TMI Blog2021 (3) TMI 193X X X X Extracts X X X X X X X X Extracts X X X X ..... the machinery prescribed under the Act for reopening the assessment beyond the normal period of limitation was not available to the respondent. Though, the petitioner has an alternate remedy before the Commissioner of Income Tax (Appeals), this court is inclined to interfere by quashing the impugned order dated 28.12.2011 for the Assessment Year 2004-05, as there was no failure on the part of the petitioner to truly and fully disclose all materials that are required for assessment by the assessment officer. Coming to the Assessment Year 2005-06 only reason given for re-opening of the assessment is on account of the failure on the part of the petitioner to pay tax on the freight under voyage charter. In the notice issued under section 143 (2) of the Income Tax Act, 1961 and the consequent communication dated 15.11.2007 of the Assistant Commissioner of Income Tax the petitioner was called upon to furnish the details in writing to the questionnaire attached to the said notice. The questionnaire specifically called upon the petitioner only to furnish details of BBCD hire charges paid to M/s.Dolphin Maritime Inc.Cyprus, with the details of tax deducted at source. The petitioner no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Ltd., Cyprus was concerned. 6. The petitioner replied to the same which eventually culminated in an order dated 27.04.2005 of the Income Tax Officer (International Taxation) for the assessment year 2003-04 2004-05. Information was called for payment made up to the date of notice dated 31.8.2004. The petitioner had paid a sum of ₹ 1,46,51,000/- and was held liable to pay tax under section 201 (1) of the Income Tax Act, 1961. 7. The petitioner preferred an appeal against the said order before the Commissioner of Income Tax (Appeals) for the Assessment Years 2003-04 and 2004-05 alone. The Commissioner of Income Tax (Appeals) upheld the order dated 27.4.2005 of the Income Tax Officer (International Taxation). Aggrieved by the same, the petitioner preferred the appeals before the Income Tax Appellate Tribunal, Chennai. 8. The Income Tax Appellate Tribunal by its order dated 19.5.2006, upheld the order passed by the Commissioner of Income Tax (Appeals) in its order reported in West Asia Maritime Ltd. vs The Income-Tax Officer, (2008) 297 ITR 202. 9. It is during the pendency of these proceedings, the original assessment for the assessment year 2004-05 and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as well. 15. It is further submitted that the Income Tax Officer (International Taxation) had also issued a notice dated 31.8.2004 which culminated in an order dated 27.4.2005 as mentioned above. It is therefore submitted that three different officers had applied their mind and scrutinised the payments made to non-residents and therefore there was no case made out for issuing notice under Section 148 of the Income Tax Act, 1961 for the purpose of invoking proviso to Section 147 of the Income Tax Act, 1961 and therefore the impugned order dated 28.12.2011 was also liable to be quashed. 16. As far as the Assessment Year 2005-06, is concerned, again all the information necessary for the assessment were furnished by the petitioner during assessment and that the notice under Section 148 of the Income Tax Act, 1961 again notice was issued after the expiry of normal period of limitation. It is submitted that the notice has been issued on account of change of opinion. It is submitted that all the details were furnished by the petitioner at the time of assessment and therefore the impugned order was liable to be quashed. It is submitted that there were no new material available for r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or of India Ltd. (2002) 256 ITR 1 (Delhi) x). Commissioner of Income Tax Vs.Kelvinator of India Ltd. (2010) 320 ITR 561 (SC) xi). E-Infochips Ltd Vs. Deputy Commissioner of Income Tax, (2017) 380 ITR 449 (Gujarat) xii) . QX KPO Services(P) Ltd. Vs Deputy Commissioner of Income Tax, (2019) 414 ITR 429 (Gujarat) xiii).Deputy Commissioner of Income Tax v. QX Kpo Services(P)Ltd, (2018) 259 Taxman 317 (SC) xiv) State Bank of India Vs. Assistant Commissioner of Income Tax, Circle-2(2)(1), Mumbai, (2019) 411 ITR 664 (Bombay) 19. That apart, the petitioner was also made to the following three decisions: i) .New Delhi Television Ltd. Vs. Deputy Commissioner of Income Tax (2020) 116 taxmann.com 151 (SC) ii). Jarun Pharmaceuticals Pvt.Ltd Vs. Income Tax Officer Special Leave Application No.19008/2018 iii). Hitech Outsourcing Services Vs. Commissioner of Income Tax (2019) 102 taxmann.com 128 (Gujarat) 20. The learned counsel for the petitioner drew my attention to the decision of the Supreme Court, in Commissiner of Income Tax Vs. Kelvinator of India Ltd. (2002) 256 ITR 1 (Delhi), it has been held as follows: 13. We are, with respect, unable to s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntemplates existence of reasons on which the belief is founded and not merely a belief in the existence of reasons inducing the belief. Such a belief may not be based merely on reasons but it must be founded on information. As was observed in Ganga Saran and Sons P. Ltd. v. ITO (1981) 130 ITR 1 (SC), the expression reason to believe is stronger than the expression is satisfied . The belief entertained by the Assessing Officer should not be irrational and arbitrary. To put it differently, it must be reasonable and must be based on reasons which are material. In S. Narayanappa v. CIT (1967) 63 ITR 219, it was noted by the apex court that the expression reason to believe in Section 147 does not mean purely a subjective satisfaction on the part of the Assessing Officer, the belief must be held in good faith; it cannot be merely a pretence. It is open to the court to examine whether the reasons for the belief have a rational nexus or a relevant bearing to the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To that limited extent, the action of the Assessing Officer in initiating proceedings under Section 147 can be challenged in a cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income Tax Act, 1961 can be said to be justified. 26. In this case, at the time of assessment, for the Assessment Year 2004-05 the details were called for from the petitioner vide notice dated 17.8.2006 issued under Section 143 (2)/142 (1) of the Income Tax Act, 1961. In its reply dated 30.8.2006, the petitioner declared that it had paid a total sum of ₹ 68,89,14,292/- as freight. During assessment, only a sum of ₹ 6,08,98,646/-from the aforesaid amount was disallowed under Section 40(a)(1) of the Income Tax Act, 1961. Thus, there is no case made out for suppression of facts or failure to truly and fully disclose information by the petitioner. 27. Therefore, invocation of the machinery prescribed under the Act for reopening the assessment beyond the normal period of limitation was not available to the respondent. Though, the petitioner has an alternate remedy before the Commissioner of Income Tax (Appeals), this court is inclined to interfere by quashing the impugned order dated 28.12.2011 for the Assessment Year 2004-05, as there was no failure on the part of the petitioner to truly and fully disclose all materials that are required for assessment by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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