TMI Blog2019 (8) TMI 1067X X X X Extracts X X X X X X X X Extracts X X X X ..... ch, 2017, issued by the Respondent, Assistant Commissioner of Income Tax, Circle26 (1), New Delhi (hereafter, the Assessing Officer) (AO) seeking to reopen the assessment of the Petitioner for Assessment Year (AY) 2010-2011 under Section 147 of the Income Tax Act, 1961 (the Act). 2. The background facts as stated in the petition are that the erstwhile Sterlite Industries (India) Ltd., which stands amalgamated with Sesa Sterlite Ltd., and now known as Vedanta Ltd., was incorporated in 1975. During the relevant AY, the Petitioner was engaged in the business of manufacturing of copper and other non-ferrous metals, phosphoric acids, sulphuric acid etc, in the AY 2010-2011. The return of income was filed on 8th October, 2010 and was, thereafter, revised on 31st March, 2012. The Petitioner was required to file its audited accounts, tax audit report and Form 3CEB, containing details of the international transactions entered into between the Petitioner and its affiliates. These were duly filed with its return. 3. According to the Petitioner, in the audited accounts filed before the AO, it made disclosures in respect of consultancy and management fees paid to Vedanta Resou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said High Court stayed the recovery of the demand, subject to payment of 15% of the total tax demand, by an order dated 20th June, 2014. The said petition is stated to be pending. 9. By way of the notice dated 14th March, 2017, the Deputy Commissioner of Income Tax (International Taxation) (Madurai) [ DCIT (IT)] initiated proceedings against the Petitioner under Section 201(1)/(1A) of the Act for AYs 2010-2011 and 2011-2012. These proceedings culminated in two separate orders dated 31st March, 2017, holding the Petitioner to be an Assessee in default for failure to withhold tax under Section 195 of the Act in respect of the management and consultancy services received by the Petitioner. 10. The Petitioner challenged the said orders of the DCIT (IT), Madurai, in the Madurai bench of the Madras High Court by Writ Petition (MD) Nos. 8269-70/2017. By orders dated 27th April, 2017 and 16th June, 2017, the Madurai Bench of the Madras High Court stayed the recovery of the demand. The said writ petitions are stated to be pending. 11. On the same date that the DCIT (IT) issued the above orders i.e. 31st March, 2017, the impugned notice was issued to the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s: 40(a)(i) of the I. T. Act, 1961, and which is to be added to the total income of the assessee and brought to tax. In view of the above facts, it is abundantly clear that there is failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessments for the AY 20110-11. Therefore, I have reason to believe that income chargeable to tax amounting to ₹ 22,91,15,590/- has escaped the assessment, within meaning of provision of section 147 of the Income Tax Act, 1961. Accordingly, assessment for A.Y. 2010-11 is proposed to be reopened by issuing notice u/s 148 of the I.T. Act, 1961. Asst. Commissioner of Income Tax Circle-1(1), Panaji 14. The Petitioner by letter dated 4th December, 2017, raised objections to the reopening of the assessment. These objections were rejected by the Respondent by an order dated NIL received by the Petitioner on 6th December, 2018. 15. Thereafter, the present Petition was filed. On 22nd December, 2017, while directing notice to be issued in the petition, this Court passed the following order: W.P. (C) No. 11541/2017 CM No. 47020/2017 Issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pening the assessment. It is further contended that the mere disclosure of the said transaction at the time of the oral assessment cannot be said to be a disclosure of the true and full facts of the case. Reliance is placed on the decisions in Commissioner of the Income Tax v. Velocient Technologies Ltd. (2015) 376 ITR 131 and New Delhi Television Ltd. Vs Deputy Commissioner of Income Tax (2017) 84 taxman.com 136 (Del). 18. Mr. Sachit Jolly, learned counsel appearing for the Petitioner refers to the above facts of the Assessee having made full disclosure of its payment of management consultancy fees to VR PLC in its audited accounts and in the audit report. He also refers to the fact that specific queries were raised by the AO during the course of the assessment proceedings under Section 143 (3) of the Act on this aspect. He submits that this was not a case of failure on the part of the Assessee to make a full and true disclosure of all the material facts. He placed reliance on the decision in Commissioner of Income Tax, Calcutta v. Burlop Dealers Limited, (1971) 79 ITR 609 (SC). 19. Ms. Vibhooti Malhotra, learned senior standing counsel for the Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for non-deduction of TDS. As explained by the Supreme Court in CIT v Burlop Dealers Ltd. (1971) 79 ITR 609 , once the Assessee has placed all the material facts necessary for the assessment before the AO, he is under no obligation to instruct the AO about what the AO should do on the basis of such facts. The Supreme Court in that case observed as under: We are of the view that under Section 34(1) if the Assessee has disclosed primary facts relevant to the assessment, he is under no obligation to instruct the Income-tax Officer about the interference which the Income-tax Officer may raise from those facts. The terms of the Explanation to Section 34(1) also do not impose a more onerous obligation. Mere production of the books of account or other evidence from which material facts could with due diligence have been discovered does not necessarily amount to disclosure within the meaning of Section 34(1), but where on the evidence and the materials produced the Income-tax Officer could have reached conclusion other than the one which he has reached, a proceeding under Section 34(1)(a) will not lie merely on the ground that the Income-tax Officer has raised an inference wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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