ITA Nos. 1228 to 1230/Hyd/11 and C.O. Nos. 71 to 73/Hyd/11, (Assessment Year: 2003-04; 2004-05; 2005-06). Case: 1. ACIT, 2. M/s. Divya Shakti Granites Ltd. Vs 1. M/s. Divya Shakti Granites Ltd., 2. ACIT. ITAT (Income Tax Appellate Tribunal)
| Case Number | ITA Nos. 1228 to 1230/Hyd/11 and C.O. Nos. 71 to 73/Hyd/11, (Assessment Year: 2003-04; 2004-05; 2005-06) |
| Counsel | For Appellant: Shri V. Raghavendra Rao and For Respondents: Sri M.H. Naik |
| Judges | Chandra Poojari, Member (A) and Saktijit Dey, Member (J) |
| Issue | Income Tax Act, 1961 - Sections 10B, 143(1), 143(3), 147, 148, 148(2) |
| Judgement Date | June 28, 2013 |
| Court | ITAT (Income Tax Appellate Tribunal) |
Order:
Saktijit Dey, Member (J), (ITAT Hyderabad 'A' Bench)
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These set of appeals by the department and Cross Objections by the assessee are directed against a common order dated 27-4-2011 passed by the CIT (A) -II, Hyderabad pertaining to the assessment years 2003-04 to 2005-06. Since common and identical issues are involved in all these appeals and Cross Objections, these are taken up together and disposed of by this combined order for the sake of convenience. We will first deal with Cross Objections of the assessee as the assessee has raised the legal issue with regard to the validity of the proceedings initiated u/s. 147 of the Act. C.O. No. 71/Hyd/11 is time barred by 32 days whereas the other two C.As. being CO. Nos. 72 and 73 of 2011 are time barred by 22 days. The assessee has filed a petition supported by an affidavit explaining the cause of delay. After considering the submissions of the assessee, we are inclined to condone the delay in filing these C.As. and admit them for disposal. All these C.As. have been filed on the following common grounds:-
i) The reopening u/s. 147 of the IT Act of the assessment originally completed on the same set of facts considered while making assessment u/s. 143(3) amounted to change the opinion and therefore invalid.
ii) The assessment of any other income alleged to have escaped assessment is invalid in law as the proceedings u/s. 147 are invalid and as the income believed to have escaped assessment was actually found not to have escaped assessment.
Briefly the facts relating to the issue are the assessee a company is engaged in the business of manufacturing and processing of granite slabs and tiles. The assessee filed its return for the aforesaid assessment year claiming exemption u/s. 10B of the Act since the entire sale is through export. The assessments were completed for asst. Year 2003-04 u/s. 143(1) of the Act and for the assessment year 2004-05 and 2005-06 u/s. 143(3) of the Act by accepting the exemption claimed u/s. 10B of the Act. Subsequently, the Assessing Officer initiated proceedings u/s. 147 of the Act reopening the assessment for all the aforesaid assessment years having reason to believe that income has escaped assessment on account of exemption being wrongly allowed u/s. 10B, of the Act as the assessee is not engaged in any manufacturing activity and therefore the exemption was needed to be withdrawn. In course of the reassessment proceedings, the assessee objected to the reopening of the assessment by contending that the assessment cannot be reopened on a mere change of opinion. It was contended by the assessee that during the original assessment proceedings the assessee had submitted all the relevant materials and records and the Assessing Officer having examined all materials and completed the assessment by allowing exemption u/s. 10B, reopening of the assessment on considering the very same material would amount to change of opinion. The Assessing Officer completed the assessment u/s. 143(3) read with section 147 of the Act allowing deduction u/s. 10B of the Act. However, the Assessing Officer disallowed the claim of set off of unabsorbed depreciation brought forward from the assessment years 1995-96 and 1996-97. The assessee being aggrieved of the assessment order passed for the aforesaid years u/s. 143(3) read with section 147 preferred an appeal before the CIT (A).
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Before the CIT (A), the assessee challenged the initiation of proceedings u/s. 147 of the Act as well as the merits of disallowance. The CIT (A) while upholding the action of the Assessing Officer in initiating proceedings u/s. 147 of the Act for all the assessment years however allowed the assessee's contention with regard to merits of the...
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