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2021 (6) TMI 915 - MADRAS HIGH COURTReopening of assessment u/s 147 - TP Adjustment - order impugned passed by the Transfer Pricing Officer with regard to the reference made by the Assessing Officer regarding certain international transactions or otherwise - suo-motu powers conferred to the Transfer Pricing Officer under Sub-Section 2B of Section 92 CA - Whether re-opening of assessment proceedings would not fall under Sub-Section 2B or Sub-Section 2C of Section 92 CA of the Act.? - HELD THAT:- When the assessment includes reassessment, the Assessing Officer while conducting the reassessment proceedings, is undoubtedly empowered to seek further informations or details to cull out the truth and the very purpose and object of reassessment contemplated under Section 147 of the Act is to ensure that the assessee pay the tax as applicable. The original assessment is made pursuant to the return of income filed by the assessee. The scope of scrutiny or enquiry at the time of original assessment is entirely different. Thus, in the event of re-opening of assessment and during re-assessment, the authorities competent necessarily have to cull out more details and informations from the authorities concerned for the purpose of ascertaining the truth regarding the tax escaped assessment - the purpose of Section 147 for reopening of assessment cannot be restricted nor the power of reassessment of the Assessing officer for collecting the evidences or materials or informations from the authorities concerned cannot be crippled down by wrongly interpreting the other provisions of the Income Tax Act. Constructive interpretation is imminent in such circumstances in order to ensure that the purpose and object of the Act is met with in its letter and spirit. The impugned order is not a suo-motu proceedings initiated by the Transfer Pricing Officer under Sub-Section 2B of Section 92CA of the Act and therefore, Sub-Section 2C of Section 92CA of the Act would not be applicable. The circumstances contemplated under Sub-Section 2B of Section 92 CA is not applicable in the present case, in view of the fact that the petitioner admittedly submitted the Audit Report under Section 92-E of the Act. This Court is of the considered opinion that there is no infirmity or perversity as such in respect of the order impugned passed by the Transfer Pricing Officer with regard to the reference made by the Assessing Officer regarding certain international transactions or otherwise. Thus, the petitioner has not established any acceptable ground for the purpose of considering the relief as such sought for in the present writ petition. Reopening of assessment for credit for withholding tax paid in Singapore cannot be allowed as TDS - HELD THAT:- As apparent that the amount lent to the Singapore company was actually borrowed by the assessee company and interest expenditure on money borrowed has also been claimed resulting in no real interest income on netting. Hence, in the absence of real interest income offered in India, relief under Section 90 of the Income Tax Act, 1961 on the tax withheld at Singapore may also be not available. Thus, the Assessing Officer has reason to believe that the income has escaped assessment. Such a finding is relevant for the purpose of constituting a Prima-facie case for re-opening of assessment by invoking Section 147 of the Act. The petitioner has to defend his case by availing the opportunities to be provided by the Department in this regard. As during the process of re-opening, the Assessing Officer requested details and informations from the Transfer Pricing Officer and the report in this regard furnished by the Transfer Pricing Officer is also to be considered and a final order of assessment is to be passed as expeditiously as possible by following the procedures contemplated and by affording opportunity to the petitioner / assessee.
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