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TMI Blog2022 (8) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... Narrating the facts of case the ld. Counsel for the assessee submitted that the assessee is a foreign company( tax resident of The Netherlands) engaged in the business of selling network equipment and providing maintenance services. The assessee is providing maintenance services to Indian customers through channel partners and does not have an office or any other form of presence in India. The assessee has entered into Support Services Specialized Agreement (SSSA) with its channel partners for rendering maintenance services. The assessee filed its original return of income for Assessment Year 2014-15 on 28/11/2014. Thereafter, the assessee filed a revised return of income on 30/03/2016 claiming refund of Rs.8,16,40,560/-. During the course of assessment proceedings the Assessing Officer issued notice u/s. 143(2) of the Act dated 09/09/2016. In response to the said notice assessee filed submissions on 26/10/2016( at pages 4 and 5 of the paper book). The assessee again on 16/11/2016 filed detailed submissions (at pages 6 to 11 of the paper book) explaining business of the assessee and also the mode of operations in India. Thereafter, the Assessing Officer issued notice u/s. 142(1) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Assessing Officer after examining the issue in detail has taken one of the possible views, the CIT cannot substitute his view in proceedings u/s. 263 of the Act. To support this arguments the ld. Counsel for the assessee placed reliance on the following decisions: (a) CIT vs. Max India Ltd., 166 Taxman 188 (SC) (b) CIT vs. Gabriel India Ltd., 71 Taxman 585 (Bom) (c) CIT vs. Nirav Modi, 390 ITR 292 (Bom) (ii) Merely for the reason that the Assessing Officer has not dealt with the issue in detail in the assessment order it would not make the assessment order is erroneous. In support of above arguments the ld. Counsel for the assessee relied on following decisions: (a) CIT vs. Gabriel India Ltd. (supra) (b) CIT vs. Nirav Modi (supra) (iii) The CIT ought to have conducted necessary enquiry after coming to the conclusion that the Assessing Officer has not carried out desired enquiry. In support of the above arguments the ld. Counsel for the assessee placed reliance on the following decisions: (a) PCIT vs. Delhi Airport Metro Express Pvt. Ltd., 398 ITR 8(Del) (b) Metacaps Engineering Mahindra Construction Co. vs. CIT, 86 taxmann.com 128 (Mum-Trib) (iv) The ld. Counsel fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by rival sides and have examined the orders of the Authorities Below. We have also considered various decisions on which rival sides have placed reliance in support of their respective arguments. 7. A perusal of the impugned order reveals that the CIT has exercised revisional jurisdiction u/s. 263 of the Act primarily for the reason that the Assessing Officer has not made proper enquiries and verification of the claim made in the revised return of the assessee. Hence, the order passed by the Assessing Officer is erroneous and prejudicial to the interest of Revenue. A perusal of the documents on record reveal that the Assessing Officer during the course of assessment proceedings had issued a detailed questionnaire along with notice u/s. 142(1) of the Act dated 16/11/2016. A specific query i.e. query No.21 was raised by the Assessing Officer asking for the complete details and the supporting documentary evidences in respect of the income claimed as exempt under the provisions of the Act/DTAA. The assessee furnished detailed reply to the query raised by the Assessing Officer on 23/11/2016 and thereafter, on 28/11/2016. Along with the reply, the assessee had also furnished documentary ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 (Bom.) has held that if during Assessment proceedings queries were raised and the assessee responded to the same, then even if an Assessment order does not mention the same, it does not mean that the Assessing Officer has not applied his mind to the issues. It would be well-nigh impossible for an Assessing Officer to complete all assessments assigned to him under Section 143(3) of the Act if he is required to deal with all issues which arose during the Assessment Proceedings. Thus, the Assessment Order primarily deal with only those issues in respect of which the Assessee has not been able to satisfy him and give reasons for his conclusion. This would enable the Assessee to challenge the same, if aggrieved. In fact the Gujarat High Court in CIT v. Nirma Chemical Works Ltd. [2009] 309 ITT [67/182 Taxman 183 has observed that if an assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epitome and not an assessment order. In this case, during the assessment proceedings for both the Assessment Years, the Assessing Officer issued a query memos to the assessee, calling upon him to justify the genuineness of the gifts. The R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under such circumstances will amount to arbitrary exercise of power. It is well-settled that when exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have materials on record to satisfy it in that regard. If the action of the authority is challenged before the Court, it would be open to the Courts to examine whether the relevant objective factors were available from the records called for and examined by such authority. Our aforesaid conclusion gets full support from a decision of Sabyasachi Mukharji, J. (as his Lordship then was) in Russell Properties (P.) Ltd. v. A. Chowdhury, Addl CIT [1977] 109 ITR 229 (Cal.). In our opinion, any other view in the matter will amount to giving unbridled and arbitrary power to the revising authority to initiate proceedings for revision in every case and start re-examination and fresh enquiries in matters which have already been concluded under the law. As already stated, it is a quasi-judicial power hedged in with limitation and has to be exercised subject to the same and within its scope and ambit. So far as calling for the records and examining the same is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne with Article-12 of the India-Netherlands DTAA. The Assessing Officer applied his mind on the same and formed an opinion that fee received by assessee is not taxable in India as 'Fee for Technical Services'. The Assessing Officer has taken a possible view based on the facts and supported by legal jurisprudence. Thus, it is evident that the Assessing Officer had made enquiries and after examining the documents on record passed the assessment order. Since, the assessment was completed u/s. 143(3) of the Act the presumption is that the Assessing Officer has examined all documents on records before passing the order, even though elaborate discussion is not made in the order. 12. The Department had placed reliance on various decisions. We find that the said decisions are distinguishable on facts. For instance in the case of Kapil Mehta vs. PCIT(supra), the exercise of powers u/s. 263 of the Act was upheld by the Tribunal as it was a case of 'lack of enquiry'. In the case of CIT vs. Ballarpur Industries (supra), the Hon'ble High Court upheld exercise of jurisdiction by CIT u/s. 263 of the Act as the assessee failed to make any enquiry before allowing the claim. Similarly, in the ..... 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