 80IC OF THE ACT TO THE EXTENT OF 100% OF THE PROFIT , ACCORDINGLY, SAME HAS BEEN CLAIMED IN THE INCOME TAX RETURN FOR THE Y EAR. IN THE LIGHT OF THE SPECIFIC NOTE AND CONSOLIDATED TAX AUDIT REPORT AND THE FINANCIAL STATEMENT OF THE UNIT, IT CANNOT BE SAID THAT THE A O HAS NOT APPLIED HIS MIND BEFORE ALLOWING THE CLAIM OF THE ASSESSEE. 10.1 IN THE CASE OF IBS SOFTWARE SERVICES PVT. LTD. VS. UNION OF INDIA REPORTED IN 232 TAXMAN 674 (KERALA), THE LORDSHIP O F THE HONBLE KERALA HIGH COURT HAVE GONE TO THE EXTENT BY HOLDIN G THAT IF ESSENTIAL AND BASIC DOCUMENTS WHICH ARE TO BE NECESSARILY EXA MINED BEFORE GRANT OF EXEMPTION UNDER SECTION 10A ARE NOT GONE I NTO, THEN IT IS DEFAULT OF OFFICER CONCERNED AND NOT ASSESSEE. 10.2 IN THE CASE OF PINE CHEMICALS LTD. VS. DCIT RE PORTED IN 57 TAXMANN.COM 302 (GUJARAT), THE LORDSHIP OF GUJARAT HIGH COURT HAS HELD THAT THE TRIBUNAL WAS NOT RIGHT IN HOLDING THA T ASSESSMENT WAS VALIDLY REOPENED UNDER SECTION 147, IN SPITE OF THE FACT THAT ALL PRIMARY FACTS WERE DISCLOSED BY THE APPELLANT IN THE RETURN OF INCOME AND AFTER CONSIDERING THE SAME, THE DEDUCTION U/S 80HH WAS AL LOWED ON INTEREST INCOME, DIVIDEND INCOME AND RENTAL INCOME IN THE OR IGINAL ASSESSMENT AND, HENCE, MERE CHANGE OF OPINION DOES NOT CONSTIT UTE INFORMATION WITHIN THE MEANING OF SECTION 147 OF THE ACT. 10.3 IN THE CASE OF CIT VS. VAISHALI AVENUE REPORTE D IN 48 TAXMANN.COM 289 (RAJASTHAN) IT WAS AGAIN HELD THAT WHERE ALL FACTS RELATING TO AMOUNT TAKEN TO BALANCE SHEET AS PROVIS ION FOR PROJECT 12 DEVELOPMENTS AND REGISTRATION CHARGES ON SALE OF PL OT WERE AVAILABLE BEFORE ASSESSING OFFICER AT TIME OF FRAMING OF ORIG INAL ASSESSMENT, REOPENING OF ASSESSMENT BY SUCCESSOR ASSESSING OFFI CER COULD NOT BE SUSTAINED. 11. IN THE LIGHT OF AFORESAID JUDGMENTS TURNING TO THE FACTS OF THE INSTANT CASE, WE FIND THAT ASSESSEE HAS FURNISHED T HE CONSOLIDATED TAX AUDIT REPORT AND FINANCIAL STATEMENT AND THE NOTES CLAIMING DEDUCTION UNDER SECTION 80IC OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDING AND THEREAFTER CLAIM WAS ALLOWED IN OTHE R ASSESSMENT YEARS. NOW, THE ASSESSING OFFICER HAS TAKEN A DIFFE RENT STANDS FOR REOPENING THE ASSESSMENT WITHOUT LOOKING INTO THE F ACT THAT IN SUCCEEDING YEAR THE CLAIM OF DEDUCTION U/S 80IC OF THE ACT WAS ALLOWED AND NO INTERFERENCE WAS MADE BY THE AO BY INVOKING THE PROVISIONS OF SECTION 147 OF THE ACT. IN THE LIGHT OF THESE FACTS , WE ARE OF THE CONSIDERED VIEW THAT REOPENING IS BAD IN LAW AS IT AMOUNTS TO CHANGE OF OPINION. ACCORDINGLY, WE FIND OURSELVES IN AGREE MENT WITH THE ORDER OF THE CIT(A). SO FAR AS THE ISSUE ON MERIT IS CONC ERNED, WE FIND THAT ASSESSEE HAS CATEGORICALLY STATED THAT ENTIRE INVES TMENT IN SITARGANJ UNIT IN PLANT AND MACHINERY OF RS.37,52,759/- WAS MADE DURING RELEVANT ASSESSMENT YEAR AS COMPARED TO NIL OPENING BALANCE AS ON 01.04.2008 BEING NEW UNDERTAKING/ENTERPRISES. THERE FORE, WE ARE OF THE VIEW THAT THE ASSESSEE IS ENTITLED FOR DEDUCTIO N U/S 80IC OF THE ACT AS THE ADDITION TO THE PLANT AND MACHINERY IS REQUI RED TO A PARTICULAR UNDERTAKINGS AND NOT THE ASSESSEE AS WHOLE. WE ACCO RDINGLY AGREE WITH THE VIEW OF THE CIT(A) IN THIS REGARD ALSO. TH EREFORE, WE CONFIRM THE ORDER OF THE CIT(A). 13 12. IN THE RESULT, APPEAL OF THE REVENUE STAND DISM ISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/- SD/- (A.K. GARODIA ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/11/2015 AKS COPY OF THE ORDER FORWARDED TO : 1.THE APPELLANT 2.THE RESPONDENT. 3.CONCERNED CIT 4.THE CIT(A) 5.D.R., I.T.A.T., LUCKNOW ASSTT. REGIST RAR