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2020 (1) TMI 56 - DELHI HIGH COURTReasons for reopening of the assessment u/s 147 - EDC paid to HUDA was subject to TDS under Section 194 - HELD THAT:- On perusal of the Scrutiny questionnaires issued by the AO and the information furnished in response thereto by the Assessee that there has been no failure on the part of the Assessee in furnishing the information. On the other hand, there appears to be non application of mind on such material on the part of the AO to make an appropriate determination in accordance with law. Thus, the AO cannot now review its decision, having failed to perform its statutory duty and therefore the impugned action of reopening is nothing but a change of opinion. Mr. Kaushik’s another submission also merits consideration. He argues that the AO has not cared to analyse the applicability of the proviso to Section 40 (a) (ia) on the facts and circumstances of the case. The assessee shall be deemed to have deducted and deposited tax, if the recipient of income pays tax on payments received, even though the Assessee has not deducted TDS for such payment. In such a situation, there can be no disallowance under Section 40 (a) (ia) in the hands of the Assessee. This ignorance cannot escape our judicial notice, as the assessment is sought to be reopened after a period of four years from the end of the relevant assessment year. The notice does not state that the EDC charges collected by HUDA have not been subjected to tax as income in the hands of HUDA. This also shows non-application of mind that warrants our interference. - Decided in favour of assessee.
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