TMI Blog2018 (2) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessing Officer failed to raise a particular question to that effect. The earlier claim of deduction was examined and processed after calling for detailed explanation from the petitioner, and the same was accepted after forming an opinion on the activities carried out by the Company. There was no failure on the part of the petitioner as to full and true disclosure. The aforesaid analysis unveils that the reopening the petitioner's case for reassessment under section 147 of the Act is based on change of opinion and hence, the same is not justifiable as per the settled position of law. - Decided in favour of assessee. - Special Civil Application No. 16338 of 2017 - - - Dated:- 29-1-2018 - Ms. HARSHA DEVANI AND MR. A.S. SUPEHIA, JJ. For The Petitioner : Mr Tushar Hemani, Advocate With Ms Vaibhavi K Parikh, AdvocatE For The Respondent : Mr Bhatt, Sr. Advocate With Mrs Mauna M Bhatt, Advocate ORAL JUDGMENT ( PER : HONOURABLE MR.JUSTICE A.S. SUPEHIA) (1) By way of the present petition under Article 226 of the Constitution of India, the petitioner seeks to challenge the impugned notice dated 31.03.2017 issued under section 148 of the Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferred such technology to its clients instead of receiving professional charges. It is mentioned that since the clients of the petitioner are deducting tax at source on the payments made to it, therefore, the amount received by the petitioner is professional income and the same is not eligible for claiming deduction under section 80-IB(8A), hence, income to the extent of ₹ 30,54,48,559/- has escaped assessment for the year under consideration. (5) The petitioner vide letter dated 20.04.2017 raised objections against reopening the case of the petitioner. It was categorically pointed out in such objections that (i) reopening is beyond a period of four years from the end of the relevant assessment year and there is no failure on the part of the petitioner as to full and true disclosure; (ii) reopening is based on change of opinion; (iii) even on merits, the petitioner is eligible for deduction under section 80-IB(8A) of the Act; and (iv) reopening is based on audit objection. Thus, it was submitted that reopening is not justified and accordingly, the reopening proceedings may be dropped. However, the respondent vide order dated 24.08.2017 disposed of the objections ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee must be approved by the Prescribed authority i.e. The Secretary, Department of Scientific and Industrial Research, Ministry of Science and Industrial Research, Ministry of Science and Technology, Government of India . He has submitted that the petitioner is duly granted approval from such prescribed authority vide Letter dated 22.10.2003, hence the Assessing Officer cannot form his opinion on the activities of the petitioner for the purpose of deduction under section 80-IB(8A) of the Act. (8) The aforesaid submissions are resisted by learned Senior Advocate Mr. M.R. Bhatt for the Revenue. He has submitted that the petitioner is not eligible for deduction under section 80-IB(8A) of the Act as subsequently it was noticed that the petitioner was providing professional services to the clients for scientific and industrial research and development since the clients of the petitioner are also deducting TDS on the payment made to it as professional charges. He has asserted that the petitioner is not carrying its activities in scientific and industrial research and development, which is the principal requirement for claiming deduction. Mr.Bhatt has further submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is prepared by experts based on regulatory requirements, characteristics of drug and statistical sampling techniques. Clinic phase comprise of giving agreed doze of the drug at the stipulated timing and drawing blood samples at intervals stipulated by the protocol. This phase is supervised by specialized doctors. Analytical phase comprises of testing of blood samples by highly sensitive equipments to measure the presence of drug in the blood at different time intervals. Based on the clinical and sample analysis data, a report is prepared and is the basis of regulatory approval for marketing / manufacturing of drugs by the sponsoring pharmaceutical companies. We quote our fees based on the study design, length of study, nature of services offered and number of volunteers on whom the drug is to be tested. We raise invoices based on milestones of activities completed. (12) After examining all the details, the Assessing Officer, by the assessment order dated 24.04.2014 consciously chose to make disallowance of ₹ 9,82,226/- under section 80-IB(8A) of the Act holding that the income to the extent of ₹ 9,82,226/- was not earned from the elig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner to furnish details of transactions with various companies, such as M/s Cadila Healthcare Ltd., Lupin Ltd. Etc. These are the companies with whom the petitioner had entered into detailed agreements for carrying out scientific research. In paragraph 4 of such notice, he called upon the petitioner to furnish note on claim of deduction under Section 80IB(8A) of the Act to produce necessary evidence in support of such claim. He also directed the petitioner to furnish note on how all the conditions laid down under Rule 18DA were fulfilled. (13) The earlier claim of deduction was examined and processed after calling for detailed explanation from the petitioner, and the same was accepted after forming an opinion on the activities carried out by the Company. There was no failure on the part of the petitioner as to full and true disclosure. The aforesaid analysis unveils that the reopening the petitioner's case for reassessment under section 147 of the Act is based on change of opinion and hence, the same is not justifiable as per the settled position of law. (14) Since we are inclined to set aside the impugned notice on the issue of change of opinion, we need not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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