TMI Blog2012 (5) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... e letters addressed to the petitioner which indicated his presence in India – against assessee. - WP(C)NO. 14042/2009 - - - Dated:- 3-5-2012 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr.B.N.Goswami, Advocate. For Respondent: Mr. A.S.Chandiok, ASG with Mr.Ritesh Kumar, Ms. Shweta Gupta and Mr.Piyus Sanghi, Advocates. R.V. EASWAR, J.: This writ petition under Section 226 of the Constitution has been filed by Aditya Khanna, who is a non-resident individual. The petitioner seeks the issue of a writ of certiorari or any other order/writ /direction to quash the notice issued by the respondent, who is the Assistant Commissioner of Income Tax Central Circle-V, New Delhi, under Section 148 of the Income Tax Act (hereinafter referred to as the Act‟) on 17.2.2009. A prayer is also made for quashing the letter/order dated 20.11.2009 issued by the respondent rejecting the objections filed by the petitioner to the notice. 2. The following are the brief facts which have given rise to the present petition. For the assessment years 2002-03 the petitioner filed a return of income in the status of a non-resident and declared property i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been seized by the Enforcement Directorate from the premises of M/s Hamdaan Exports and one Andaleeb Sehgal of A-53, Ground Floor, Punchsheel Enclave, New Delhi which are alleged to be relating to Indrus. It was further pointed out by the respondent in the letter/order that the seized documents also established that the business operations of Indrus were managed from the premises of Andaleeb Sehgal and they thus establish the petitioner‟s business connection in India. On this basis, the respondent stated in the letter that commission monies were retained in the account of Indrus to the extent of US$ 146247 received by Indrus in its bank account in Channel Island, out of which US$ 18247 belonged to the petitioner. This amount, according to the respondent, had escaped assessment. The petitioner was therefore directed by the respondent to appear before him on 6th December, 2009 for further hearing. 4. The petitioner wrote another letter to the respondent on 10th December, 2009 again reiterating his earlier contentions which were basically that he was a non-resident and therefore was not assessable in respect of any income unless it was deemed to have accrued or arisen in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Volcker committee. After submission of the Volcker Committee report the Indian Government appointed Justice R. S. Pathak Inquiry Authority to look into the case of corruptions pertaining to Indian entities. Subsequently, investigations have been carried out by the Enforcement Directorate and the Investigation Wing. Information has been received from Enforcement Directorate and Investigation Wing, about transfer of commission money from Masefield to beneficiaries in lieu of the two Oil Contracts M/09/54 and M/10/57 awarded by State Oil Marketing Organization, Iraq. It has been observed that Shri Aditya Khanna has earned income from business which was being controlled from Indian Territory. It has been further observed that his role in the two oil contracts was that of providing services of Shri George Curmi, consultant who in turn got the buyer M/s Masefield as also providing the bank account of M/s Indrus for channelizing the commission money. The commission money retained in Indrus was his share of Booty @ 1 cent per barrel as agreed upon between him and Shri Andaleeb Sehgal. A sum of USD 146247.23 has been received in A/c no. 73427968 of M/s Indrus Trading Company Ltd., Jer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Special Director, Enforcement Directorate. In the statement given on 28th April, 2006 the petitioner stated how much was his share for introducing Masefield to Andaleeb Sehgal. In the statement given on 18th May, 2006, the petitioner stated that he was offered the proposal by Andaleeb Sehgal (referred to in the statement as Andy) to utilise the opportunity to get some crude oil allocation from Iraq which can be bought by some company interested in the same. The petitioner apparently acted on the proposal and contacted George Curmi, who was able to find M/s Masefiled who was interested in getting the oil. George Curmi introduced the petitioner and Andaleeb Sehgal to M/s Masefield. Indrus was a company in which Andaleeb Sehgal was interested. However, in the statement the petitioner had admitted his role under the oil allocations as an introducer. He denied that he gave any instructions for the contract and stated that all this work was done only by Andaleeb Sehgal. The petitioner had also stated before the Enforcement Directorate that he had discussed this with Andaleeb Sehgal in India recently. The petitioner also indicated some of his discussions with Andaleeb Sehgal. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f recording reasons and issue of notice for reopening the assessment the Assessing Officer is only required to form a prima facie belief regarding escapement of income, it is difficult to accept the contention of the learned counsel for the petitioner that the notice issued under Section 148 was without jurisdiction. We are concerned with the assessment year 2002-03 in respect of which the original assessment was completed under Section 143(1) without any enquiry. The notice under Section 148 was issued on 17th February, 2009, after a period of four years but before the period of six years from the end of the assessment year. This is a case to which the first proviso to Section 147 will not apply as there is no previous assessment under Section 143(3) or 147 of the Act. It is not necessary for the respondent to show that the petitioner had not made a full and true disclosure of the primary facts at the time of the original assessment. Even otherwise, since there was no scrutiny of the return, it is only the documents which were filed with the return of income that can show whether the petitioner had furnished full and true particulars along with the return of income. These are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (1) of Section 9 says that all income accruing or arising, whether directly or indirectly, through or from any business connection in India shall be deemed to accrue or arise in India. Mr. Goswami, the learned counsel for the petitioner strongly relied on the judgment of the Supreme Court in Commissioner of Income-tax. v. R.D. Aggarwal and Co. (1965) 56 ITR 20. On the basis of the judgment, he contended that the expression business connection postulates a real and intimate relation between the business carried on by a non-resident which yields profits and gains and some activity in the taxable territories which contributes directly or indirectly to the earning of those profits or gains. 14. The contention of the learned counsel for the petitioner, which is put forth with considerable vehemence before us, touches upon the merits of the matter. As we have already noted, at the stage of issuing notice to reopen the assessment, the merits of the matter are not to be decided. What is required to be examined is only whether there was material before the Assessing Officer on the basis of which he could come to the prima facie belief about escapement of income. The question wheth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad come into the bank account of Indrus. There is also evidence to show that certain communications had been addressed to the petitioner in India. The Indian fax number of the petitioner was given in some of the letters addressed to the petitioner which indicated his presence in India. Several documents which were found by the Enforcement Directorate in the premises of Hamdaan Exports/Andaleeb Sehgal in Punchsheel Enclave, New Delhi were found to have been addressed to the petitioner which, according to the respondent, indicated that the petitioner was present in India. Thus, there is prima facie material on the basis of which the Assessing Officer could have reasonably formed the belief that the affairs of Indrus were being controlled from India and had a business connection in India. Petitioner‟s money was kept and retained in the bank account of Indrus as per directions/ instructions issued from India and, therefore, despite the petitioner‟s status as non-resident, he was assessable in respect of the commission income received by him outside India for services also rendered by him outside India. The finer or nicer questions, which may be both of facts and law, as to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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