M/s. Kharade Patil, Pune V. ACIT, Pune

ITA 938/PUN/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 9927 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-08-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 25-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN KAPTHUAMA
• Assessee Lawyers: S N DOSHI
• Keywords: Search and seizure; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NOS. 938 & 939/PN/2010 (ASSTT. YEARS : 2004 -05 & 2005-06) M/S. KHARADE PATIL, APPELLANT SHREERAM TOWERS, OPP.COSMOS BANK, AUNDH, PUNE 411007 PAN :AAGFK1431P V. ACIT, CIR. 4, PUNE RESPONDENT APPELLANT BY : SHRI. S.N. DOSHI RESPONDENT BY : MS. ANN KAPTHUAMA DATE OF HEARING : 28/8/1 2 DATE OF PRONOUNCEMENT : -10-12 O R D E R PER R.S. PADVEKAR, JM THIS BATCH OF THE TWO APPEAL ARE FILED BY THE ASS ESSEE CHALLENGING THE RESPECTIVE ORDERS OF THE LD CIT(A)-II, PUNE FOR THE A.Y. 2004-05 AND 2005-06. WE FIRST TAKE THE APPEAL FOR THE A.Y. 2004 -05 IN WHICH THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE LOWER AUTHORITIES HAVE ERRED IN RE-OPENING THE ASSESSMENT S OF A.Y. 2004-05 DISREGARDING THE LEGAL AND FACTUAL CONTENTION THAT THE SAME IS BAD IN LAW FIRSTLY, ON ACCOUNT OF NON-COMMUNICATION OF THE REA SONS RECORDED FOR RE- OPENING THE ASSESSMENT AND SECONDLY THE RE-OPENING IS MADE MERELY ON THE BASIS OF CHANGE OF OPINION. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE THE LOWER AUTHORITI ES HAVE ERRED IN REJECTING THE CLAIM OF EXEMPTION MADE U/S. 80IB(10) DISREGARDING THE FACTUAL AND LEGAL SUBMISSION THAT THE ENTIRE HOUSIN G PROJECT COMPRISING OF 4 BUILDINGS, I.E. A,B,C, AND D IS COMPLETED BEFORE 31/03/2008. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND WITHOUT PREJUDICE TO GROUND NO. 1 ABOVE THE LOWER AUTHORITI ES HAVE ERRED IN DISREGARDING THE RULE NO. 7.6 AND 7.7 OF THE DEVELO PMENT CONTROL RULES ACCORDING TO WHICH IT IS THE ARCHITECT WHO HAS TO C ERTIFY THE COMPLETION OF THE HOUSING PROJECT ON THE BASIS OF WHICH THE PUNE MUNICIPAL CORPORATION HAS TO GRANT THE OCCUPANCY CERTIFICATE IN THE PRESC RIBED FORM IN APPENDIX K WITHIN 21 DAYS FROM THE DATE OF RECEIPT OF SUCH COMPLETION CERTIFICATE FROM THE ARCHITECT AND IF NOTING IS HEAD WITHIN THE SAID PERIOD OF 21 DAYS THE SAID DEVELOPMENT CONTROL RULES CATEGORICALLY PR OVIDES THAT IN THAT 2 ITA NOS. 938 & 939/PN/10 M/S KHARADE PATIL A.YS.2004-05&2005-06 CASE IT SHALL BE DEEMED TO HAVE BEEN APPROVED BY TH E AUTHORITY FOR OCCUPATION OF THE SAID BUILDING. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND WITHOUT PREJUDICE TO GROUND NO.S 1 TO 3 ABOVE THE LOWER AU THORITIES HAVE ERRED IN NOT ALLOWING THE ALTERNATIVE CONTENTION THAT THE EX EMPTION U/S. 80IB(10) IS LEGALLY ALLOWABLE IN RESPECT OF 3 BUILDINGS I.E. A,B, AND C WHICH ARE UNDISPUTEDLY COMPLETED BEFORE 31/03/2008 AND IT IS NOT NECESSARY THAT THE ENTIRE HOUSING PROJECT INCLUDING BUILDING NO. 4 I.E. D SHOULD HAVE BEEN COMPLETED BEFORE 31/03/2008 AND IN THE PROCESS NOT FOLLOWING THE RATIOS LAID DOWN BY SEVERAL TRIBUNAL JUDGMENTS. 2. IN THE FIRST GROUND, THE ASSESSEE HAS CHALLENGED THE LEGALITY AND VALIDITY OF THE PROCEEDINGS U/S. 147 IN WHICH THE A SSESSEES ASSESSMENT HAS BEEN RE-OPENED. 3. THE FACTS WHICH REVEAL FROM THE RECORD ARE AS UN DER. THE ASSESSEE IS A PARTNERSHIP FIRM WHICH IS ENGAGED IN THE BUSIN ESS AS DEVELOPER AND BUILDER. THE ASSESSEE FILED THE RETURN OF INCOME F OR THE A.Y. 2004-05 U/S. 139 OF THE ACT DECLARING NIL INCOME ON 1.11.2004. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND ASSESSEE WAS ISSUED N OTICE U/S. 143(2) AND 142(1) OF THE ACT. THE ASSESSEE HAD CLAIMED THE DE DUCTION U/S. 80 IB (10) OF THE ACT IN RESPECT OF THE HOUSING PROJECT K NOWN AS HARI OM PURAM. THE CONSTRUCTION OF THE SAID HOUSING PROJE CT WAS STARTED VIDE COMMENCEMENT CERTIFICATE DATED 01.10.2001. IN THE ORIGINAL ASSESSMENT ORDER, THE A.O. HAS GIVEN FINDING IN RES PECT OF THE AREA OF THE PLOT THAT THE SAME WAS TO THE EXTENT OF 4434.60 SQ .MTS. I.E. MORE THAN 1 ACRE. IN THE ASSESSEES HOUSING PROJECT, THERE W ERE 4 BUILDING I.E. A, B, C & D CONSISTING OF 84 FLATS. THE A.O MADE THE PERSONAL VISIT TO THE PROJECT SITE AND CARRIED OUT THE PHYSICAL VERIFICAT ION TO CONFIRM THAT ASSESSEE HAS NOT CONSTRUCTED ANY COMMERCIAL UNITS I N THE SAID PROJECT AND THE AREA OF EACH RESIDENTIAL UNIT WAS LESS THA N 1500 SQ.FT. IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S. 143(3), THE A .O HAS OBSERVED THAT : 1) THE ASSESSEE HAS STARTED THE DEVELOPMENT AND CON STRUCTION OF THE HOUSING PROJECT FROM 13 TH AUGUST 2002. 2) THE AREA OF THE PLOT ON WHICH HOUSING PROJECT W AS CARRIED WAS MORE THAN 1 ACRE AND 3) THE BUILT UP AREA OF EACH RESIDENTIAL UNIT WAS L ESS THAN 1500 SQ.FT. AND THERE IS NO COMMERCIAL CONSTRUCTION IN T HE PROJECT. 3 ITA NOS. 938 & 939/PN/10 M/S KHARADE PATIL A.YS.2004-05&2005-06 THE A.O GAVE HIS FINDING THAT AS THE ASSESSEE FULFI LLED ALL THE CONDITIONS LAID DOWN IN SEC. 80 IB(10), THE DEDUCTION CLAIMED U/S. 80 IB (10) HAS TO BE ALLOWED. THE A.O, THEREFORE, ALLOWED DEDUCTION CLAIMED BY THE ASSESSEE U/S 80 IB(10) IN THE ASSESSMENT ORDER PASS ED U/S. 143(3) DATED 7.8.2006. 4. SUBSEQUENTLY, THE A.O INITIATED PROCEEDINGS U/S. 147 AND THE ASSESSEE WAS ISSUED THE NOTICES U/S. 148 ON 13.2.2 009. IN THE RE- ASSESSMENT PROCEEDINGS, THE DEDUCTION ALLOWED TO TH E ASSESSEE IN THE ORIGINAL ASSESSMENT U/S. 80 IB (10) WAS WITHDRAWN. IN THE IMPUGNED ASSESSMENT ORDER, THE A.O HAS GIVEN THE DETAILS OF THE APPROVAL OF THE ASSESSEES PLAN AND HOW THE REVISED BUILDING WAS F INALLY APPROVED ON 8- 6-2006 AND THE ASSESSEE WAS ALLOWED ADDITIONAL BUIL T UP AREA OF 848.11 SQ. MTS. ON ACCOUNT OF TDR. THE MAIN REASONS FOR W ITHDRAWAL OF THE DEDUCTION U/S. 80 IB (10) WAS THAT THE ASSESSEES H OUSING PROJECT WAS NOT COMPLETED ON OR BEFORE 31.3.2008. FOR UNDERST ANDING THE CASE OF THE A.O FOR DENIAL OF THE DEDUCTION, THE REASONS GI VEN IN THE ASSESSMENT ORDER ARE AS UNDER : 7.1 THE BUILDING PLAN OF THE PROJECT WAS FIRST APP ROVED BY THE PMC VIDE CONSTRUCTION COMMENCEMENT CERTIFICATE NO.6014 DATED 19/06/2002, SUBSEQUENTLY REVISED ON 02/09/2004(CC/2027/04), 7/0 1/2005 (CC/4164/04) AND 8/06/2006(CC/0896/06). AS PER THE REVISED BUILDING PLAN DATED 8/06/2006, ADDITIONAL BUILT UP AREA OF 8 48.11 SQ.MT. WAS PERMITTED ON ACCOUNT OF TDR. BUILDING NO 1 IS FOUR STOREY EWS BUILDING WITH 25 SQ.MT TENEMENTS, TO BE HANDED OVER TO THE P MC. FURTHER, THERE WERE FOUR SIX-STOREY BUILDINGS (A,B,C & D WINGS) PR OPOSED TO BE BUILT IN THE PROJECT. WING A HAS FOUR UNITS ON EACH OF TH E FIVE FLOORS, AND TWO TERRACE FLATS ON THE SIXTH FLOOR (22 UNITS). WING B HAS FOUR UNITS ON EACH OF THE FIVE FLOORS, AND THREE UNITS (INCLUDING TWO TERRACE FLATS) ON THE SIXTH FLOOR (TOTAL 23 UNITS), D WING BUILDING HAD FOUR UNITS ON EACH OF THE FOUR FLOORS AND TWO UNITS (WITH TERRACES) EACH ON THE 5 TH AND 6 TH FLOORS, TOTALING 20 UNITS. AS EXPLAINED BY THE ASSESSEE, THE BUILDI NG PLANS HAVE NOT BEEN REVISED AFTER 08/06/2006. COMPLETION CERTIFICATE FOR BUILDING NO. 1(EWS) COMPRISING 38 UNITS WERE RECEIVED ON 25/08/2005 (BC O/6/08/91). COMPLETION CERTIFICATE FOR THE A WING (22 UNITS) AND B WING (23 UNITS) WERE RECEIVED VIDE PMC NO. BCO/6/08/110 DATED 26/09 /2005 (PART II). COMPLETION CERTIFICATE FOR THE C WING CONSISTING OF 24 RESIDENTIAL UNITS, WAS RECEIVED ON 29/06/2006(BCO)/6/08/65). COMPLETI ON CERTIFICATE FOR THE D BUILDING WAS NOT SUBMITTED DURING THE COURS E OF THE ASSESSMENT PROCEEDINGS IN ASST. YR 2006-07 AND AS SUCH SITE IN SPECTIONS MADE BY THE INSPECTOR OF THIS OFFICE ALSO REVEALED THAT AT THE TOP FLOOR D BUILDING WAS STILL UNDER CONSTRUCTION WHICH EXPLAINS THAT THE AS SESSEE HAS ACTUALLY NEITHER COMPLETED, NOT APPLIED FOR THE COMPLETION C ERTIFICATE OF THE BUILDING D TO THE PMC. 7.2 IN VIEW OF THE ABOVE PROVISION IT IS CLEAR THAT THE HOUSING PROJECT FOR WHICH THE APPROVAL WAS RECEIVED ON 19/06/2002 W AS STILL INCOMPLETE 4 ITA NOS. 938 & 939/PN/10 M/S KHARADE PATIL A.YS.2004-05&2005-06 BY 31/03/2008. NOW, ONE OF THE MANDATORY REQUIREMEN TS OF 80IB(10) IS THAT THE HOUSING PROJECT FOR WHICH THE APPROVAL WAS RECEIVED BEFORE 01/04/2004 NEEDS TO BE COMPLETED ON OR BEFORE 31/0 3/2008. AS THE SAID REQUIREMENT WAS NOT FULFILLED BY THE SSESSSEE, THE HOUSING PROJECT OF THE ASSESSEE IS INELIGIBLE FOR CLAIMING DEDUCTION U/S 8 0IB(10). 7.3 IT WAS FURTHER NOTICED THAT THE NET PLOT AREA O F THE HOUSING PROJECT IS 3991.14 SQUARE METRE, WHICH IS LESS THAN THE PRE SCRIBED MANDATORY AREA OF 1 ACRE. THEREFORE, THE PROJECT OF THE ASSES SEE BECOMES INELIGIBLE FOR THE DEDUCTION U/S 80IB(10) OF THE ACT ON THIS G ROUND ALSO. 5. THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER PA SSED U/S. 143(3) R.W.S. 147 BEFORE THE LD CIT(A), BUT WITHOUT SUCCES S. IT APPEARS THAT THE ASSESSEE HAS NOT CHALLENGED THE LEGALITY AND VALIDI TY OF THE ASSESSMENT PROCEEDINGS BEFORE THE LD CIT(A), BUT, CONTESTED TH E ASSESSMENT ORDER ON MERIT. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORD. THE LD. CONSUL VEHEMENTLY ARGUED THAT SO F AR AS THE A.Y. 2004- 05 IS CONCERNED, WHILE PASSING THE ASSESSMENT ORDER U/S. 143(3) DATED 7.8.2006, THE A.O MADE THE PERSONAL VISIT TO THE PR OJECT SITE OF THE ASSESSEE AND CARRIED OUT THE INSPECTION. HE FURTHE R SUBMITS THAT NO REASON WAS GIVEN AS TO WHAT WAS THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE THE PARTICULARS WHICH ARE REQUIRED FOR COMPLETION OF THE ASSESSMENT IN QUESTION. HE SUBMITS THAT THE A.O TO OK THE SECOND INNINGS TO WITHDRAW THE DEDUCTION BY TAKING THE DIFFERENT V IEW WHEN ALL THE MATERIAL PARTICULARS AND FACTS ARE ON RECORD, EVEN AT THE TIME OF COMPLETION OF THE REGULAR ASSESSMENT U/S. 143(3). THE LD COUNSEL RELIED ON THE FOLLOWING DECISIONS :- A) CIT VS. FORAMER FRANCE, 265 ITR 566 (SC) B) CIT VS. SURESH KUMAR L/H SHRI RAM, 275 ITR 253 (PUN. & HAR.) C) CAPRIHAS INDIA LTD. VS. PRAKASH CHANDRA, 256 IT R 721 (BOM.) D) MARUDHAR HOGTELS P LTD. VS. DCIT, 259 ITR 509 ( RAJ.) E) CIT VS. MAHARASHTRA SUGAR MILLS LTD, 266 ITR 18 0 (BOM.) 7. PER CONTRA, THE LD. D.R. SUPPORTED THE ACTION OF THE A.O. AS PER FACTS ON RECORD, IT IS NOT DISPUTED THAT WHILE COMP LETING THE REGULAR ASSESSMENT U/S. 143(3) DATED 7.8.2006, THE A.O PERS ONALLY VISITED THE PROJECT SITE AND CARRIED OUT THE INSPECTION. WE FI ND THAT IN THE ASSESSMENT ORDER U/S. 143(3), THE A.O HIMSELF HAS G IVEN CATEGORICAL FINDING IN RESPECT OF THE COMPLIANCE OF ALL THE CO NDITIONS U/S. 80IB(10) BY 5 ITA NOS. 938 & 939/PN/10 M/S KHARADE PATIL A.YS.2004-05&2005-06 THE ASSESSEE. NOW IN THE REASSESSMENT PROCEEDINGS, THE A.O HAS GONE WITH THE SECOND INNINGS BY TAKING A VIEW THAT THE D EDUCTION TO THE ASSESSEE WAS WRONGLY ALLOWED EVEN IF THE PROJECT WA S NOT COMPLETE. MOREOVER, WE ALSO FIND THAT THE A.O HAS NOT MENTION ED THE REASONS FOR ISSUING THE NOTICE U/S. 148 AND THAT WAS ONE OF THE CHARGE BY THE LD COUNSEL, NO REASONS WERE RECORDED AND BLANKLY THE N OTICE WAS ISSUED U/S. 148. NOW THE A.O COMES WITH THE CASE THAT THE ASSE SSEE HAS NEVER FILED THE COMPLETION CERTIFICATE IN RESPECT OF BUILDING D WHICH WAS ONE OF THE BUILDING IN HIS HOUSING PROJECT. IN OUR OPINION, A S RIGHTLY ARGUED BY THE LD COUNSEL, IT IS THE CASE OF THE CHANGE OF THE OP INION AND THE SAID EXERCISE IS NOT PERMISSIBLE TO THE A.O AS PER WELL SETTLED JUDICIAL PRECEDENTS. WE MAY REFER THE DECISION OF HONBLE S UPREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD., 320 ITR 561 THAT INITIATION OF THE PROCEEDINGS U/S. 147 ARE NOT PERMISSIBLE MERELY ON THE BASIS OF CHANGE OF OPINION. THE JURISDICTIONAL HIGH COURT HAS ALSO CO NSISTENTLY TAKEN SAME VIEW IN THE PLETHORA OF DECISIONS INCLUDING THE DEC ISIONS RELIED ON BY THE LD. COUNSEL. WE MAY QUOTE HERE AND RELY ON THE OPE RATIVE PART OF THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF KELVINATOR OF INDIA LTD.(SUPRA) : ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE TO SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO THE DIRECT TAX LAW S (AMENDMENT) ACT, 1987, REOPENING COULD BE DONE UNDER THE ABOVE TWO C ONDITIONS AND FULFILLMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 147 OF THE ACT (WITH EFFECT FROM 1 ST APRIL, 1989), THEY ARE GIVEN A GO-BY AND ONLY ONE CONDITION HAS REMAINED, VIZ., THAT WHERE THE ASSESS ING OFFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONF ERS JURISDICTION TO REOPEN TO REOPEN THE ASSESSMENT. THEREFORE, POST- 1 ST APRIL, 1989, POWER TO REOPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GI VE A SCHEMATIC INTERPRETATION TO THE WORDS REASON TO BELIEVE FAI LING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVEN ARBITRARY POWERS T O THE ASSESSING OFFICER TO REOPEN ASSESSMENTS ON THE BASIS OF MERE CHANGE OF OPINION, WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST ALSO KE EP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REVIEW AND P OWER TO REASSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULF ILLMENT OF CERTAIN PRE- CONDITIONS AND IF THE CONCEPT OF CHANGE OF OPINIO N IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF CHANGE OF OPINION AS AN IN-BUILT TEST TO CHECK AB USE OF POWER BY THE ASSESSING OFFICER. HENCE, AFTER 1 ST APRIL, 1989, THE ASSESSING OFFICER HAS POWER TO REOPEN, PROVIDED THERE IS TANGIBLE MATERI AL TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 O F THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, 6 ITA NOS. 938 & 939/PN/10 M/S KHARADE PATIL A.YS.2004-05&2005-06 PARLIAMENT NOT ONLY DELETED THE WORDS REASON TO BE LIEVE BUT ALSO INSERTED THE WORD OPINION IN SECTION 147 OF THE A CT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM THE COMPANIES AGAINST OMISS ION OF THE WORDS REASON TO BELIEVE, PARLIAMENT REINTRODUCED THE SA ID EXPRESSION AND DELETED THE WORD OPINION ON THE GROUND THAT IT WO ULD VEST ARBITRARY POWERS IN THE ASSESSING OFFICER. WE QUOTE HEREINBE LOW THE RELEVANT PORTION OF CIRCULAR NO. 549 DATED OCTOBER 31, 1989 ([1990] 182 ITR (ST.) 1,29), WHICH READS AS FOLLOWS : 7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO RE INTRODUCE THE EXPRESSION REASON TO BELIEVE IN SECTION 147.- A NUMBER OF REPRESENTATIONS WERE RECEIVED AGAINST THE OMISSION OF THE WORDS REASON TO BELIEVE FROM SECTION 147 AND THEIR SUBS TITUTION BY THE OPINION OF THE ASSESSING OFFICER. IT WAS POINTED OUT THAT THE MEANING OF THE EXPRESSION, REASON TO BELIEVE HAD BEEN EXPLAINED IN A NUMBER OF COURT RULINGS IN THE PAST AND WAS WE LL SETTLED AND ITS OMISSION FROM SECTION 147 WOULD GIVE ARBITRARY POWE RS TO THE ASSESSING OFFICER TO REOPEN PAST ASSESSMENTS ON MER E CHANGE OF OPINION. TO ALLAY THESE FEARS, THE AMENDING ACT, 1 989, HAS AGAIN AMENDED SECTION 147 TO REINTRODUCE THE EXPRESSION HAS REASON TO BELIEVE IN PLACE OF THE WORDS FOR REASONS TO BE R ECORDED BY HIM IN WRITING, IS OF THE OPINION. OTHER PROVISIONS OF TH E NEW SECTION 147, HOWEVER, REMAIN THE SAME. FOR THE AFORESAID REASONS, WE SEE NO MERIT IN THESE CIVIL APPEALS FILED BY THE DEPARTMENT; HENCE, DISMISSED WITH NO ORDER AS T O COSTS. 8. WE, THEREFORE, HOLD THAT THE ISSUE OF THE NOTICE TO THE ASSESSEE U/S. 148 IS BAD IN LAW AS THE PROCEEDINGS INITIATED ARE MERELY ON THE CHANGE OF OPINION. WE, THEREFORE, QUASH THE RE-ASSESSMEN TS INITIATED BY THE A.O. U/S. 147 OF THE ACT AND CANCEL THE ASSESSMENT ORDER PASSED BY THE A.O U/S. 143(3) R.W.S. 147 FOR THE A.Y. 2004-05 AND GROUND NO. 1 OF THE ASSESSEE IS ALLOWED. 9. SO FAR AS THE OTHER GROUNDS ARE CONCERNED, WE D O NOT CONSIDER IT NECESSARY TO DECIDE THE SAME AS THE ASSESSEE HAS SU CCEEDED IN GETTING THE ASSESSMENT ORDER CANCELLED ON THE ISSUE OF VALI DITY OF NOTICE U/S. 148. 10. SO FAR AS A.Y. 2005-06 IS CONCERNED, THE ASSESS EE HAS TAKEN IDENTICAL GROUNDS AS ARE TAKEN IN THE A.Y. 2004-05. IN THIS YEAR ALSO, THE ASSESSEE FILED THE RETURN OF INCOME DECLARING NIL INCOME ON 31.10.2005. THE ASSESSEES CASE WAS SELECTED FOR SCRUTINY AND ASSESSMENT HAS BEEN COMPLETED U/S. 143(3) OF THE ACT DATED 22 ND FEBRUARY 2007. IN THIS YEAR, THE ASSESSEE HAS CLAIMED THE DEDUCTION TO THE EXTEN T OF RS. 95,59,178/- U/S. 80 IB (10) OF THE ACT. THE A.O ALLOWED THE DE DUCTION OF THE ASSESSEE CLAIMED U/S. 80IB(10). ON THE PERUSAL OF THE ASSE SSMENT ORDER, WE FIND THAT THE A.O MADE THE PERSONAL VISIT TO THE PROJECT SITE TO VERIFY WHETHER ANY COMMERCIAL CONSTRUCTION IS IN THE PROJECT AS WE LL AS THE AREA OF EACH 7 ITA NOS. 938 & 939/PN/10 M/S KHARADE PATIL A.YS.2004-05&2005-06 RESIDENTIAL UNIT, WHETHER THE SAME WAS LESS THAN 15 00 SQ. FT. THE ASSESSMENT ORDER PASSED BY THE A.O IS VERBATIM AS T HAT OF A.Y. 2004-05, SAVE THE QUANTUM OF DEDUCTION. IN THIS YEAR ALSO, THE ASSESSMENT ORDER WAS RE-OPENED BY THE A.O BY ISSUING THE NOTICE U/S. 148 TO THE ASSESSEE ON 13.2.2009. AS THE FACTS ARE IDENTICAL IN THIS YE AR AND THE A.O HAS COMPLETED SCRUTINY ASSESSMENT U/S. 143(3) VIDE ASSE SSMENT ORDER DATED 29.12.2009, FOLLOWING OUR REASONS GIVEN IN THE A.Y. 2004-05, WE HOLD THAT THE PROCEEDINGS U/S. 147 WERE INITIATED MERELY ON THE CHANGE OF OPINION BY THE A.O AND THE SAID EXERCISE IS NOT PE RMISSIBLE. WE, THEREFORE, QUASH THE RE-ASSESSMENT PROCEEDINGS INIT IATED BY THE A.O U/S. 147 AND CANCEL THE ASSESSMENT ORDER. ACCORDINGLY G ROUND NO. 1 IN THE A.Y. 2005-06 IS ALLOWED IN THE FAVOUR OF THE ASSESS EE. 11. SO FAR AS OTHER GROUNDS ARE CONCERNED, WHICH AR E TAKEN ON MERIT, WE DO NOT FIND IT NECESSARY TO GO INTO THE SAME. 12. BOTH THE APPEALS OF ASSESSEE FOR A.Y. 2004-05 & 2005-06 ARE ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 29TH OCTOBER 2012. SD/- SD/- (G.S. PANNU) ACCOUNTANT MEMBER (R.S.PADVEKAR ) JUDICIAL MEMBER PUNE, DATED THE 29T OCTOBER, 2012 US COPY OF THE ORDER IS FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT- II, PUNE 4. THE CIT(A)- II, PUNE 5. THE D.R. A BENCH, PUNE 6. GUARD FILE /- TRUE COPY-/ BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL PUNE