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2018 (1) TMI 1540 - AT - Income TaxReopening of assessment u/s 147 - TDS u/s 195 - payment to foreign company without deducting tax - HELD THAT:- In view of the specific agreement between the assessee and M/s. Canadian Crystalline Emirates Trading Company, UAE, it is obvious that M/s. Canadian Crystalline Emirates Trading Company, UAE has erected and commissioned the desalination equipment outside the country, therefore, it cannot be construed to be a technical service within the meaning of Section 9(1)(vii) - this Tribunal is of the considered opinion that the fee paid by the assessee to M/s. Canadian Crystalline Emirates Trading Company, UAE is not a fee for technical service. Hence, it does not require any deduction of tax under Section 195 of the Act. Therefore, no income has escaped from taxation. As the original assessment order u/s 143(3) of the Act was passed on 29.12.2011. Therefore, AO after scrutinizing the entire material available on record, allowed the claim of the assessee. In the case before High Court, it was only an intimation under Section 143(1)(a) but in this case it is an order passed by the Assessing Officer under Section 143(3) of the Act. The reassessment proceedings were initiated on the basis of the return and its enclosures. No tangible or new material came to the possession of the Assessing Officer subsequently. In the absence of any tangible material which came to the possession of the Assessing Officer, the proceeding cannot be reopened by issuing notice under Section 148 of the Act. Since the scrutiny proceeding under Section 143(3) of the Act was completed by an order dated 29.12.2011, in view of the judgment of Tanmac India [2017 (1) TMI 122 - MADRAS HIGH COURT] AO cannot reopen the completed assessment in the absence of any new or tangible material. Therefore, even the reopening of assessment itself is invalid in law. - Decided in favour of assessee.
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