Reassessment beyond four years invalid without new tangible material if original scrutiny assessment consciously allowed deduction claim, constituting mere change of opinion.

ORDER 

Per: Anikesh Banerjee (JM):

Both the appeals filed by the assessee against the separate orders of the NFAC, Delhi [for brevity ‘the ld. CIT(A)], orders passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for assessment year 2011-12 and 2012- 13, date of both the orders 29.05.2025. Both the impugned orders emanated from the order of the Ld. Income-tax Officer, Ward 3(3), Mumbai (for brevity the “Ld. AO”) order passed under section 143(3) r.w.s. 147 of the Act date of orders 28.12.2018.

2. Both the appeals have same nature of fact and have a common issue. Both the appeals have taken together, heard together and disposed of by a common order. ITA No.4420/Mum/2025 for A.Y. 2011-12 is taken as lead case.

3. Assessee has taken the following grounds.

“1. The Hon CIT(A) erred in upholding the re-opening the assessment u/s 147 of the I. Tax Act 1961, by issue of notice u/s 148 dt 26.03.2018, not appreciating that the original assessment was completed u/s 143(3) and four years had lapsed from the end of the relevant asst year and as per first proviso to sec 147, the re-opening could not be without any omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment which being not the case, the re-opening of assessment u/s 147 is bad-in-law and the asst. order flowing therefrom is required to be struck down on that count.

2. The Hon CIT(A) erred in upholding the re-opening the assessment u/s 147 of the I. Tax Act 1961, by issue of the notice u/s 148 dt 26.03.2018, not appreciating that such re-opening was not valid as per law and therefore the notice u/s 148 dt. 26.03.2018 as well as the assessment order flowing therefrom were required to be struck down and quashed as bad-in- law.

3. The Hon CIT(A) erred in not appreciating that the Id AO had framed the assessment u/s 143(3) r.w.s. 147 of the I.T Act, 1961 on 28.12.2018, without issuing notice u/s 143(2) and therefore the re-assessment proceedings completed without issue of notice u/s 143(2) were invalid and bad in law and hence the order u/s 143(3) r.w.s. 147 dt 28.12.2018 was required to be struck down on that count.

4. The Hon CIT(A) erred in upholding the addition of Rs.3,40,39,914/- made by the Id AO by disallowing deduction claimed u/s 80IB (10) of the I. Tax Act, 1961, not appreciating that the housing project developed by the appellant fulfilled the conditions prescribed by u/s 80 IB(10) of the I.T Act 1961 and therefore the benefit of deduction u/s 80IB(10) of the IT Act, 1961 was required to be granted as claimed in the return of income.

5. The Hon CIT(A) erred in denying the appellant the deduction claimed u/s 801B(10) to the extent of Rs.3,40,39,914/- on the ground that commercial establishments of the housing project, exceeded the limit prescribed by sub section (d) to sec 80IB(10), ignoring the fact that the housing project for which deduction u/s 80IB (10) was claimed by the appellant did not contain any commercial premises and therefore the disallowance on the above ground was not justified.

6. The Hon CIT(A) erred in holding that the appellant was not eligible for deduction u/s 80IB(10) to the extent of Rs.3,40,39,914/- for the reason that certain residential units in the housing project had built up area exceeding 1000 sq. ft., not appreciating that the appellants project at village Bopar, Manpada Road, Dombivili was beyond 25 kms from the limits of Mumbai city and therefore eligible for units having built up area upto 1500 sq. feet and therefore disallowance was not justified.