9911796707
TMI Blog2012 (5) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... me in the status of a non-resident and declared property income and interest income therein. It would appear that the return was accepted under Section 143(1) of the Act. On 17th February, 2009 the respondent issued a notice under Section 148, which is the impugned notice, calling upon the petitioner to deliver a return of income for the assessment year 2002-03 on the ground that income chargeable to tax had escaped assessment. In response to the notice the petitioner sent a reply pointing out that he is a non-resident and had no income chargeable to tax in India other than what was declared in the return filed earlier. The petitioner also requested the respondent to supply a copy of the reasons required to be recorded under Section 148(2) for reopening the assessment. The respondent complied with the request of the petitioner and by a letter dated 10th August, 2009, furnished the copy of the reasons recorded for reopening the assessment. On receipt of the reasons, the petitioner wrote a letter on 24th August, 2009 to the respondent stating therein that he was a non-resident and this status has been accepted in the assessment made for the assessment years 2000-01, 2005-06 and 2006- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f any income unless it was deemed to have accrued or arisen in India and that there was no justification for taking any view different from the view taken in his earlier assessments. A request was made to permit the petitioner to file further reply in regard to the notice issued under Section 148. 5. The present writ petition has been filed challenging the assumption of jurisdiction to reopen the assessment under Section 147/148 of the Act and for quashing the notice issued under Section 148 and the letter/order of the respondent rejecting the objections filed by the petitioner. 6. At the stage of issue of notice under Section 148 of the Act to reopen the assessment on the ground of income escaping assessment, the Assessing Officer is not expected to make out a fool proof case or reach a firm conclusion for including the income. At that stage, the law only expects him to record a prima facie or tentative belief that income chargeable to tax had escaped assessment. There must be materials before him justifying the belief and the belief must have a rational nexus or live link to the material. The sufficiency of the material or evidence before the Assessing Officer on the basis of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in A/c no. 73427968 of M/s Indrus Trading Company Ltd., Jersey, Channel Island. Out of this sum USD 18247.23 retained in the account of Indrus is the commission of Shri Aditya Khanna. The assessee has failed to show the above income in its return of Income. Accordingly, I have reasons to believe that the assessee has not declared true and full particulars of his income, as discussed above which has escaped assessment. If approved, notice u/s 148 may be issued. (MAZHAR AKRAM) Asstt. Commissioner of Income Tax Central Circle-5, New Delhi." From the reasons recorded by the Assessing Officer, what is clear to us is that thay are mainly based on information received from the Enforcement Directorate and the Investigation Wing about transfer of commission monies from the company called Masefield to certain beneficiaries for services rendered in connection with two oil contracts under "Oil for Food Programme" devised by the UN. From this information, the Assessing Officer has formed the belief that the petitioner-assessee has earned income from business which was being controlled from Indian territory. He has further stated that the role of the petitioner under the oil contracts was th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicated some of his discussions with Andaleeb Sehgal. The two statements made by the petitioner before the Enforcement Directorate were before the Assessing Officer when he recorded the reasons. 9. Andaleeb Sehgal had also given a statement before the Enforcement Directorate on 28th April, 2006. This statement was also before the Assessing Officer when he recorded the reasons. In this statement, Andaleeb Sehgal had referred to the arguments which he had with the petitioner regarding Indrus not receiving any remuneration from the second oil contract. Ultimately some money appears to have been received by Indrus from Masefield as commission. Andaleeb Sehgal had asked George Curmi to transfer his share of US$ 17500 to Hamdaan India. In addition to this statement, the petitioner has also made a statement on 25th April, 2006 before the Enforcement Directorate in which he confirmed receipt of US$ 146247 by Indrus. He also stated that the money was received as 5% profit for 30 lacs barrels of oil contracted with Masefield under the "Oil for Food Programme". The petitioner clarified in the statement that he did not do any business with Indrus outside the "Oil for Food Programme". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue particulars along with the return of income. These are not available for our perusal. However, the petitioner had admittedly included only the interest income and property income in the return. The commission income of US$ 18247.23 was not disclosed in the return, nor is there any evidence to show that any particulars relating to the commission income were submitted along with return of income. 12. The learned counsel for the petitioner would, however, argue that since the petitioner is a non-resident, he is not bound to disclose the commission income earned by him outside India, in respect of services rendered outside India and for which the payment was also made outside India into the account of Indrus in Channel Island. This argument, however, overlooks the fact that the stand of the revenue is that the business of procuring oil contracts under the "Oil for Food Programme" and payment of commission for services rendered by the petitioner were all controlled from India and, therefore, the petitioner is answerable to the income on the basis of Section 9(1)(i) as income accruing or arising, whether directly or indirectly, through or from any business connection in India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rima facie belief about escapement of income. The question whether the petitioner had a business connection in India on the lines indicated in the judgment cited above is a matter for further investigation and examination in the light of the entire evidence and this can take place only in the course of the reassessment proceedings. We are not concerned with that stage now. At the stage when the Assessing Officer issues notice to reopen the assessment, only a tentative or prima facie belief regarding business connection was required to be reached. The question before us is whether it can be said that there was material before him enabling him to reach such a prima facie or tentative belief. The answer in our opinion is in the affirmative. Neither Andaleeb Sehgal nor the petitioners were directors of Indrus. But they have some connection with Indrus and this much is clear from the fact that there is evidence/ material clearly indicating that the commission payable to the petitioner was received and credited in the bank account of Indrus in Channel Island. It is not a matter of dispute that the amount of commission payable to the petitioner was part of the amount of US$ 146247 which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner or nicer questions, which may be both of facts and law, as to whether the activities stated to have been controlled from India by an incorporated company such as Indrus, can be attributed to the petitioner on the ground that the commission monies due to him were to be paid out of the monies credited to the bank account of Indrus outside India and whether on account of these circumstances the petitioner can be said to have a business connection in India, are questions which are not required to be examined at this stage. They will have to be necessarily examined only during the reassessment proceedings, when the merits will be gone into. 15. On 27th March, 2012, we had directed the respondent to file an affidavit as to the documents/papers which were available before him and which were considered by him before recording the reasons to reopen the assessment. In compliance with our directions, the respondent has filed the affidavit in which he has affirmed that he had initiated proceedings for reassessment on the basis of precise information received from the Enforcement Directorate vide its letter dated 19th December, 2007 received by him on 20th December, 2007 and that in the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
