The Income Tax Appellate Tribunal (ITAT), Chandigarh bench has held that the re-opening of assessment under section 147/148 of the Income Tax Act, 1961 is not valid.
The assessee company, M/s Valco Industriesclaimed deduction @ 100% on its new undertakingup to assessment year 2009-10. Thereafter, the assessee undertook substantial expansion and it is the assessee’s claim that the substantial expansion took place in assessment year 2009-10 and, therefore, the assessee was eligible for claim of deduction u/s 80IC of the Act again @ 100% from assessment year 2009-10 to assessment year 2013-14. The assessee’s claim, both in assessment years 2010-11 and 2012-13, was initially allowed by the AO by accepting the assessee’s claim u/s 143(3) of the Act. However, later on, the AO reached a conclusion that the initial assessment year with respect to substantial expansion was assessment year 2007- 08. The assessments for assessment years 2010-11 and 2012-13 were subsequently reopened.
The Tribunal upheld the argument of the assessee that the department had passed the impugned order on 31.08.2021, the order of the Tribunal dated 14.06.2019 for assessment years 2010-11 and 2013- 14 had already been pronounced wherein the assessee’s claim for deduction u/s 80IC of the Act @ 100% had been accepted by the Tribunal and also by the Department in as much as there was no further appeal by the Department against this order of the Tribunal.
“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. Accordingly, We allow ground Nos.1 and 2 raised by the assessee and hold that the reopening vis-à-vis the assessee’s claim fordeduction u/s 80IC of the Act was bad in law and deserves to be set aside,” the Tribunal said.
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