TMI Blog2012 (12) TMI 874X X X X Extracts X X X X X X X X Extracts X X X X ..... ereof clearly indicates that it has been issued merely on the basis of change of opinion and would amount to a review of the Assessment Order dated 11/12/2003. The reasons for reopening is not on the basis of any tangible material but merely on verification of the material and primary facts already on record that the AO has duly considered while passing the order dated 11/12/2003 for AY 2007-08. Also that is in the order dated 15/10/2012 rejecting the objections filed by the petitioner with regard to reassessment proceedings for assessment year 2007-08 a completely new ground has been added to reopen assessment is the lack of co-relation between the payment received by the petitioner and the TDS Certificate issued by the persons making payment to it during the assessment year 2007-08. This according to order dated 15/10/2012 resulted in under assessment of income to the extent of ₹ 21.61 lacs. The aforesaid issue was not one of the grounds specified in the reasons communicated to the petitioner on 23/7/2012 for the purpose of reopening the assessment for assessment year 2007-08. Our Court in the matter of Hindustan Lever Ltd. v. R.B. Wadkar, Assistant Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 40(a)(ia) of the Act while computing its profits. c) In response to the above query, the petitioner submitted complete details of radiography and labour charges paid by it indicating the name and address of the recipients. The petitioner inter alia pointed out that the job of testing carried out by it, is mainly supervised by BARC, as it involves use of radio active material. The petitioner also pointed out that the persons engaged by them for radiography are generally skilled personnel while those for labour charges were generally unskilled personnel. However, according to the petitioner no deduction of tax at source is required to be made as the payment made to them were in fact in the nature of wages and salaries. Therefore, the provisions of tax deduction at source under Section 194C of the Act would not apply and consequently no occasion to invoke Section 40(a)(ia) of the Act can arise. The Assessing officer after considering the petitioner's response in the assessment order did not accept the same and held that the tax deduction at source was required to be done by the petitioner in respect of radiography and labour charges paid under Section 194C of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4/10/2012 the petitioner objected to the reopening of the assessment under Section 147 and 148 of the Act for the assessment year 2007-08. The petitioner pointed out that there is no warrant to reassess the petitioner for the assessment year 2007-08, particularly because the entire payment made by them as labour charges and radiography charges were scrutinized and considered by the Assessing Officer at the time of regular assessment. Besides the petitioner pointed out that the labour charges were paid for performing labour jobs like ducting, laying of pipes and other related labour jobs. Therefore, the same cannot be classified as professional job work. g) On 15/10/2012 the Assessing Officer rejected the petitioner's objection dated 23/8/2012 and 4/10/2012 to reopen the assessment for assessment year 2007-08 under Section 147 and 148 of the Act. The Assessing officer disposes of the objections of the petitioner to the proposed reopening of assessment for assessment year 2007-08 as under: In this case this is to inform you that your objections in respect of ongoing assessment proceedings have been carefully considered by the undersigned. The following facts lead to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is in accordance with the provisions of law. Hence, your objection to the present proceedings u/s.147 and that in respect of issue of notice u/s. 148 are without any basis and accordingly the same is rejected. Accordingly, your objection stands disposed off. You are requested to file requisite details as per questionnaire dated 23/7/2012. h) The respondent has filed an affidavit in reply dated 20/11/2012 in support of the impugned notice. In its reply the respondent have annexed a communication dated 14/3/2012 addressed by the Assessing officer to the Joint Commissioner of Income Tax seeking his approval to reassess the petitioner for the assessment year 2007-08. In that communication the Assessing officer has referred to the objection raised by the internal auditor of the department to assessment order allowing the expenses on account of radiography and labour charges holding them to be contract payments for the deduction of source. 4) Ms. Aasifa Khan, Counsel appearing for the petitioner in support of the petition submits as under: a) Even where the impugned notice dated 28/3/2012 under Section 148 of the Act has been issued within a period of four years from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ography charges without having disclosed the fact that such payment have been made to skilled persons. Therefore, professional payments; c) The payment made to skilled personnel are in the nature of technical fees liable to tax deduction at source under Section 194J of the Act and not 194C of the Act as done in the assessment order dated 11/12/2009. Consequently, any fees paid for technical services in excess of Rs.20,000/- has to bear tax deduction at source. Therefore, the Assessing Officer has reason to believe that income has escaped assessment for assessment year 2007-08; and d) No prejudice would be caused to the petitioner if it subjects itself to reassessment proceedings. This is because all the pleas of the petitioner with regard to the inapplicability of Section 194C of the Act would be examined during the reassessment proceeding. In view of the above, Mr. Pinto submits that the petition be dismissed. 6) We have considered the submissions. We find that Notice dated 20/3/2012 under Section 148 of the Act has been issued within a period of four years from the end of the relevant assessment year i.e. 2007-08. In such circumstances, the proviso to Section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had disclosed all facts with regard to deduction being claimed on account of labour charges and radiography charges. In fact, the assessment order dated 11/12/2009 records the fact that a notice was issued to the petitioner to explain why expenses on account of labour and radiography charges should not be disallowed under Section 40(a)(ia) of the Act. The petitioner explained its view point and the Assessing officer on consideration of those facts in his order of assessment dated 11/12/2009 concluded that these payments on account of radiography charges and labour charges are tax deductible at source in terms of Section 194C of the Act. Further, the obligation on the part of the assessee is only to make a full disclosure of primary facts and the inferences to be drawn there from and the application of law thereon is the job of the Assessing officer. The petitioner has disclosed all primary facts and on consideration of those facts as reflected in the assessment order dated 11/12/2003 the amount of income has been computed after holding that TDS has to be deducted under Section 194C of the Act. 8) Therefore, the impugned notice and the reasons in support thereof clearly indicates ..... X X X X Extracts X X X X X X X X Extracts X X X X
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