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2015 (11) TMI 1138 - DELHI HIGH COURT

2015 (11) TMI 1138 - DELHI HIGH COURT - TMI - Reopening of assessment - Held that:- No whisper of the petitioner having failed to disclose fully and truly all the material facts necessary for its assessment. It is therefore clear that the necessary ingredients for invoking the provisions of Section 147 beyond the period of four years are missing. As such, the initiation of the reassessment proceedings pertaining to the assessment year 2005-06 is without the authority of law.

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ubstance in reopening of assessment - Decided in favour of assessee. - W.P.(C) 2062/2014 & CM No.4320/2014 (stay) - Dated:- 19-11-2015 - MR BADAR DURREZ AHMED AND MR SANJEEV SACHDEVA, JJ For the Petitioners : Mr M.S. Syali, Sr Advocate with Mr Mayank Nagi and Ms Husnal Syali, Advocates. For the Respondents : Mr Kamal Sawhney, Mr Raghvendra Singh and Mr Shikhar Garg, Advocates. JUDGMENT BADAR DURREZ AHMED, J 1. This writ petition is directed against the notice dated 28.03.2012 issued under Sectio .....

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s for initiating the reassessment proceedings which were supplied to the petitioner on 16.01.2014 are as under:- INCOME TAX DEPARTMENT 1. Name & Address of the Assessee : Discovery Asia Inc. One Discovery Place Silver Spring, Maryland 20910-3354 USA 2. Permanent Account No. : AABCD4333P 3. Status : Foreign Company 4. Residential Status : Non-resident 5. Assessment year : 2005-06 6. Date of order : 26.03.2012 Reasons for issue of notice u/s 148 of the Income Tax Act, 1961 :- Return declaring .....

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y the assessee were taxed as royalty income. 2. Article 12(6) of the DTAA between India and US provides that the provisions of Article 12(1) and 12(2) shall not apply if the royalties or fees for technical services arise through a permanent establishment (PE) and are attributable to such PE and in such a case, the provisions of Article 7 shall apply. Further, as per the provisions of section 115A(b) of the Act, where the total income of a non-resident or a foreign company includes any income by .....

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o 44C, in the case of an assessee being a foreign company, no deduction in respect of any expenditure or allowance shall be allowed under any of the said sections in computing the income by way of royalty received from government or an Indian concern in pursuance of an agreement made by a foreign company after 31.03.1976 but before 01.04.2003. 3. Perusal of the assessment record reveals that in the assessee's case, the royalty income amount to ₹ 336,754,388/- was taxed @ 15% under the .....

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The petitioner preferred objections on 04.02.2014 which were rejected by the Assessing Officer by virtue of the impugned order dated 10.02.2014. One of the points urged by Mr Syali, appearing on behalf of the petitioner, was that the reasons do not mention anything about failure on the part of the assessee to fully and truly disclose all the material facts necessary for the assessment. He submitted that this is a pre-condition prescribed in the first proviso to Section 147 of the Act before the .....

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