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2022 (9) TMI 1312 - AT - Income TaxValidity of reopening assessment u/s 147 - there was no regular assessment under section 143(3) - approval for scrutiny assessment - whether the reopening of assessment under section 147 of the Act meets legal requirement? - core activities related to software development were undertaken in India on behalf of the assessee, hence, the Hyderabad unit of OIPL for all intent and purposes constitutes the PE of the assessee in India and even in respect of global deals, thus the royalty earned by the assessee would be attributable to the PE - AY: 1997-98 - HELD THAT:- As the reasons recorded for reopening of assessment is without independent application of mind but simply based on conclusions drawn in the subsequent assessment years without having any tangible material. It is further evident, the reasons recorded do not have any live link with material/information in possession of the Assessing Officer which could have establish escapement of income for the impugned assessment year. Thus, it is very much evident, the assessment has been reopened merely on reason to suspect rather than reason to belief. Thus, in our view, the reopening of assessment made by the AO on irrelevant facts and on a mere reason to suspect cannot survive. We hold that the reopening of assessment for the impugned assessment year is invalid. Hence, the subsequent action taken by the Assessing Officer in pursuance thereof resulting in the impugned assessment order is also invalid. Accordingly, we quash the assessment order for the impugned assessment year. Therefore, the impugned order of learned Commissioner (Appeals) having no leg to stand, is hereby set aside. Reasons recorded nor anywhere else the Assessing Officer in specific terms has stated that the alleged escapement of income is on account of failure of the assessee to disclose the particulars of his income truly and correctly - AY: 1998-99 AND AY: 1999-00 - As due to non-fulfillment of the conditions prescribed under the first proviso to section 147 of the Act, the reopening of assessment is invalid. Consequently, the assessment orders passed under section 143(3) read with section 147 of the Act for both the assessment years, being invalid, are quashed. As a natural corollary the impugned orders of learned Commissioner (Appeals) are hereby set aside. No valid issuance and service of notice under section 143(2) - AY: 2000-01 - It is the specific contention of the assessee before us that the Assessing Officer had failed to issue any notice under section 143(2) of the Act in course of assessment proceeding. Though, in the body of the assessment order the Assessing Officer has mentioned that notice under section 143(2) of the Act was issued to the assessee, however, in response to query raised by us, learned Departmental Representative was unable to controvert assessee’s allegation that no notice under section 143(2) of the Act was ever issued to the assessee. No contrary evidence was placed before us by the department to establish valid issuance and service of notice under section 143(2) of the Act on the assessee - in absence of a valid issuance and service of notice under section 143(2) of the Act on assessee, the present proceeding has become invalid. All appeal of assessee allowed.
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