The ITO, 1(2), Bhopal v. M/s Priyadarshini Constructin, Bhopal

ITA 396/IND/2010 | 2003-2004
Pronouncement Date: 30-11-2011 | Result: Dismissed

Appeal Details

RSA Number 39622714 RSA 2010
Assessee PAN ACTOF1961A
Bench Indore
Appeal Number ITA 396/IND/2010
Duration Of Justice 1 year(s) 5 month(s) 12 day(s)
Appellant The ITO, 1(2), Bhopal
Respondent M/s Priyadarshini Constructin, Bhopal
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 30-11-2011
Date Of Final Hearing 01-11-2011
Next Hearing Date 01-11-2011
Assessment Year 2003-2004
Appeal Filed On 17-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.396/IND/2010 A.Y. 2003-2004 INCOME TAX OFFICER 1 (2) BHOPAL ... APPELLANT VS M/S PRIYADHARSHANI CONSTRUCTION S-4 SHRI RAMESH TOWER 2 ND FLOOR 10 NO. STOP MARKET ARERA COLONY BHOPAL-462016 ... RESPONDENT PAN AAEFP-1303H DEPARTMENT BY : SHRI ARUN DEWAN SR. DR ASSESSEE BY : SHRI H.P.VERMA & SHRI GIRISH AGRAWAL DATE OF HEARING : 01.11.2011 DATE OF PRONOUNCEMENT : 30.11.2011 O R D E R PER JOGINDER SINGH THE REVENUE HAS PREFERRED THIS APPEAL FOR THE ASSESSMENT YEAR 2003-04 CHALLENGING THE ORDERS OF T HE LD. CIT(A)-I BHOPAL DATED 30.3.2010 ON THE FOLLOWING GROUND: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN ANNULLING THE ASSESSMENT ORDER FOR THE A.Y 2003-04 HOLDING THAT THE ASSESSING OFFICER HAD NOT ASSUMED VALID JURISDICTION U/S 147 WHEREAS VIDE ORDER NO. CIT (A)-I/BPL/IT-426 NAD 427/09- 10 DATED 30/03/2010 CIT (A) HAD CONFIRMED ADDITION OF DISALLOWANCE OF CLAIM OF THE ASSESSEE U/S 80 IB (10) FOR THE A.Y 2004-2005 AND 2005-2006 STATING THAT THE ASSESSEE HAS NOT FULFILLED THE CONDITIONS LAID DOWN IN PLAIN AND CLEAR LANGUAGE OF CLAUSE (A)(I) AND THE EXPLANATION (II) OF SECTION 80IB (10) AND THE APPELLANT WAS NOT ELIGIBLE TO HAVE BENEFIT OF DEDUCTION U/ 80 IB (10) OF THE ACT. 1. FACTS IN BRIEF ARE THAT THE REASSESSMENT PROCEEDINGS THE ASSESSING OFFICER DISALLOWED THE ASSESSEES CLAIM U/S 80IB(10) OF THE ACT ON THE PLEA THAT THE ASSESSEE HAS NOT OBTAINED COMPLETION CERTIFICATE OF PRIYADARSHINI NILAYAM WITHIN THE SPECIFIED TIME AND THE INCOME WAS DETERMINED AT RS.9 76 832/- BY DISALLOWING THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT AT RS. 8 83 450/-. 2. BEFORE THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IT WAS CONTENDED BY THE ASSESSEE THAT THE ORIGINAL RETURN FILED BY THE APPELLANT WAS ACCOMPANIED WITH TAX AUDIT REPORT U/S 44AB IN FORM NO. 3CB AND 3CD AS WELL AS AUDITOR'S REPORT IN FORM NO.1OCCB FOR CLAIMING DEDUCTION U/S 80IB(10). IT WA S CONTENDED THAT ALL THE MATERIAL INFORMATION RELATIN G TO THE HOUSING PROJECT HAD BEEN DISCLOSED BY THE APPEL LANT IN THE RETURN OF INCOME. THE FACT THAT THE DATE OF COMMENCEMENT OF THE PROJECT WAS APRIL 2002 AND THE FACT THAT THE PROJECT APPROVED CONTAINED THE PROVIS ION FOR CONSTRUCTION OF RESIDENTIAL UNITS AND COMMERCIA L SHOPS/ESTABLISHMENTS WERE CLEARLY MENTIONED IN THE REPORT IN FORM NO. 10CCB. IT WAS POINTED OUT THAT T HE NOTICE U/S 148 WAS ISSUED ON 23.03.2009 AFTER FOUR YEARS FROM THE END OF THE A.Y. 2003-04 BUT THERE WA S NO FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE TRULY AND FULLY ALL THE MATERIALS WHICH WERE NECESSARY FO R COMPLETING OF THE ASSESSMENT OF A.Y. 2003-04. IT WA S VEHEMENTLY ARGUED THAT THE ASSESSMENT CAN NOT BE REOPENED AFTER THE EXPIRY OF FOUR YEARS PERIOD FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNTIL AND UNLES S THERE IS FAILURE ON THE PART OF THE ASSESSEE TO DIS CLOSE FULLY AND TRULY ALL MATERIAL FACTS WHICH ARE NECESS ARY FOR COMPLETING THE ASSESSMENT. IT WAS SUBMITTED THAT IN THE REASONS RECORDED THE AO HAS NOT POINTED OUT TH AT THERE WAS ANY FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE TRULY AND FULLY MATERIAL FACTS RELATED TO DEDUCTION U/S 80IB(10) CLAIMED IN THE RETURN. THE A R ALSO RELIED UPON THE DECISIONS IN THE CASE OF SITA WORLD TRAVEL (INDIA) (INDIA) LTD. VS. CIT 140 TAXMAN 381 (DEL.) AND RECENT DECISION OF BOMBAY HIGH COURT IN THE CA SE OF BHAVESH DEVELOPERS VS. A.O. THUS IT WAS CONTEN DED THAT THE ASSESSMENT CANNOT BE REOPENED AFTER FOUR YEARS MERELY ON ACCOUNT OF CHANGE OF OPINION OF THE AO AND WITHOUT ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. THUS IT WAS ARGUED THAT THE AO WAS GROSSLY WRONG IN INITIATING THE PROCEEDINGS U/S 147 BY ISSUING NOTICE U/S 148 IN THIS CASE. IT WAS CONTENDED THAT THE NOTICE ISSUED U/S 148 WAS ILLEGAL AND THEREFORE THE CONSEQUENT ASSESSMENT COMPLETED U/S 147/143(3) DATED 29.12.2009 ALSO DESERVES TO BE ANNULLED. BY THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ANNULLED THE ASSESSMENT BY HOLDING THAT REOPENING OF ASSESSMENT WAS NOT VALID AFTER EXPIRY OF FOUR YEARS INSOFAR AS THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRU LY AND FULLY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. PRECISE OBSERVATION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) WAS AS UNDER :- 3.4 I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE APPELLANT AND FACTS OF THE CASE. IN THIS CASE THE ORIGINAL ASSESSMENT FOR A.Y. 2003-04 WAS COMPLETED U/S 143(3) ON 10.01.2006 AFTER DISCUSSING IN DETAIL THE CLAIM OF DEDUCTION U/S 80IB(10) OF THE APPELLANT. THE NOTICE U/S 148 WAS ISSUED ON 23.03.2009 I.E. AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE A.Y. 2003-04. THUS THE PROVISIONS OF THE PROVISO TO SECTION 147 ARE CLEARLY APPLICABLE IN THIS CASE. IT WILL BE FRUITFUL TO REPRODUCE PROVISO TO SECTION 147 WHICH READS AS UNDER: 'PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 1 43 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 1 39 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF THE SECTION 1 42 OR SECTION 148 OR TO DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. ' FROM THE ABOVE PROVISO IT IS EVIDENTLY CLEAR THAT WHERE ASSESSMENT HAS BEEN COMPLETED U/S 143(3) OR 147 NO NOTICE U/S 148 CAN BE ISSUED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS: (I) THE ASSESSEE HAS NOT FURNISHED RETURN OF INCOME U/S 139 OR (II) HAS NOT COMPLIED WITH NOTICE ISSUED UNDER SUB-SECTION (I) O F SECTION 142 OR SECTION 148 OR (III) THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. . IN THIS CASE THE APPELLANT HAD FILED RETURN U/S 139 AND THERE IS NO CASE OF NON COMPLIANCE OF NOTICES ISSUE D U/S 142(1) OR U/S148 AND HENCE THE CONDITIONS MENTIONED ABOVE IN (I) & (II) ARE NOT APPLICABLE. THE APPELLANT HAD ALSO DISCLOSED ALL FACTS IN THE RETU RN OF INCOME RELATING TO THE HOUSING PROJECT IN FORM N O. 10CCB AND AS SUCH THERE WAS NO FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE FULLY AND TRULY A LL MATERIAL FACTS RELATING TO THE PROJECT. AS SUBMITT ED BY THE APPELLANT THE FACTS THAT THE APPROVED PROJEC T INTER-ALLIA CONTAINS THE PERMISSION FOR CONSTRUCTI ON OF COMMERCIAL SHOPS MEASURING 326.53 SQ. FT. AND THAT THE HOUSING PROJECT WAS APPROVED BY THE LOCAL AUTHORITY ON 04.12.2002 WERE DULY DISCLOSED IN FORM NO. 10CCB. THE AO HAS RECORDED FOLLOWING REASONS U/S 148 FOR REOPENING OF ASSESSMENT FOR A.Y. 2003-04 : 'REASONS FOR ISSUE OF NOTICE U/S 148 OF IT ACT 1961 1. THE ASSESSEE IS A BUILDER AND DURING THE A. Y. 2003-04 THE ASSESSEE CLAIMED DEDUCTION U/S 80IB(L0) AMOUNTING TO RS.8 83 450/- U/S 80IB(L0). ASSESSMENT U/S 143(3) WAS COMPLETED ON 10-1-2006 WHEREIN DEDUCTION U/S 801B(L0) WAS ALLOWED TO THE ASSESSEE IN RESPECT OF THE PROJECT NAMED PRIYADARSHINNI NILAYAN. SUBSEQUENTLY DURING THE ASSESSMENT PROCEEDINGS U/S 143(3) FOR A. Y. 2006-07 IT CAME TO LIGHT THAT THE ASSESSEE HAD NOT COMPLETED THE PROJECT TILL 31-3-2008. AS SUCH THE ASSESSEE IS NOT ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S 80IB(10) IN RESPECT OF THE ABOVE PROJECT IN ANY ASSESSMENT YEAR. 2. FURTHER UPTO A. Y. 2004-05 RELIEF U/S 80IB (L0) IS NOT ALLOWABLE TO AN UNDERTAKING WHICH HAD CONSTRUCTED COMMERCIAL ESTABLISHMENT ALONGWITH HOUSING PROJECT. SINCE THE PROJECT IN THIS CASE HAS BEEN APPROVED AS SHOPPING-CUM-RESIDENTIAL COMPLEX BENEFIT OF SEC. 80IB (10) IS NOT ALLOWABLE TO THE ASSESSEE FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. IN THE A. Y. 2003-04 INCOME OF RS.8 83 450/- HAS ESCAPED ASSESSMENT DUE TO EXCESSIVE ALLOWANCE OF RELIEF US/ 80IB(10). I HAVE THEREFORE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF PROVISION OF SEC. 147 OF THE IT. ACT 1961. ISSUE NOTICE U/S 148 OF THE ACT 1961.' 1. PERUSAL OF THE ABOVE REASONS RECORDED IT IS SEEN TH AT THERE IS NOT EVEN A WHISPER IN THE REASONS RECORDED THAT THERE WAS FAILURE ON THE PART OF THE APPELLANT TO DISCLOS E FULLY AND TRULY ALL MATERIAL FACTS RELATING TO THE CLAIM OF DEDUCTION U/S 80LB(10). IN THE ORIGINAL ASSESSMENT ORDER THE AO HAS ALLOWED DEDUCTION U/S 80IB(10) AFTER CONSIDERING THE ISSUE IN DETAIL. THUS THE CONDITIO N PRECEDENT REGARDING FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS WAS ABSENT AND THUS THE ASSESSMENT CAN NOT BE REOPENED AFTER THE EXPIRY OF FOUR YEARS AFTER THE E ND OF THE ASSESSMENT YEAR 2003-04 . THEREFORE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE 1 AM OF THE OPINION THAT THE AO HAD NOT VALIDLY ASSUMED JURISDICTION U/S 147 AND THE NOTICE ISSUED FOR REOPENING THE ASSESSMENT FOR A.Y. 2003-04 WAS INVALID. THEREFORE THE CONSEQUENT ASSESSMENT COMPLETED U/S 147/ 143(3) IS ALSO ANNULLED. IN THIS REGARD REFERENCE MAY BE MADE TO FOLLOWING DECISIONS. 3.5 IN THE CASE OF NIKHIL K. KOTAK VS. MAHESH KUMAR (2009) 319 ITR 445 (GUJ.) WHEREIN THE ASSESSEE HAD CLAIMED EXEMPTION U/S 54 OF RS. 11 36 477/- I.E. 1/3 RD SHARE OF RS.34 09 430/FOR INVESTMENT IN NEW HOUSE AGAINST THE INCOME FROM LONG TERM CAPITAL GAIN FOR A.Y. 1992-93. THE DETAIL OF INVESTMENT WAS SHOWN AS UNDER: (I) PURCHASE COST OF NEW HOUSE :RS.2362500/- (II) COST OF IMPROVEMENT ON NEW ASSET :RS.1046930/ TOTAL :RS.34 09 430/- 2. THE ASSESSMENT U/S 143(3) WAS FRAMED ON 23.03.1995 AFTER REFERRING TO THE WORKING OF LONG TERM CAPITAL GAINS. SUBSEQUENTLY THE AO RECORDED REASONS THAT THE EXEMPTION U/S 54 WAS ACTUALLY ALLOWABLE ON THE COST OF PURCHASE OF NEW ASSETS (I.E. RESIDENTIAL HOUSE) OR COST OF CONSTRUCTION OF NEW ASSETS ONLY AND THE COST OF IMPROVEMENT OF THE PROPERTY INCURRED ON WAS NOT BE QUALIFIED FOR THE EXEMPTION U/S 54 AND THEREFORE INCORRECT EXEMPTION WAS GRANTED RESULTED IN UNDER ASSESSMENT OF INCOME OF RS.3 49 977/- AND ISSUED NOTICE U/S 148 ON 22.03.1999 I.E. AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE HON'BLE GUJRAT HIGH COURT QUASHED THE NOTICE ISSUED U/S 148 DATED 22.03.1999. THE HON'BLE HIGH COURT HELD AS UNDER (HEAD NOTE): 'SECTION 147 OF THE INCOME-TAX ACT 1961 PERMITS REOPENING OF A COMPLETED ASSESSMENT IN A CASE WHERE INCOME LIABLE TO TAX HAS ESCAPED ASSESSMENT. HOWEVER THE PROVISO UNDER THE SECTION CARVES OUT AN EXCEPTION AND SHIFTS THE BURDEN ON THE REVENUE IN A CASE WHERE A PERIOD OF FOUR OUR YEARS HAS ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE PROVISO STIPULATES THREE CONDITIONS. THE REVENUE IS REQUIRED TO SHOW FROM THE RECORD AND THE FACTS OF THE CASE THAT ANYONE OF THE THREE CONDITIONS STANDS SATISFIED BEFORE THE AO CAN ASSUME JURISDICTION TO ISSUE NOTICE FOR REASSESSMENT. THE CONDITIONS ARE NON FILING OF RETURN AND NOT RESPONDING TO STATUTORY NOTICE. THE THIRD CONDITION REQUIRES THE REVENUE TO ESTABLISH THAT THERE WAS ANY OMISSION OR FAILURE ON THE PART OF THE . ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELEVANT FOR THE ASSESSMENT OF THE ASSESSMENT YEAR IN QUESTION. HELD THAT IT WAS NOT THE CASE OF THE REVENUE THAT THERE WAS ANY OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELEVANT FOR THE ASSESSMENT OF THE ASSESSMENT YEAR IN QUESTION. IN FACT THE STATEMENT SHOWING COMPUTATION OF TOTAL INCOME SHOWED THAT ALL THE RELEVANT DETAILS FOR COMPUTING LONG TERM CAPITAL GAINS HAD BEEN SHOWN BY THE ASSESSEE. NOT ONLY THAT DETAILS OF EXEMPTION CLAIMED UNDER SECTION 54 OF THE ACT IN RESPECT OF INVESTMENT IN THE NEW HOUSE HAD ALSO BEEN SHOWN ON A SEPARATE SHEET. THEREFORE IT WAS APPARENT THAT THERE WAS NO OMISSION OR FAILURE EN THE PART OF THE ASSESSEE AS REQUIRED BY THE PROVISIONS OF THE PROVISO TO SECTION 147 OF THE ACT. HENCE THE NOTICE DATED MARCH 22 1999 ISSUED UNDER SECTION 148 OF THE ACT WHICH WAS ADMITTEDLY ISSUED BEYOND A PERIOD OF FOUR YEARS I.E. MARCH 31 1997 WAS BAD IN LAW AND WITHOUT JURISDICTION. THE NOTICE WAS LIABLE TO BE QUASHED. ' 3.6 IN ANOTHER CASE OF GUJRAT FLUOROCHEMLCALS LTD. VS. DCIT' (2009) 319 ITR 282 (GUJ.) THE HON'BLE GUJRAT HIGH COURT HAS EXPRESSED THE SAME OPINION. IN THIS CASE THE ASSESSEE FILED ITS RETUR N OF INCOME ON 24.10.2001 FOR A.Y. 2001-02 INTER- ALLIA SHOWING LONG TERM CAPITAL GAINS OF RS. 1 09 47 296/-. THE ASSESSMENT WAS FRAMED U/S 143(3) ON 23.02.2004. SUBSEQUENTLY THE AO ISSUED NOTICE U/S 148 ON 31.03.2008 FOR REOPENING THE ASSESSMENT FOR A.Y. 2001-02 ON THE REASON THAT IN THE SUBSEQUENT ASSESSMENT ORDER FOR A.Y. 2005-06 PASSED U/S 143(3) ON 31.12.2007 IT WAS HELD THAT THE INCOME SHOWN BY THE ASSESSEE UNDER THE HEAD CAPITAL GAINS WAS ASSESSABLE UNDER THE HEAD 'PROFIT & GAINS OF BUSINESS OR PROFESSION' AND THEREFORE THE AMOUNT OF RS.L 09 47 296/- SHOWN AS LONG TERM CAPITAL GAINS FOR A.Y. 2001-02 SHOULD BE ASSESSED UNDER THE HEAD 'PROFITS AND GAINS OF THE BUSINESS OR PROFESSION'. IN VIEW OF THESE FACTS THE AO HAD REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX UNDER THE HEAD PROFITS AND GAINS OF BUSINESS HAS ESCAPED ASSESSMENT AS THE INCOME UNDER THE HEAD 'CAPITAL GAINS' WAS SUBJECTED TO LOWER SLAB OF TAX. THE HON'BLE HIGH COURT QUASHED THE NOTICE ISSUED U/S 148 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR ON THE GROUND THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOUSE FULLY ALL MATERIAL FACTS. THE HONBLE HIGH COURT HELD AS UNDER :- HELD ALLOWING THE PETITION THAT NO FAILURE ON THE PART OF THE ASSESSEE WAS EVEN ALLEGED AND IT WAS ACCEPTED THAT AN INCORRECT ASSESSMENT HAD BEEN FRAMED DUE TO AN ERROR ON THE PART OF THE ASSESSING OFFICER. THE ASSESSEE HAD MADE A FULL DISCLOSURE OF MATERIAL FACTS IN THE RETURN OF INCOME FILED BY IT FOR THE RELEVANT ASSESSMENT YEAR WHICH WAS ACCOMPANIED BY SEVERAL ENCLOSURES INCLUDING A SUMMARY OF SHORT TERM AND LONG TERM CAPITAL GAINS DISCLOSED METICULOUSLY AND ITEM-WISE. IT WAS THE STATUTORY DUTY OF THE ASSESSING OFFICER TO RECORD REASONS FOR ISSUING THE NOTICE UNDER SECTION 148 OF THE ACT AND REASONS RECORDED COULD NOT FURTHER BE SUPPLEMENTED OR EXPLAINED BY A SUBSEQUENT ORDER SO AS TO GIVE AN ENTIRELY DIFFERENT COMPLEXION TO THE CASE. THE NOTICE WAS NOT VALID. ' 3.7 IT MAY BE RELEVANT HERE TO REFER THE OBSERVATION OF HONBLE SUPREME COURT IN THE CASE OF PARSHURAM POTTERY WORKS CO. LTD. VS. ITO (1977) 106 ITR 1 (SC) ON PAGE 10 OF THE REPORT AS UNDER :- 'IT HAS BEEN SAID THAT THE TAXES ARE THE PRICE THAT WE PAY FOR CIVILIZATION. IF SO IT IS ESSENTIAL THAT THOSE WHO ARE ENTRUSTED WITH THE TASK OF CALCULATING AND REALIZING THAT PRICE SHOULD FAMILIARIZE THEMSELVES WITH THE RELEVANT PROVISIONS AND BECOME WELL VERSED WITH THE LAW ON THE SUBJECT. ANY REMISSNESS ON THEIR PART CAN ONLY BE AT THE COST OF THE NATIONAL EXCHEQUER AND MUST NECESSARILY RESULT IN LOSS OF REVENUE. AT THE SAME TIME WE HAVE TO BEAR IN MIND THAT THE POLICY OF LAW IS THAT THERE MUST BE A POINT OF FINALITY IN ALL LEGAL PROCEEDINGS THAT STALE ISSUES SHOULD NOT BE REACTIVATED BEYOND A PARTICULAR STAGE AND THAT LAPSE OF TIME MUST INDUCE REPOSE IN AND SET AT REST JUDICIAL AND QUASI-JUDICIAL CONTROVERSIES AS IT MUST IN OTHER SPHERES OF HUMAN ACTIVITY. SO FAR AS THE INCOME-TAX ASSESSMENT ORDER ARE CONCERNED THEY CANNOT BE REOPENED ON THE SCORE OF INCOME ESCAPED ASSESSMENT UNDER SECTION 147 OF THE ACT OF 1961 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR UNLESS THERE BE OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. ' 3.8 HONBLE BOMBAY HIGH COURT HAD AN OCCASION TO CONSIDER THE SIMILAR ISSUE IN THE CASE OF M/S BHAVESH DEVELOPERS VS. THE A.O. IN WRIT PETITION NO. 2508 OF 2009 ORDER DATED JANUARY 12 2010 WHEREIN THE ASSESSEE IS ENGAGED IN THE BUSINESS OF DEVELOPING AND CONSTRUCTION OF BUILDINGS. THE ASSESSEE FILED RETURN OF INCOME FOR A.Y. 2002-03 ON 14.01.2004 WHEREIN DEDUCTION U/S 80IB(10) OF RS. 3 85 75 992/- WAS CLAIMED AND AUDIT REPORT IN FORM NO . I0CCB WAS FILED ALONG WITH THE RETURN. THE ASSESSMENT ORDER WAS PASSED U/S 143(3) WHEREIN THE DEDUCTION U/S 801B(10) WAS ALLOWED AFTER VERIFICATION OF THE CLAIM. SUBSEQUENTLY THE AO ISSUED NOTICE U/S 48 ON 30.03.2009 ON THE GROUND THAT DURING THE YEAR THE ASSESSEE HAD OTHER INCOME OF RS. 50 1 3 307/- WHICH MAINLY COMPRISES OF SOCIETY DEPOSIT OF RS.47 80 517/- STILT PARKING OF RS. 1 25 000/- AND SUNDRY CREDITORS BALANCE OF RS. 1 07 712/- AND THAT THESE ITEMS OF INCOME DO NOT QUALIFY FOR DEDUCTION U/S 80IB(10). THE HON'BLE HIGH COURT HELD THAT THE NOTICE U/S 148 WAS NOT VALID AS THE NOTICE U/S 148 WAS ISSUED AFTER THE EXPIRY OF FOUR YEAR FROM THE END OF ASSESSMENT YEAR AND THERE WAS NO FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT . 3.9 THEREFORE CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND LEGAL POSITION ON THE ISSUE I AM OF THE OPINION THAT SINCE THE NOTICE 14 8 WAS ISSUED BY THE AO ON 30.03.2009 AFTER THE EXPIRY OF FOUR YEARS FROM END OF TH E A. Y. 2003 -04 AND IN THE REASONS RECORDED THERE IS NO ALLEGATION REGARDING FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT THE AO HAD NOT ASSUMED JURISDICTION U/S 147 AND THE NOTICE U/S 148 WAS BAD IN LAW. THUS THE CONSEQUENCE ASSESSMENT PASSED U/S 147/143(3) ALSO BECOMES INVALID AND IS THEREFORE ANNULLED. 3. AGGRIEVED WITH THE ABOVE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) THE REVENUE IS IN FURTHER APPEAL BEFORE US AND HAS CHALLENGED THE ACTION OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN HOLDING THAT THE REOPENING OF ASSESSMENT WAS NOT VALID. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REPRESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD AND FIND THAT IN THE RETURN OF INCOME FILED THE ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS FULLY AND TRULY RELATING TO ITS CLAIM OF DEDUCTION U/S 80IB(10) OF THE ACT. SINCE THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AS PER PROVISION TO SECTION 147 OF THE ACT NO NOTICE U/S 148 COULD BE ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE ASSESSEE HAS NOT FURNISHED RETURN OF INCOME U/S 139 OR HAS NOT COMPLIED WITH THE NOTICE ISSUED U/S 142(1) OF THE ACT OR SECTION 148 OR THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. A CATEGORICAL FINDING HAS BEEN RECORDED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) TO THE EFFECT THAT THE ASSESSEE HAS FILED RETURN U/S 139 AND THERE WAS NO CASAE OF NON-COMPLIANCE WITH THE NOTICE ISSUED U/S 142(1) OR 148 OF THE ACT. A FINDING HAS ALSO BEEN RECORDED TO THE EFFECT THAT THE ASSESSEE HAS DISCLOSED ALL MATERIAL FACTS IN TH E RETURN OF INCOME RELATING TO HOUSING PROJECT IN FORM NO. 10CCB THUS THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELATING TO THE PROJECT. EVEN THE NOTICE ISSUED FOR REOPENING OF ASSESSMENT NOWHERE SPEAKS REGARDING ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS. THE REASONS SO RECORDED FOR REOPENING THE ASSESSMENT DO NOT SPELL ANY ALLEGATION REGARDING FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. THE DETAILED FINDING RECORDED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN THIS REGARD HAS NOT BEEN CONTROVERTED BY THE LEARNED CIT DR BY BRINGING ANY POSITIVE MATERIAL ON RECORD. WE THEREFORE DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IN ANNULLING THE ASSESSMENT ON THE GROUND OF VALIDITY OF REASSESSMENT AFTER COMPLETION OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WHERE THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT. 5. IN THE RESULT THE APPEAL OF THE REVENUE IS DISMISSED. SD SD (R.C. SHARMA) (JOGINDER SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER NOVEMBER 30 TH 2011 COPY TO APPELLANT RESPONDENT CIT CIT(A) DR DN/-