Reopening U/s. 147 even within 4 years, on basis of retrospective amendment invalid

Ganesh Housing Corporation Ltd Vs. DCIT (Gujarat High Court)

Main reason for opening the assessment is that in the light of the Explanation inserted to Section 80-1B (10) by the Finance Act (No. 2), Act 2009 with retrospective effect from 01.04.2000, deduction u/s 801B (1 0) shall not be admissible to a contractor in respect of works contract awarded by any person.

Assessing Officer has on the basis of the materials originally placed by Assessee held that the Assessing Officer in the assessment proceedings u/s 143(3) did not give any opinion regarding the allowability or otherwise of deduction u/s 80IB (10) of the Act. If an issue has not been examined in correct perspective in the initial assessment proceedings, nothing prevents the assessing officer to take a suitable remedial action by way of re-opening the assessment.

It is now a settled law that if an explanation is added to a section of a statute for the removal of doubts, the implication is that the law was the same from the very beginning and the same is further explained by way of addition of the Explanation. Thus, it is not a case of introduction of new provision of law by retrospective operation. We find that the petitioner had disclosed all the materials relevant for the purpose of getting the benefit under Section 80IB of the Act and there was no suppression of materials. In spite of full disclosure, the Assessing Officer gave benefit of the provision by considering the materials on record and thus, it cannot be said that any income escaped assessment in accordance with law. We find that the Assessing Officer has now given a second thought over the same materials.

Similarly, the fact that the Assessing Officer in the assessment proceedings under section 143(3) of the Act did not give any opinion regarding the allow ability or otherwise of  deduction u/s 80IB (10) of the Act is not a ground of invoking Section 147 of the Act.

FULL TEXT OF THE ABOVE JUDGMENT IS AS FOLLOWS:-

HIGH COURT OF GUJARAT AT AHMEDABAD

SPECIAL CIVIL APPLICATION No. 15067 of 2011

GANESH HOUSING CORPORATION LTD
Versus
DY.COMMISSIONER OF INCOME-TAX,CIRCLE 4 & ANR.