TMI Blog2011 (12) TMI 229X X X X Extracts X X X X X X X X Extracts X X X X ..... JUSTICE SONIA GOKANI, JJ. For Appellant: MR RK PATEL For Respondent: MR MR BHATT, SR. ADV. WITH MRS MAUNA M BHATT ORAL ORDER (Per : HONOURABLE MR.JUSTICE AKIL KURESHI) Petitioner is a company registered under the Companies Act. It is assessed regularly to tax under the Income Tax Act, 1961 (Act for short). The petitioner has in the present petition, challenged the validity of notice dated 18.3.2011 issued by the Assessing Officer seeking to reopen the assessment previously framed on a scrutiny for the assessment year 2004-05. The petitioner has also challenged the order dated 11.10.2011, by which the petitioner's objections to such reopening of the assessment came to be disposed of. Brief facts are as follows: For the assessment year 2004-05, the assessee filed its return of income along with necessary documents including Auditors Reports in prescribed forms. Such return was taken in scrutiny assessment under section 143(3) of the Act. Such assessment previously framed after scrutiny was sought to be reopened by notice dated 28.10.09 on the ground that book profit under section 115JB of the Act was not computed correctly and further that exces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the petitioner submitted that the assessment previously framed after scrutiny is sought to be reopened beyond the period of four years from the end of relevant assessment year without any material on record to suggest that the income chargeable to tax had escaped assessment for the reasons of the assessee having failed to disclose fully and truly all material facts necessary for the assessment. Counsel for the petitioner submitted that the initial assessment was framed after thorough inquiry. The assessee had disclosed full facts. He drew our attention to the return filed by the assessee and the documents annexed therewith to contend that the petitioner had made full disclosures about the transactions with associated enterprise. Counsel submitted that even on facts, the Assessing Officer is not correct in contending that the assesseee was required to deduct TDS on payment of Rs.51.94 lacs as suggested by the Assessing Officer. Counsel vehemently contended that the entire issue has cropped up on the insistence of the Audit Party. He submitted that mere opinion of the audit party cannot form a basis for the Assessing Officer to believe that the income chargeable to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and so far as he was concerned, he did not believe at any time that income has escaped assessment on account of erroneous computation of benefit u/s 80HHC. He has been consistent in his submission of his report to the superior officers. The mere fact that as a subordinate officer he added the suggestion that if his view is not accepted, remedial actions may be taken cannot be said to be belief held by him. He has no authority to surrender or abdicate his function to his superiors, nor the superiors can arrogate to themselves authority. It needs hardly to be stated that in such circumstances conclusion is irresistible that thebelief that income has escaped assessment was not held at all by the officer having jurisdiction to issue notice and recording under the office note on 8.2.97 that he has reason to believe is a mere pretence to give validity to the exercise of power. In other words, it was a colourable exercise of jurisdiction by the assessing officer by recording reasons for holding a belief which in fact demonstrably he did not held that income of assessee has escaped assessment due to erroneous computation of deduction u/s 80HHC, for the reasons stated by the audit. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the petitioner was that the Assessing Officer had acted at the behest of the Audit Party and held no independent opinion on its own with respect to the income escaping assessment, we had called for the original records pertaining to the files of the assessee from the Revenue Department. Learned counsel Shri Bhatt after detailed search, made available a copy of the letter dated 21.5.2009 from one Ritu Singh Sharma, Asstt. Commissioner of Income-tax, in charge of this case at the relevant time addressed to the Senior Audit Officer. In the said letter, she has stated that the audit party has observed that for the amount in question TDS was required to be deducted. Thereupon, details were called for. She concluded that looking to the Board's circular dated 8th August 1995, TDS was not required to be deducted. Taking note of the explanation of the assessee she stated as under: In view of the above explanation, there was no under assessment in the assessee company's case in both the assessment years i.e. A.Y.2004-05 A.Y. 2005-06. Further, basis requirement of deducting tax u/s.195 is that whether payment of sum to an non-resident is chargeable to tax under the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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