9911796707
TMI Blog2019 (2) TMI 1078X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned notice, which can be seen, was done beyond a period of four years from the end of relevant Assessment Year. In order to do so, the Assessing Officer had recorded the following reasons: Reasons for reopening of the Assessment in the case of M/s. HSBC Software Development (Indai) Pvt. Ltd.: During the period relevant to A.Y. 2011-12, the assessee company was engaged in the business of Software Development as required for Banking Operation of the HSBC Group. The assessee company also undertook value added Information Technological services, acted as an in-house software development centre and developed solutions and software implementation services for group companies of HSBC spread across the globe. Return of income for A.Y. 2011-12 was filed electronically by the assessee company on 25/11/2011 declaring total income of Rs. 31,99,35,403/. Order u/s. 143(3) of the Act was passed on 30/03/2015 determining total income at Rs. 146,32,01,943/. In the scrutiny assessment, additions of Rs. 113,15,18,134/and Rs. 1,20,60,460/were made to the returned income by making disallowance u/s. 10B(7) r.w.s. 80IA and u/s. 14A r.w. Rule 8D respectively. 2. On examination of the case re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled for A.Y. 2011-12 and regular assessment u/s. 143(3) of the Act was made on 30/03/2015. Since, four years from the end of the relevant year has expired in this case, the requirements to initiate proceedings u/s. 147 of the Act are reason to believe that income for the year under consideration has escaped assessment because of failure on the part of the assessee company to disclose fully and truly all material facts necessary for the assessment for the assessment year under consideration. It is pertinent to mention here that reasons to believe that income has escaped assessment for the year under consideration have been recorded above at paragraph 3. I have carefully considered the assessment records containing the submissions made by the assessee company in response to various notices issued during the assessment proceedings and have noted that the assessee company has not fully and truly disclosed the material facts necessary for the assessment for the year under consideration. Thus, it is evident from the above facts that the assessee company had not truly and fully disclosed all material facts necessary for the assessment for the year under consideration thereby necessitatin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer and other documents on record, Counsel for the Petitioner raised following contentions: (i) that the impugned notice was issued beyond a period of four years from the end of the relevant Assessment Year. There was no failure on the part of the assessee to disclose truly and fully all material facts. The notice of reopening of assessment was, therefore, invalid; (ii) In the present case, there was no income chargeable to tax which had escaped assessment. Counsel pointed out that, the Assessing Officer had computed the assessee's tax liability as per the normal provisions but by virtue of the reliefs granted by the Commissioner (Appeals), such computation was made under Section 115JB of the Act. Even if, the proposed additions as per reasons recorded, were to be made, the Company would still continue to be governed by the MAT provisions; (iii) Counsel submitted that the expenditure in question, referred to in the reasons recorded, was subjected to transfer pricing scrutiny. Thus, the reopening of assessment was, based on change of opinion; and (iv) Counsel lastly contended that sanction was granted by the Principal Commissioner on 9th March, 2018 whereas the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cts necessary for assessment. 7. We fail to see how the Assessing Officer can sustain his contention of lack of true and full disclosure by assessee. Plain facts of the case are that, the assessee had, even as admitted by the Assessing Officer, filed full details, particulars, and audited accounts along with the return, in which, the payments in question, were duly reflected. The onus of the assessee to make disclosure would end upon such disclosure of primary facts. It is well settled, through series of judgments, starting from the Apex Court decision in Calcutta Discount v/s. ITO 41 ITR 191, the responsibility of the assessee is to disclose primary facts. What further enquiring, inference and in law is to be drawn from said facts, is fully within the realm of the Assessing Officer's jurisdiction. 8. In paragraph 3 of the reasons, in order to support lack of true and full disclosure, the Assessing Officer referred to the fact that, the assessee had not on its own disallowed expenditure in terms of Section 40(a)(i) of the Act. Thus, Assessing Officer expects the assessee to make the disallowance involuntarily to be able to claim full and true disclosure. 9. To reiterate the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
