9911796707
TMI Blog2013 (5) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies Act. For the assessment year 2007-2008, petitioner filed its return of income on 29.10.2007 declaring total income of Rs. 36,27,970/-. In such return, the petitioner had claimed labour expenditure of Rs. 9.48 crores (rounded off). As per the petitioner, on the balance labour payment of Rs. 3.05 crores (rounded off), provision of TDS was not applicable and, therefore, no tax was deducted at source. 3. Assessing Officer framed scrutiny assessment under Section 143(2) of the Act. He discarded petitioner's contention that TDS was not applicable for the remaining labour charges. He made ad-hoc disallowance of Rs. 25,60,000/- at 8% of the total payments in his order of assessment dated 30.12.2009. 4. Petitioner challenged the said disa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on the part of the assessee to disclose fully and truly all material relevant for the assessment, the income of the assessee has escaped assessment within the meaning of section 147 of the I.T. Act, for the A.Y. 2007-08." 6. Petitioner thereupon raised objections under communication dated 21.05.2012 to the notice of reopening. Such objections were, however, rejected by the respondent by an order dated 26.12.2012. Hence, the petition. 7. From the record and from the submissions of the counsel for the parties we notice that the only ground indicated in the reasons recorded by the Assessing Officer is that on the labour payment charges of Rs. 3.05 crores, though required, TDS was not deducted. Therefore, under Section 40(a)(ia) of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been considered but is not found to be fully accpetable. The assessee has incurred expenditure of Rs. 3,05,68,302/- in respect of labour payments on which the TDS has not been deducted. The assessee has only submitted the self made vouchers in support of its claim. As the assessee has not filed any other evidence regarding the labour payment but looking at nature of business of the assessee company a lump sum addition of Rs. 25,60,000/- @ 8% of the toatl labour payment is made to the assessee company. (Total disallowance of Rs. 25,60,000/-)" 10. From the above, it can be seen that the Assessing Officer was acutely conscious about the petitioner not having deducted tax on labour payment charges of Rs. 3.05 crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to be base ..... X X X X Extracts X X X X X X X X Extracts X X X X
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