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2016 (6) TMI 301 - HC - Income TaxReopening of assessment - existence of PE in India to which its profits are attributable - software income earned by ALF was taxed as royalty income under the provisions of the Act and the tax treaty - date of execution of the agreement with Indian customers was not taken into account - Held that:- The desperate attempt by the Revenue at trying to infer the failure to disclose material particulars because of the inconsistent stand of ALF on whether it has a PE in India deserves to be rejected. Reasons for the second time were recorded by the AO on 14th March 2013 for reopening the assessment for AY 2006-07 and 13th March 2013 for AY 2008-09. This was after the order dated 29th September 2012 of the CIT(A) which negatived the plea of ALF that it had no PE in India. The AO was aware that ALF was nevertheless maintaining its stand that it did not have a PE although it did not appeal against the order of the CIT(A). It cannot be said that there was any failure to disclose any material particulars only because ALF continued with its stand of not having a PE in India. In any event this was known to the AO and yet in the reasons recorded for reopening the assessment this is not referred to as a failure on the part of ALF to disclose true and material particulars. The reasons for reopening the assessment for AY 2004-05 do not made any reference to Section 44DA(1). Although it has been mentioned in the reasons for the other three AYs in question, this was not an issue that arose for the first time based on any tangible material that came to the notice of the AO subsequent to the original assessment orders which were themselves under Section 147 read with Section 143 (3) of the Act. As far as the issue regarding the agreements, this appears to be brought up for the first time at the stage of rejection of the objections. It did not form part of the original reasons for reopening the assessments. Section 147 is not to be casually invoked to suit the convenience of the Revenue and at every stage to correct the errors of AOs which could have easily been avoided had there been a proper discharge of the statutory duty. Once that legal perspective is kept in view, repeatedly invoking Section 147 of the Act on the same materials, only because there is no statutory bar against it, would constitute an abuse of the process of law. The Court would also like to observe that it is extraordinary that Sections 147 and 148 of the Act have been invoked by the Revenue not once but twice in respect of the same Assessee and on the same set of facts and same reasons. Thus there was no justification for the Revenue to have invoked the power under Sections 147 and 148 of the Act for the second time in respect of ALF for AYs 2004-05, 2005-06, 2006-07 and 2008-09 - Decided in favour of assessee The reasons for reopening merely repeat the words of the statute that there has been a failure by ALF to disclose material particulars. This is certainly not sufficient as far as the legal requirement is concerned. It has been repeatedly held by the Court that the mere repeating of the words in the statute is hardly sufficient compliance - Decided in favour of assessee
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