TMI Blog2018 (3) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... had sufficient and reasonable reasons to initiate such proceedings, as certain payments were made to the Associate Enterprises (A.Es.) of the parent Company of U.S.A. without making suitable Tax Deduction at Source (TDS) rendering such expenses as non-admissible in the hands of the assessee. The said reasons cannot be said to be irrelevant or non-germane for the formation o f a reasonable belief about escapement of income as required under Section 147/148 of the Act or initiation of such proceedings for bringing to the tax the income which has escaped assessment. Therefore, this Court cannot pre-judge as to how the objections of the assessee in this regard will be met by the Respondent-Assessing Authority. Since, admittedly, the proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sibility of the AEs. In respect of onsite portion, the AEs are remunerated accordingly. 1.5 ML has made payments to its foreign Associated Enterprises ( AEs) for on-site services which are in the nature of software development services and for marketing of its products services in overseas countries. On winning a contract for a project ML subcontracts a certain part of the project to its AEs and in turn the AEs are paid for the services rendered to the Assessee company. The AEs also render marketing services in overseas countries and due to marketing efforts of the AEs, if a contract is won by ML, a certain percentage of contract value is paid as selling commission to the AEs for the services rendered. It was noticed that the paymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings, which are still pending before the Respondent Assessing Authority and no final/reassessment order has yet been passed for the Assessment Year 2008 2009 are as follows:- (i) That the approval obtained by the Respondent-Assistant Commissioner from his higher Authority, i.e. Additional Commissioner of Income Tax, vide Annexure-E dated 13.3.2015 was even prior to the recording of the aforesaid reasons itself for re-opening the assessment on 16.3.2015 and therefore, there is a violation of Section 151(2) of the Act, which provides that in a case other than a case falling under Section 151(1) of the Act, no notice under Section 148 of the Act shall be issued by the Authority, who are below the rank of a Joint Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned counsel for the petitioner- assessee, this Court is satisfied that it is premature for this Court to interfere at this stage in the present reassessment proceedings. Firstly, not only the proceedings have been initiated way-back in the year 2015 and the proceedings are still pending before the said Assessing Authority, who is yet to decide all these objections raised by the assessee by an appropriate order, but also because the nature of objections raised before this Court do not render the proceedings as patently without jurisdiction. The question of approval by higher authority is an administrative job. Even if there is difference of dates in such approval, vide Annexure-E dated 13.3.2015 on the reasons recorded by the Assessing Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not want to go to the root of the matter to render such proceedings as being without jurisdiction. The question whether U.S.A. Company has a Permanent Establishment in India or not is certainly a mixed question of fact and law and that depends upon several facts to be established by the assessee upon being questioned by the Respondent Assessing Authority. The process of adjudication of these facts is still underway to be established before the Respondent Assessing Authority. Therefore, this Court cannot render any findings in this regard. 8. It is always safer and better to leave the determination of such questions of facts at the hands of the Authorities created under the Act upto the Appellate Forums, i.e. Income Tax Appellate Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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