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DIRECTOR OF INCOME TAX -I Versus ERICSSON AB

2015 (5) TMI 829 - DELHI HIGH COURT

Reopening of assessment - CIT (Appeals) did not offer any opportunity to the assessee to make submissions with respect to the materials obtained from the survey and unilaterally rendered findings - Held that:- Having primarily recorded that the CIT (Appeals)’s order was bad for the reason that he did not follow the procedure prescribed by the law to the condition that reasonable opportunity is to be afforded to the assessee, the ITAT ought not to have followed in the same manner, in appreciating .....

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question as to what was the material collected during the survey and what are the inferences drawn and whether the question of PE or any other issue would arise, is something this Court ought not to surmise. Thus remit the matter to the CIT (Appeals) who shall give reasonable opportunity to the assessee, in the light of the materials collected during the survey conducted on 22.11.2007 for the assessment years in question i.e. 1999-2000 to 2004-05 - Decided in favour of assesse by way of remand. .....

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fter referred to as the ITAT ) dated 20.07.2012 in several appeals preferred by the assessee for Assessment Years (AYs) 1999-2000 to 2004-05. Its grievance is that the ITAT erroneously examined the merits of the contentions and drew inferences in the assessee s favour which were entirely unwarranted. 2. This Court does not propose to discuss the facts in detail in view of the final order made. The assessee (Swedish company) is a subsidiary of LME. It entered into a contract with Indian telecom s .....

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er ultimately culminated in a reported decision of this Court in Director of Income Tax v. Ericsson (2012) 343 ITR 470 (Del). 3. For the succeeding years, 1999-2000 to 2004-05, assessments were pending. Apparently for some years, re-assessment notices had been issued and matters proceeded. In these circumstances, a survey was conducted on 22.11.2007 in the premises of Ericsson India Limited (EIL), a subsidiary of LME. For the concerned year, the assessment was completed on 31.12.2007. For some y .....

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see appealed to the ITAT for all these assessment years. In its common order - impugned order for these proceedings, the ITAT held that:- The First Appellate Authority came to a conclusion that new facts/evidences were gathered during the survey U/S 133A and were also collected from Cellular operators u/s 133(6) of the Act much after the Order of the Special Bench of the Tribunal in assessee's own case for the A.Y. 1997-98. The Ld. CIT(A), without confronting the assessee or the Assessing Of .....

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ague conclusions are drawn. The documents were not put to the assessee, nor explanations were called for from the assessee. The views of the assessee and the Assessing Officer on these new evidences are I necessary to form an opinion or draw conclusions on these documents. Surmises and conjectures are drawn. The nature of evidence found, the nexus the particular document/evidence has with the impugned Assessment Years, the inference that the CIT(A) seeks to draw from these documents and the repl .....

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ount while recording adverse findings and concluded that there was no distinction between the facts which were considered by this Court in its decision in Ericsson (supra) and the facts for the subsequent assessment years. 5. Learned counsel for the Revenue contends that given the findings of the ITAT that the CIT (Appeals) did not offer any opportunity to the assessee to make submissions with respect to the materials obtained from the survey and unilaterally rendered findings, the ITAT itself o .....

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the submissions of the Revenue and contended that the impugned order should not be disturbed. He argued that the findings with respect to the title of the goods passing in the high seas and, therefore, being outside the jurisdiction of India cannot be faulted with. He also submitted that the question in this appeal was taken into account in the previous ruling of this Court for AY 1997-98. 7. This Court has considered the submissions of the parties. Para 3.2 and 3.3 of the order of CIT (Appeals .....

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