TMI Blog2014 (10) TMI 547X X X X Extracts X X X X X X X X Extracts X X X X ..... s 148 of the Act is based on re-appreciation of the same material on record – revenue has not specifically indicated as to which material facts were not disclosed by the assessee in the course of the assessment proceedings under the Act – thus, the notice dated 28.03.2013 issued by the revenue u/s 148 of the Act is liable to be quashed – Decided in favour of assessee. - W. P. (C) 747/2014 - - - Dated:- 17-10-2014 - Badar Durrez Ahmed And Siddharth Mridul,JJ. For the Petitioner : Mr Piyush Kaushik, Advocate For the Respondents : Mr Sanjeev Sabharwal, Advocate JUDGMENT Siddharth Mridul, J. 1. By way of this writ petition a writ of certiorari has been sought for quashing the notice dated 28.03.2013 issued by the respondent (Deputy Commissioner of Income Tax) under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the said Act ). 2. The facts of the present writ petition are enunciated as below:- 3. On 29.11.2006 the petitioner/assessee filed its return of income for the assessment year 2006-2007. The aforesaid return of income of the petitioner was selected for scrutiny assessment vide issue of notice under Section 143(2) of the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hinery etc. 7. With respect to the query No.12 of the assessing officer, the petitioner/assessee furnished details of loans and advances including the advance of ₹ 5,20,57,726/- to the group companies. In reply to the assessing officer s query as to why interest is not charged on the loans and advances, it was explained that the loans and advances are given for business purposes. 8. It was submitted to the assessing officer that the loans and advances are given by the assessee-company from the available interest free funds placed at the disposal of the assessee in the form of share capital, reserves and surplus and sales proceeds, which exceed the amount of loans and advances given. 9. Thereafter on 05.08.2008 another questionnaire was issued by the assessing officer. The reply to the aforesaid questionnaire was submitted by the petitioner/assessee on 12.08.2008, mentioning the commercial advantage arising out of business transactions with group companies. 10. On 29.08.2008, scrutiny assessment order under section 143(3) of the said Act was issued by the respondent (Deputy Commissioner of Income Tax) determining the total income at ₹ 1,06,25,560/-. 11. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts necessary for his assessment, for that assessment year. 16. The point urged by the learned counsel appearing on behalf of the petitioner was that in a case where the proviso to section 147 of the said Act was applicable, it must be clearly indicated that the understatement of income was on account of the failure on the part of the assessee to fully and truly disclose all material facts necessary for the assessment. The purported reasons behind the issuance of the notice under section 148 of the said Act are reproduced below:- .The assessment of M/s Global Signal Cables (India) Pvt. Ltd for the assessment year 2006-07 was completed after scrutiny in September 2008 determining an income of ₹ 1,06,25,5578/-. It is gathered that the assessee debited ₹ 81,30,819/- to profit and loss account on account of interest and financial charges. In the auditor s report it was stated that interest free loan upto the tune of ₹ 5,20,57,726/- had been given to other companies. Therefore, proportionate amount of expense on account of interest and financial charge should have been disallowed by the assessing officer. The mistake resulted in underassessment of income of &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand Singhania [2004] 269 ITR 192 that, in the absence of an allegation in the reasons recorded that the escapement of income had occurred by reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, any action taken by the Assessing Officer under section 147 beyond the four year period would be wholly without jurisdiction. Reiterating our view-point, we hold that the notice dated March 29, 2004, under section 148 based on the recorded reasons as supplied to the petitioner as well as the consequent order dated March 2, 2005, are without jurisdiction as no action under section 147 could be taken beyond the four year period in the circumstances narrated above. (underlining added) 19. The same principle is reiterated in Rural Electrification Corporation Ltd. vs. Commissioner of Income Tax: [2013] 355 ITR 356. Also in Microsoft Corporation (I) Pvt Ltd vs. Deputy Commissioner of Income Tax Anr: [WP(C) 284/2013 decided on 23.05.2013] a Division Bench of this Court had observed as under:- From the above, it is evident that merely having a reason to believe that income had escaped assessment is not sufficient for re ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
