Dear Subscriber,
The following important judgements are available for download at itatonline.org.
Sadbhav Engineering Ltd vs. DCIT (Gujarat High Court)
S. 147: Reopening, even within 4 years, solely on the basis of a clarificatory retrospective amendment is not permissible
In Katira Construction 352 ITR 513 (Guj) it was held that the Explanation to s. 80IA(4) was purely explanatory in nature and did not mend the existing statutory provisions. If an Explanation is added to a statute for the removal of doubts, the implication is that the law was same from the beginning and the same is further explained by way of addition of the Explanation. Therefore, it is not a case of introduction of new provision of law by retrospective operation, but when all the materials regarding activities of the assessee are available on record and the benefit of the provision is already made available to such assessee, reassessment proceedings cannot be initiated only on account of addition of such Explanation. On facts, as the AO had conducted a detailed scrutiny before allowing the s. 80-IA(4) deduction, the reopening based only on the retrospective insertion of the Explanation is on mere "change of opinion" (Parikshit Industries 352 ITR 349 (Guj) & Agrawal J.V. 83 DTR 101 (Guj) followed)
Sahkari Khand Udyog Mandal Ltd vs. ACIT (Gujarat High Court)
S. 147: Strict guidelines laid down to streamline procedure for reopening of assessments
(ii) It can thus be seen that there are four important stages once the AO issues notice for reopening of the assessment. Such stages are: (i) the assessee if he so wishes, may demand the reasons recorded by the AO after filing return in response to notice u/s 148 of the Act, (ii) the AO supplying such reasons to the assessee, (iii) the assessee raising objections to the notice for reopening and (iv) the AO disposing of the objections raised by the assessee. With a view to streamlining this procedure, and to ensure, as far as possible, the AO is not faced with the unenviable task of completing the assessment proceedings in a few days left before the same became time barred, we would like to give certain directions of general implication which, we would expect, are followed by all concerned. While doing so, we are conscious that these stages are provided by the Supreme Court in GKN Driveshafts (India) Ltd 259 ITR 19 and we would be giving directions only to the extent the said judgment already does not provide for. We have noticed that considerably long time is consumed sometimes by the assessee demanding the reasons recorded by the Assessing Officer and sometimes the AO complying with such a request of the assessee. It is an accepted proposition that the reasons recorded by the AO are not confidential and the assessee whose assessment is being reopened has a right to know such reasons. We therefore thought that these two stages can be substantially eliminated by giving suitable directions. The further stage is of the assessee raising objections which often times is done after much delay and the last stage comes where the AO deals with such objections. This is yet another problem area where unduly long time is consumed by the AO. Under the circumstances, following directions are issued:
Regards,
Editor,
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