IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI S.V. MEHROTRA : ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE : JUDICIAL MEMBER ITA no. 4644/Del/2009 U/s 2001-02 Claas India Pvt. Ltd., Vs. ACIT Circle 3(1), [Formerly known as Escorts New Delhi. Claas Ltd.], A-39, First Floor, New Friends Colony, New Delhi. 110025 PAN: AAACE 0762 (Appellant) ( Respondent) Appellant by : Shri Alkesh Babbar CA Respondent : Shri Anil Kumar Saroha Sr. DR Date of hearing : 14/09/2016. Date of order : 20/09/2016. ORDER PER S.V. MEHROTRA, A.M: This is assessees appeal against order dated 11.05.2009 passed by ld. CIT(Appeals)-VI, New Delhi in appeal no. 68/08-09 relating to AY 2001-02. 2 2. At outset we may point out that as per Registrys report, there was delay of 111 days in filing appeal before ITAT. assessee in its application dated 4.12.2009 for condonation of delay submitted as under: December 4.2009 Hon'ble Member Income Tax Appellate Tribunal 10th Floor, Lok ayak Bhawan Khan Market New Delhi 110003 Dear Sir, Re: Condonation of delay - Appeal for Assessment Year 2001- 02 order of learned Commissioner of Income Tax (Appeals) VI, New Delhi was passed on 11.5.2009 and was received by assessee in June 2009. assessee decided not to file appeal in view of conflicting judgments of Courts. appeal is being filed now as result of favourable judgment of Delhi High Court dated 18th August, 2009 reported in 318 ITR 295. It has been published in Part 3 dated 9th November, 2009. case of assessee is exactly similar to abovementioned case decided by Delhi High Court. As such, above judgment fully applies to assessee. It lays down that notice issued u/s 148 is not valid as action taken by Assessing Officer amounted to change of opinion. It is humbly requested that delay in filing appeal be kindly condoned in light of above. 3 Thanking you, Yours faithfully, For Claas India Private Limited 2.1. In support of aforementioned contention assessee also filed affidavit of Pradeep Kumar Malik, Managing Director of company, as under: I, Pradeep Kumar Malik do hereby solemnly affirm and declare as under: 1. That order of CIT (Appeal) - VI for assessment year 2001-02 relating to proceedings initiated u/s 147 of Income Tax Act, 1961 was received in May, 2009 by assessee. 2. That issue on which case was reopened was in regard to reliefs u/s 80-HHC and u/s 80-1 B of Income Tax Act, 1961 having been given by Assessing Officer on same profit figure instead of Section 80-HHC relief being given on profits remaining after granting deduction u/s 80-18 of Act. 3. That assessee was advised on 22nd June 2009 that no appeal be filed to ITAT as favourable High Court decisions on issue involved had been reversed by ITAT decision in which amendment to Act had been fully discussed and that said amendment had not been gone into by High Courts 4. That in early December, 2009, assessee was informed that Delhi High Court decision in case of Carlton Overseas Private Limited [31 r ITR 2951 had been reported which fully applied to case of assessee and therefore assessee was advised to file all appeal to Hon'ble ITAT. said judgment was published in Part 3 of 318 ITR on 9th November, 2009. 4 5. That assessee thereafter, without any loss of time filed appeal on 9th December, 2009 with application for condonation of delay. 2.2. In reply, ld. DR filed written submissions stating that there was no reasonable cause for condonation of delay. Ld. DR has also relied on various case laws as mentioned in written submissions. 2.3. Having considered submissions of both parties, we are of opinion that since delay in filing appeal was on account of legal advice, therefore, there being reasonable cause for delay, we condone delay in filing appeal. 3. Brief facts of case are that assessee had filed return of income declaring income of Rs. 8,10,12,600/-. Regular assessment u/s 143(3) was completed on 24.2.2004 at income of Rs. 8,91,11,357/-. Subsequently, AO noticed that assessee had claimed and was allowed deduction of Rs. 3,02,00,144/- u/s 80IA on total profit of business of Rs. 126557837/- and further claimed and was allowed deduction of Rs. 70,73,012/- u/s 80HHC on same profit of business of Rs. 3,02,00,144/- without reducing profit by Rs. 3,02,00,144/-, attributed to manufacturing business. He noted that u/s 80IA(9) of I.T. Act, it was provided that w.e.f. AY 1999-2000 where any amount of profits and gains of industrial undertaking or enterprise in case of assessee was claimed and allowed under any other provisions of Chapter VI-A under heading C-Deductions in 5 respect of certain incomes and in no case would exceed eligible profit of industrial undertaking or enterprises, as case may be. He, therefore, concluded that deduction u/s 80HHC had been excess claimed and allowed. Accordingly, case was reopened u/s 147, after recording reasons and after obtaining approval from Commissioner. assessment was, accordingly, completed at total income of Rs. 9,08,21,207/-. Ld. CIT(A) confirmed action of AO. Aggrieved, assessee is in appeal before Tribunal and has taken following grounds of appeal: 1. That learned Commissioner of Income Tax [Appeals] VI has grossly erred in law and on facts. (a) In confirming order passed u/s 147 of Income Tax Act by Assessing Officer though assessee had taken ground that order passed u/s 147 is bad in law and on facts. (b) in not quashing order of' Assessing Officer u/s 147 when no new facts had come on record and notice merely based on change of opinion on basis of same material which was already available with Assessing Officer at lime of making initial assessment u/s 143(3) of Income Tax Act. 1961. 2. That any consequential relief to which assessee may be entitled under foregoing grounds of appeal may be kindly granted to assessee. 6 4. At outset ld. counsel submitted that under given facts reassessment proceedings cannot be initiated because it amounts to change of opinion. He pointed out that issue of simultaneous claim of deduction u/s 80HHC and u/s 80IA of Act and subsequent reopening of assessment has been dealt by Hon ble Delhi High Court in number of cases and Court has held as under: CARLTON OVERSEAS PVT. LTD. [318 ITR 295]- case was 100% similar to that of Appellant. However, in this case writ was filed. assessee had claimed deduction under sections 80HHC and 80-IB. Assessing Officer after making necessary queries passed order of assessment allowing deductions claimed. Subsequently, on basis of objection of audit party, he issued notice under section 147/148 to assessee on ground that deduction allowed to it under section 80-IA was not deducted from profit of business for purpose of calculating deduction under section 80HHC. court held that it is settled law that mere change of opinion cannot form basis for issuing of notice under Section 147/148 of Act and Court quashed notice issued u/s 148 on ground that it constituted change of opinion. Date of Decision: August 9, 2009 ii. . SATNAM OVERSEAS [329 ITR 237] - court held that new opinion formed by AO based on existing facts was nothing but change of opinion and was not valid ground for reassessment. This case is also similar to case of Appellant. Date of Decision: December 11, 2009 iii. RAJKUMAR MAHAJAN [340 ITR 570] - asssessee claimed deduction under sections 80HHC and 80-IAlIB. Subsequently, Assessing Officer issued notice under section 148 on ground that assessee had claimed excess deduction under section 80HHC court held that reassessment on ground of deduction u/s 80 7 HHC/80 IA wrongly claimed was nothing but change of opinion and was not valid ground for reassessment. This case is also similar to case of Appellant. Date of Decision: January 4, 2012 iv. Purolator India Ltd. [343 ITR 155] assessment was completed under section 143(3) . Subsequently, reassessment proceedings were initiated after expiry of four years from end of relevant assessment year on ground that deduction under section 80HHC was allowed without reducing deduction claimed and allowed under section 80-lB. Tribunal held that there was no failure on part of assessee to disclose fully and truly all material facts, opined that reassessment proceedings were hit by proviso to section 147. high court held that since it was not revenue's case that assessee had suppressed, misrepresented or falsified record/facts, order passed by Tribunal was upheld and appeal by revenue was dismissed. This case is also similar to case of Appellant. Date of Decision: November 28, 2011 5. Ld. DR submitted that no ground challenging reassessment proceedings was taken before CIT(A). 6. We have considered submissions of both parties and perused material available on record. We find that before ld. CIT(A) assessee had, inter alia, taken ground that order of ld. ACIT passed u/s 147/143(3) was bad in law and on facts. It is true that no specific ground was taken but assessee had challenged assessment order being bad in law. Be that as it may, this being legal ground, can be taken at any stage of proceedings being jurisdictional in nature. Further, we find that issue is squarely covered by decisions relied upon by ld. counsel for assessee, 8 wherein it has been held that where assessee had claimed deduction u/s 80HHC and 80IA and, AO, after making necessary queries, passed assessment order allowing deduction, then subsequently reassessment proceedings cannot be initiated on ground that deduction allowed to it u/s 80IA was not deducted from profits of business for purpose of calculating of deduction u/s 80HHC. We, therefore, respectfully following decision of Hon ble Jurisdictional High Court, noted supra, allow assessees appeal. 7. In result, assessees appeal is allowed. Order pronouncement in open court on 20/09/2016. Sd/- Sd/- (SUCHITRA KAMBLE) (S.V. MEHROTRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 20/09/2016. MP Copy of order to: 1. Assessee 2. AO 3. CIT 4. CIT(A) 5. DR, ITAT, New Delhi. Claas India Pvt. Ltd., [Formerly known as Escorts Claas Ltd.] v. ACIT Circle 3(1), New Delhi