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2014 (12) TMI 5 - AT - Income TaxValidity of reopening of assessment u/s 148 - reason to believe – failure of assessee brought on record or not – Lack of coordination between AOs - Held that:- The Proviso casts onus on the AO to prove failure of the assessee - the AO had to mention, in the reasons recorded, about the alleged failure and had to explain as which material facts were not disclosed by the assessee - the assessee original assessment was completed u/s. 143(3) of the Act, that the AO had issued notice u/s. 148 as the AO had reasons to believe that taxable income had escaped assessment, that the assessee had objected to the notice issued u/s. 148, that the FAA had upheld the reopening of assessment, that the AO had never held that there was any failure on part of the assessee to disclose material facts fully and truly - because of between the DDIT(IT)and certain amounts remained untaxed - He had not held that the assessee had concealed the facts that resulted in escapement of income - If there was lack of coordination between two AOs, the assessee cannot be penalised for that - The power to reopen a completed assessment is one of the extraordinary powers conferred upon the AOs, but it cannot be used in a routine matter-especially when a notice u/s. 148 of the Act is to issue after four years - failure of the assessee had not been brought on record - the re-assessment proceedings were not initiated validly – thus, the order of the FAA is set aside as the reopening id bad in law – Decided in favour of assessee. Validity of notice for reopening of assessment u/s 148 – Held that:- Notice u/s. 148 was issue within the four year - The basis for reopening was taxation of royalty income in the hands of recipient - once the AO found out the factual position about the payment, he reached at certain conclusions and initiated proceedings u/s. 147 - Established principles of reopening envisage that there should be reasons to believe that taxable income had escaped assessment - the Tribunal cannot and should not enter into the merits of the subjective satisfaction of the AO nor should judge the sufficiency of the reasons recorded - What can be seen to whether the belief of the AO is based on tangible, concrete and new information and whether it is capable of supporting such a conclusion - The law only requires that the information or material on which the AO records his or her satisfaction is communicated to the assessee - The satisfaction arrived at by the AO should be prima facie level - AO had rightly invoked the provisions of section 147 of the Act for reopening the assessment – Decided against assessee. Payment made to MTV Asia and other parties – Held that:- The ADIT (IT)-3(2), Mumbai passed u/s. 197 of the Act, addressed to MTV Asia, has directed it that taxes be deducted at source at 4. 30% from the sums payable as distribution revenue to the assessee under its agreement with MNIPL - the assessee had made detailed submissions and had requested the FAA to admit additional evidence, in form of confirmation certificates from the banks/extracts from NSDL website about the payment of taxes, as per the provisions of section 46A of the Income tax Rules, 1962 (Rules) - the assessee had filed a detailed explanation about deducted taxes and reasons for non-deduction of taxes – thus, the matter is to be remitted back to the FAA for fresh adjudication – Decided partly in favour of assessee.
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