Valco Industries Ltd Vs ACIT (ITAT Chandigarh)
Facts-
The assessee originally filed return declaring total income of Rs.4,83,83,620/- on 28.09.2012 after claiming deduction of Rs.5,75,64,789/- u/s 80IC of the Act. The assessment was completed u/s 143(3) of the Act on 27.03.2015 at an income of Rs.8,07,03,620/- after making an addition of Rs.3,23,20,000/- on account of share of assessee company in industrial property by making the calculation of the share of the assessee company at 20%. Subsequently, notice u/s 148 of the Act dated 10.03.2017 was issued.
In response to the notice issued u/s 148 of the Act, the assessee intimated the AO that the return already filed u/s 139(1) of the Act may be treated as return in response to notice u/s 148 of the Act and also requested the AO to supply the copy of reasons recorded for reopening of the case. Thereafter, the assessee filed objections against the issuance of notice u/s 148 of the Act which were disposed off by the AO rejecting the assessee’s objection against the issuance of notice u/s 148 of the Act. Thereafter, the assessment was finalized in terms of section 147 r.w.s. 143(3) of the Act after making a disallowance of Rs.4,09,45,317/- being alleged excess claim of deduction u/s 80IC of the Act. Another addition of Rs.48,43,000/- was made on account of difference in share of the assessee company in industrial property. The assessment was completed at Rs.12,64,93,000/-.
Aggrieved, the assessee carried the matter before the Learned First Appellate Authority challenging the invocation of jurisdiction u/s 147 of the Act on legal grounds. The assessee also challenged the disallowances/additions on merits. The Ld.CIT(A) dismissed the assessee’s legal challenge to the invocation of jurisdiction u/s 148 of the Act. On merits, the Ld.CIT(A) upheld the addition on account of difference in the share percentage in industrial property. The Ld.CIT(A) also upheld the disallowance made u/s 80IC of the Act. Aggrieved, the assessee has now approached this Tribunal.
Conclusion-
It is therefore, clear that the basis for a valid reopening of assessment should be availability of tangible material, which can lead the AO to scrutinize the returns for the previous assessment year in question, to determine, whether a notice under Section 147 is called for.
Accordingly, in view of the settled judicial precedents as noted above, we cannot endorse the reopening of the assessment in the present case. Moreover, it is our considered view that reopening for the captioned year at this juncture which also now runs against the order passed by the Tribunal cannot be upheld. We uphold the entire reassessment proceedings to be bad in law.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
This appeal is preferred by the assessee against the order dated 31.08.2021 of Learned Commissioner of Income Tax (Appeals)-3, Gurgaon [in short the ‘Ld.CI T(A)’], passed u/s 250(6) of the Income Tax Act, 1961 (in short ‘the Act’) for the assessment year 2012-13.
2.0 The brief facts of the case are that the assessee is the manufacturer of Aluminum Extrusion having its unit-II at Baddi, Himachal Pradesh. The return declaring total income of Rs.4,83,83,620/- was originally filed on 28.09.2012 after claiming deduction of Rs.5,75,64,789/- u/s 80IC of the Act. The assessment was completed u/s 143(3) of the Act on 27.03.2015 at an income of Rs.8,07,03,620/- after making an addition of Rs.3,23,20,000/- on account of share of assessee company in industrial property by making the calculation of the share of the assessee company at 20%.
2.1 Subsequently, notice u/s 148 of the Act dated 10.03.2017 was issued after recording the following reasons:
Reasons recorded for re-opening of case u/s 147 of the I.T. Act, 1961
