TMI Blog2023 (12) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 10A of the I.T. Act and accordingly, assessee was not entitled to claim such expenditure under Section 10A of the I.T. Act, the non-drawing of such legal inference by the assessing officer at the relevant point of time cannot result in holding that there is no true and full disclosure of primary facts. Whether the re-assessment notice u/s 147 r/w Section 148 of the I.T. Act is merely a product of change in opinion and accordingly is impermissible in law? - A perusal of Section 148 of I.T. Act, the notice along with the reasons for reopening make it clear that the tangible material relied upon are the MSA s, Works contracts/SCW s, Invoices and other details relating to the deduction claimed under Section 10A of the I.T. Act. All of which is stated to have come to the notice of the Department relating to the Assessment Year 2008-2009. However, even on a perusal of para-2.10 of the Assessment Order relating to the Assessment Year 2008- 2009, the assessee as has been asked on innumerable occasions to submit MSAs and SOWs that it had with its clients the assessee has only been able to provide some of the sample MSAs and SOWs . Similar observation is made at par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007 - HELD THAT:- The nexus between the technical services rendered and the STP which is necessary for an allowable deduction u/s 10A is a legal requirement and existence of such nexus is a conclusion to be arrived at by the AO. Once the primary facts regarding providing of technical services outside India is made out, there would end the duty of the assessee and the question of nexus is a matter that the Assessing Officer ought to have clarified by further investigation. The reliance on documents that has come out as regards the proceedings for the Assessment Year 2008-2009 by way of MSAs, Work Contracts, SCWs and Invoices cannot be sufficient by itself to initiate proceedings for deduction under Section 10A of the I.T. Act in light of absence of nexus. If that were to be so, as the reliance on such documents for the purpose of reducing Section 10A of I.T. Act, the deduction for Assessment Year 2008-2009, itself has not attained finality and is subject to appeal as averred by the petitioner in the pleadings which remains uncontroverted. If that were to be so, the material relied upon in assessment proceedings for the Assessment Year 2008-2009 not having been finally adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) Whether the re-assessment notice under Section 147 r/w Section 148 of the I.T. Act is merely a product of change in opinion and accordingly is impermissible in law? 38 Whether the re-assessment notice under Section 147 r/w Section 148 amounts to borrowed satisfaction as it places reliance on findings recorded in the assessment proceedings recorded in the Assessment Year 2008-2009? 55 (iv) Whether the bar under third Proviso to Section 147 of the I.T. Act is a legal impediment insofar as the present re-assessment notice is concerned? 60 IV Implication of Circular No. 1/2013 80 The petitioner has filed three Writ Petitions before this Court i.e., W.P. /2013, 43236/2013, 43237/2013. The petitioner who is common in all these Writ Petitions has sought to challenge the re-assessment proceedings initiated pursuant to the notice issued under Section 148 read with Section 147 of the Income Tax Act, 1961 ( I.T. Act ). 2. W.P. No. 15061/2013 pertains to the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export turnover to the extent of Rs. 74,25,62,786/-, on the ground that the said amount related to the petitioner s personnel rendering technical services outside India. 8. The petitioner thereafter preferred an appeal to the Commissioner of Income Tax (Appeals)-I, Bangalore against the fresh Assessment Order dated 24.12.2010. The said appeal came to be dismissed by its order dated 18.10.2011. It is further submitted that the petitioner has preferred an appeal against the order dated 18.10.2011 before the Appellate Tribunal, which is still pending adjudication. 9. During the consideration of such of the proceedings referred to above, the Additional Commissioner of Income Tax Range-11, Bangalore, took up the petitioner s assessment for the Assessment Year 2008-2009 and had disallowed the petitioner s claim for deduction under Section 10A of the I.T. Act substantially. It is the case made out by the petitioner that taking note of the assessment for the Assessment Year 2008-2009, the Assessing Officer issued a notice dated 29.03.2012 under Section 148 r/w Section 147 of the I.T. Act proposing to reassess the petitioner s income for the Assessment Year 2005-2006. 10. Insofar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 147 of the I.T. Act proposing to reassess the petitioner s income for the Assessment Year 2006-2007. 15. Insofar as the reassessment under Section 148 of the I.T. Act, the reasons recorded prior to issuance of notice was responded by filing of detailed objections by the petitioner invoking provisions under Section 147 of the I.T. Act which came to be rejected by an order dated 22.08.2013. C. W.P. No. 43237/2013 16. The petitioner has sought for a declaration that the proceedings initiated by the respondent No. 1 Assistant Commissioner of Income Tax under Section 147 read with Section 148 of the I.T. Act for the Assessment Year 2007-2008 as being barred by limitation and without jurisdiction. The petitioner has also challenged the notice dated 08.10.2012 (Annexure- D ) under Section 148 r/w Section 147 of the I.T. Act for the Assessment Year 2007-2008. Further, the petitioner has also sought for quashing of the order bearing F.No.DCIT-C-11-4/BGL/13-14 dated 26.08.2013 (Annexure- J ) which is the order passed by respondent No. 2 rejecting the objections filed by the petitioner to the notice issued under Section 148 of the I.T. Act for reopening of assessment in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt as being on account of failure on part of the assessee to disclose fully and truly all material facts; (iii) that the belief is not on the basis of change of opinion; (iv) a valid sanction has been obtained from the sanctioning Authority after application of mind. III. CONTENTIONS OF THE RESPONDENT/REVENUE:- 22. The Revenue has raised common contentions in these Writ Petitions, which are as follows:- (a) The reassessment proceedings are taken up by the Authority on the basis of valid reasons recorded which satisfies the conditions for invoking reassessment proceedings and such reason is based on the tangible material noticed in the assessment for of the year 2008- 2009. That the materials, such as, Master Service Agreements (MSA), Works Contracts/ Scope of Work (SCW), Invoices and other details related to claim of rebate under Section 10A of the I.T. Act establishes that the assessee has earned income from Deputation of Technical Manpower (DTM) and not from export of software. Such material was not part of the assessment proceedings for the Assessment Years in question. (b) The Tangible material that has come forth during the assessment proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is as follows:- (i) Whether the petitioner assessee has failed to disclose fully and truly all material facts necessary for assessment? 25. In W.P. No. 15061/2013, for the purpose of initiating proceedings under Section 147 of the I.T. Act, as the Assessment Year in question is 2005-2006 and notice at Annexure- G seeking to initiate proceedings was issued on 29.03.2012, in terms of the proviso to Section 147 of I.T. Act, any action taken after the expiry of four years from the end of relevant assessment year would require that the assessee has failed to disclose fully and truly all material facts necessary for assessment. 26. The relevant extract of Section 147 of I.T. Act prior to its substitution reads as follows:- 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure by the assessee, or discovered by him on the basis of the facts disclosed, or otherwise the assessing authority has to draw inferences as regards certain other facts; and ultimately, from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Thus, when a question arises whether certain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and taking all these together, to decide what the legal inference should be. 9. There can be no doubt that the duty of disclosing all the primary facts relevant to the decision of the question before the assessing authority lies on the assessee. To meet a possible co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore inferences than one could be drawn, it would not be possible to say that the assessee should have drawn any particular inference and communicated it to the assessing authority. How could an assessee be charged with failure to communicate an inference, which he might or might not have drawn? 12. It may be pointed out that the Explanation to the sub-section has nothing to do with inferences and deals only with the question whether primary material facts not disclosed could still be said to be constructively disclosed on the ground that with due diligence the Income Tax Officer could have discovered them from the facts actually disclosed. The Explanation has not the effect of enlarging the section, by casting a duty on the assessee to disclose inferences to draw the proper inferences being the duty imposed on the Income Tax Officer. 13. We have therefore come to the conclusion that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this. 28. From the above, it can be stated as follows:- a) Assessee is to disclose the primary facts in his possession and the Assessing Authority on the basis of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing authority with respect to the proceedings in Assessment Year 2008-2009 and on such ground of non-disclosure fully and truly, that the re-assessment proceedings have been initiated. It is in such context that a finding is to be recorded as to whether the assessee has failed to disclose fully and truly all material facts necessary for assessment . 31. In the present case, the assessee has filed his declaration in Form-56F in terms of Rule 16D of the Income Tax Rules, 1962 whereby, assessee who seeks to claim deduction under Section 10A of the I.T. Act has to make a declaration in Form-56F in the form of report of an accountant along with the return of income [Rule 16D has been omitted by IT(21st Amendment) Rules, 2021 w.e.f. 29.07.2021] . The omission of Rule 16D was only later and was in existence on the relevant date when the assessee has filed the return of Income. In terms of the declaration, the accountant has certified that the petitioner was engaged in export of computer software and the relevant details relating to deduction under Section 10A of the I.T. Act has been detailed in Annexure- A . The further declaration in Annexure- 1 annexed to Annexure- A which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Number of consecutive years of which deduction is claimed Note 1 Nine Seven Six Third Amount of sale proceeds, if any that are credited to separate account maintained by the assessee with any bank outside India and the reference number of Reserve Bank of India according permission for the same 13,484,517 Reference Number of permission EC. BY. OPL363/2541 (1256)-92/93 EC. BY. OPL. 53/2541 (1793)-93/94 163,088,699 Reference Number of permission EC. BY. OPL363/2541 (1256)-92/93 EC. BY. OPL. 53/2541 (1793)-93/94 231,579,813 Reference Number of permission EC. BY. OPL363/2541 (1256)-92/93 EC. BY. OPL. 53/2541 (1793)-93/94 1,350,964,255 Reference Number of permission EC. BY. OPL363/2541 (1256)-92/93 EC. BY. OPL.53/2541 (1793)-93/94 32,231,736 Reference Number of permission EC. BY. OPL363/2541 (1256)-92/93 EC. BY. OPL. 53/2541 (1793)-93/94 32. The obligation of disclosure extends to disclosing fully and truly material facts necessary for assessment. Pursuant t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 10A of the I.T. Act, the non-drawing of such legal inference by the assessing officer at the relevant point of time cannot result in holding that there is no true and full disclosure of primary facts. (ii) Whether the re-assessment notice under Section 147 r/w Section 148 of the I.T. Act is merely a product of change in opinion and accordingly is impermissible in law? 34. In W.P. No. 15061/2013, the notice at Annexure- G under Section 148 of I.T. Act came to be issued on 29.03.2012 seeking to reassess the income which has escaped assessment in terms of Section 147 of the I.T. Act with respect to the Assessment Year 2005- 2006, the assessee was called upon to deliver return within 30 days. Subsequently, the reasons for initiating proceedings under Section 147 of the I.T. Act for re-opening the assessment was communicated, which reads as follows: 2. The said return had been taken up for scrutiny and an order u/s 143(3) dated 30.12.2008 had been passed arriving at a total income of Rs. 72,52,77,770/-. The various issues of additions and disallowances made in the assessment order are as below: 1. Recomputation of deduction u/s 10A a. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (DTM) of providing short duration technical manpower abroad. Such business activity commonly known as Body Shopping was eligible for deduction u/s 80HHE of the I.T. Act and was not included as an eligible activity u/s 10A of the I.T. Act. It had been noticed from the contracts and invoices that the assessee company had substantial revenue from such DTM activity and it claimed the revenue receipt from the same as software development activity. It had been detected that assessee had made similar claims for earlier Assessment Years also. 6. None of these facts of DTM activity conducted, onshore revenues earned without any link to the STP Undertakings in India have been disclosed by the assessee in the returns of income and the Annual Reports submitted. It is also seen that failure on the part of assessee to disclose fully and truly all materials with regard to deduction u/s 10A has resulted in allowing excess deduction u/s 10A for AY 2005-06. 35. It is the contention of Sri Percy Pardiwalla, learned Senior Counsel appearing on behalf of Ms.Tanmayee Rajkumar for the petitioner/assessee, that the reasons for re-opening would indicate the stand of the Revenue that the deputati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which, we are afraid, Section 147 would give arbitrary powers to the assessing officer to reopen assessments on the basis of mere change of opinion , which cannot be per se reason to reopen. 6. We must also keep in mind the conceptual difference between power to review and power to reassess. The assessing officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfillment of certain precondition and if the concept of change of opinion is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. 7. One must treat the concept of change of opinion as an in-built test to check abuse of power by the assessing officer. Hence, after 1-4- 1989, the assessing officer has power to reopen, provided there is tangible material to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words reason to believe but also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lopment or production of computer constitutes a business distinct from the business of export out of India of computer software. 16. As mentioned in the show-cause notice, the profits derived from the export of computer software is eligible for deduction u/s 10A of the I.T. Act, 1961, whereas, u/s 80HHE, the profits derived from the export of computer software as well as the business of rendering technical services outside India are eligible for deduction. Section 10A itself recognizes that there can be certain technical services rendered outside India in connection with the business of export of computer software and accordingly, provides by way of clause (iv) of Explanation 2 that the expenses incurred in foreign currency for rendering technical services outside India are required to be reduced from the export turn over, while computing the deduction u/s 10A. The issue involved in the assessee s case which is one of the subject matters of the proposed action u/s 263 is whether the activity of rendering technical services outside India, was a business carried on by the assessee company distinct from the business of export of computer software and if so, the receipts on accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T.Act. 42. The conclusion at para-14 is extracted hereinbelow:- 14. In view of the above discussion, exclusion of the abovementioned expenses namely expenses incurred in foreign exchange in providing technical services outside India to the extent of Rs. 263,01,80,361/-, has been restricted to export turn over only and accordingly deduction u/s 10 A of the IT Act has been computed. 43. It is clear that the Assessing Officer excluding the expenditure incurred by the assessee in connection with the provision of technical services outside India and specifically expenditure involved relating to Company s employees visit to client s location to provide software development services to the clients have been excluded [see para 10]. If that were to be so, revisiting the decision arrived at once again to further reduce the eligible deduction under Section 10A of the I.T. Act would amount to a review on the ground of change of opinion which is impermissible. 44. Though in Kelvinator (supra), the observation is that where there is tangible material to come to the conclusion that there is escapement of income from assessment, in the present case, the tangible material as asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the reasons assigned are as follows:- 3. During the course of scrutiny proceedings conducted for A.Y.2008-09 various information including a large number of Master Service Agreements, Work Contracts/Scope of works, Invoices and other details related to the deduction claimed u/s 10A of the Income-tax Act were called for. On account of detailed fact finding during the course of this scrutiny proceedings for A.Y.2008-09, the following additions/disallowances to the returned income for A.Y. 2008-09, were made a. It is noticed that the assessee company is rendering a large body of work onshore abroad related to software developmental activities. However, it was detected that none of the said software development activities onshore abroad had any link whatsoever with the STP Undertakings in India. It had been noticed that the assessee had claimed all revenue from Software developmental activities under STPs based in India only. No part of the income had ever been admitted as generated out of the company s activities abroad. During the course of investigation conducted, it had been detected on facts as per various contracts/SOW, work orders and invoices that a large body of w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertakings in India have been disclosed by the assessee in the returns of income and the Annual Reports submitted. It is also seen that failure on the part of assessee to disclose fully and truly all materials with regard to deduction u/s 10A has resulted in allowing excess deduction u/s 10A for AY 2005-06. 49. Clearly, reasons for reopening rests on the satisfaction of the Assessing Officer who has passed an Assessment Order for the Assessment Year 2008-09 which would amount to substitution of the assessment orders of reasons to believe by borrowed satisfaction of the Assessing Officer who has passed an order for the year 2008-09 which is impermissible in law. (iv) Whether the bar under third Proviso to Section 147 of the I.T. Act is a legal impediment insofar as the present re-assessment notice is concerned? 50. The third proviso to Section 147 of I.T. Act as it existed prior to amendment of Finance Act 2021 reads as follows: Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o applicable as regards the Assessment Year 2006-2007 and 2007-2008 and are answered as hereinbelow:- In W.P. 43236/2013:- 54. Insofar as Assessment Order relating to the Assessment Year 2006-2007 has dealt with the computation of deduction under Section 10A of the I.T. Act and the relevant paragraphs which deal with the said aspect are as follows: 12. Even though assessee has incurred expenditure to the extent of Rs. 294,66,48,857/- which is of the nature of expenses incurred in providing technical services outside India the same has not been excluded from the export turn over as per the above provisions of the I.T. Act. In respect of expenditure incurred to the extent of Rs. 17,28,91,032/- towards telecommunication charges attributable to the delivery of software outside India, the same has been deducted both from export turn over and total turn over contrary to the provisions of Section 10A of the I.T. Act. 13. When the above issues are raised before the AR of the assessee, AR of the assessee made detailed submissions vide letter dated : 10/12/09. The gist of the submission made by the assessee are that the activities regarding which the expenditure incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xclusion of the above mentioned expenses namely expenses incurred in foreign exchange in providing technical services outside India to the extent of Rs. 294,66,48,857/- and expenses incurred on communication expenses attributable to the delivery of software outside India to the extent of Rs. 17,28,91,032/-, has been restricted to export turn over and accordingly deduction u/s 10A of the IT Act has been computed. 24. As discussed above, the deduction u/s 10A of the IT Act has been computed after excluding the expenses incurred in foreign exchange in respect of providing technical services outside India and expenses on telecommunications attributable to the delivery of software outside India and the computation has been done for all the eligible units under Section 10A disregarding whether the unit is profit making or loss making. 55. A perusal of the above would make it clear that the Assessing Officer has specifically bestowed attention on the extent of Section 10A deduction with specific reference to expenses incurred in foreign exchange in respect of providing technical services outside India. 56. The notice under Section 148 of the I.T. Act dated 13.9.2012 which see ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed with respect to MSAs, Work orders, SOWs and Invoices called for and seen during the course of assessment proceedings for A.Y. 2008-09. 5. As per A.Y. 2008-09, 12.5% of the total onsite revenues by the assessee has been held to be out of deputation of technical man power receipts. Similarly, 12.5% of the total onsite receipts of the assessee have been held to be on account of onshore revenues not related to the STP undertakings in India. As this preliminary estimation and considering similar percentages of DTM activity and onshore revenue activities for the year, more than Rs.26.06 crores of software services revenue claimed by the assessee for the year is not eligible for deduction u/s. 10A of I.T. Act. 6. None of these facts of DTM activity conducted onshore revenues earned without any link to the STP undertakings in India have been disclosed by the assessee in the returns of income and the Annual Reports submitted. It is also seen that failure on the part of assessee to disclose fully and truly all material facts with regard to deduction u/s.10A has resulted in allowing excess deduction u/s. 10A for A.Y. 2006-07. 57. The question as to weather the Deputation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifically dealt with under the caption computation of deduction under Section 10A of the I.T. Act, out of the total expenditure in foreign currency of Rs. 342,32,22,291/-, an amount of Rs. 336,14,67,945/- was the expenses incurred in providing technical services outside India. Insofar as the deduction claimed under Section 10A of the I.T. Act and queries were raised, the observations of the Assessing Officer is as follows: 10. When the above issues were raised before the AR of the assessee, AR of the assessee made detailed submissions. The gist of the submission made by the assessee are that the activities regarding which the expenditure incurred in foreign exchange do no amount to providing of technical services outside India and regarding exclusion of communication expenses from both export turn over and total turn over, the same was claimed to be done on the basis of parity between export turn over and total turn over and also on the basis of definition of total turn over else where in the provisions of the I.T. Act. 11. In light of the above submissions, on verification of the details collected in respect of expenditure incurred in foreign exchange, it is clear that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to disallowing of expenditure is reflected in paras-3(a) and 3(b) and the same is extracted hereinbelow:- 3. a. It is notified that the assessee company is rendering a large body of work on shore related to software developmental activities. However, it was detected that none of the said software development activities onshore abroad had any link whatsoever with the STP undertakings in India. It had been noticed that the assessee had claimed all revenue from software development activities under STPs based in India Only. No part of the income had ever been admitted as generated out of the Company s activities abroad. During the course of investigation conducted, it had been detected on facts as per various contracts/SOW, work orders and invoices that a large body of work related to software development activity conducted onshore abroad had no link whatsoever activity was treated as no related to the undertaking eligible for deduction u/s. 10A of the I.T. Act. Such onshore receipts were treated as Company wide software receipts not related to the STP undertakings in India. This had been concluded and the deduction claimed u/s.10A of the I.T. Act had been drastically red ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted under the ambit of particular MSA and whether SOW should be given precedence over MSA. The matter has been examined. It is clarified that the tax benefits under Sections 10A, 10AA and 10B would not be denied merely on the ground that a separate and specific MSA does not exist for each SOW. The SOW would normally prevail over the MSA in determining the eligibility for tax benefits unless the Assessing Officer is able to establish that there has been splitting up or reconstruction of an existing business or non-fulfillment of any other prescribed condition. 64. The Circular as extracted hereinabove makes it clear that the benefit under Section 10A is not dependant on separate MSA and the Statement of Works would prevail over the MSA. If that were to be so, the discovery of tangible material in the form of MSAs does not by itself have the effect of permitting revisiting of the closed assessment proceedings. Further, the Circular also deals with the question at para-2(i)(b) as regards receipts from deputation of technical man power for such onsite software development at the client s place . The clarification in this regard at para 2(i)(b) which is of relevance is extrac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computer software (including services for development of software) outside India shall be deemed to be the profits and gains derived from the export of computer software outside India , and a clarification has been sought on the impact of the Explanation on the tax-benefits as compared to the situation that existed prior to the amendments. The matter has been examined. In view of the position of law as it stands now, it is clarified that the software developed abroad at a client s place would be eligible for benefits under the respective provisions, because these would amount to deemed export and tax benefits would not be denied merely on this ground. However, since the benefits under these provisions can be availed of only by the units or undertakings set up under specified schemes in India, it is necessary that there must exist a direct and intimate nexus or connection of development of software done abroad with the eligible units set up in India and such development of software should be pursuant to a contract between the client and the eligible unit. To this extent, Circular No. 694 dated 23.11.1994 stands further clarified. 67. It is clear that the clarification sti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Act in the guise of reassessment would be a futile exercise. 69. Accordingly, the Writ Petitions are disposed off in terms of the following:- (i) In W.P. No. 15061/2013, the re-assessment notice issued under Section 147 r/w Section 148 of the I.T. Act at Annexure 'G' dated 29.03.2012 for the Assessment Year 2005- 2006, is set aside and consequently, the order bearing F.No.DCIT-C-11(4)/12-13 at Annexure 'P' dated 13.03.2013 passed by respondent No. 1 rejecting the petitioner s objection as regards jurisdiction to issue Section 148 notice, is set aside. (ii) In W.P. No. 43236/2013, the re-assessment notice issued under Section 147 r/w Section 148 of the I.T. Act at Annexure 'D' dated 13.09.2012 for the Assessment Year 2006- 2007, is set aside and consequently, the order bearing F.No.DCIT-C-11(4)/BGL/13-14 at Annexure 'J' dated 22.08.2013 passed by respondent No. 2 rejecting the petitioner s objection as regards jurisdiction to issue Section 148 notice, is set aside. (iii) In W.P. No. 43237/2013, the re-assessment notice issued under Section 147 r/w Section 148 of the I.T. Act at Annexure 'D' dated 08.10.2012 for the Assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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