9911796707
TMI Blog2025 (3) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 10A of 1961 Act. It is stated that the case of the petitioner was selected for scrutiny and notice under Section 143 of 1961 Act was issued. Since the petitioner had entered into international transaction, the case was referred to Transfer Pricing Officer (TPO) for determination of Arms Length Price (ALP) for the said transaction. The petitioner is said to have replied to the notices issued seeking specific queries regarding Section 10A deductions. The TPO passed a draft assessment order determining the income of the petitioner on the higher side as against the declared income. The petitioner is said to have filed objections before the Dispute Resolution Panel (DRP). The DRP granted partial relief on 28.11.2014. Thereafter, final assessment order was passed on 30.12.2014 and aggrieved by the final assessment order, petitioner filed appeal before the Income Tax Appellate Tribunal (for short, 'ITAT') on 22.01.2015. Thereafter, respondent No. 1 issued notice under Section 148 of the 1961 Act on 31.03.2017 which was said to have been received by the petitioner on 01.04.2017. The petitioner sought reasons for reopening the assessment by letter dated 11.04.2017. The first r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt to reasons supplied for re-opening on the ground that income has escaped assessment, submits that it is re-appreciation of material already on record and there is no new material. There was no failure on the part of the petitioner to disclose all material facts necessary for assessment and further he submits that it is a case of change of opinion by the Assessing Authority. It is submitted that the allegation is with regard to computing Section 10A deduction and it is explained by the petitioner at the time of Section 143 (2) notice and as such re-opening of assessment on the ground that income has escaped assessment on the same material which has undergone process of assessment is impermissible. Learned counsel for the petitioner places reliance on the decision of the Full Bench decision of this Court dated 27.01.2021 in W.A. No. 1145/2015 as well as Co-ordinate Bench decision in BANGALORE TURF CLUB LTD., VS. UNION OF INDIA [(2024) 161 TAXMANN.COM 353 (KARNATAKA)]. 7. Per contra, learned counsel Sri. Y.V. Raviraj for respondents-Revenue made all efforts to justify the notice issued under Section 148 of 1961 Act and also rejection of objections filed by the petitioner to Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nion on consideration of the same material is of no ground to invoke Section 147 of 1961 Act. Relevant portion of the above decision which is relevant for the present case reads as follows: "4. On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfilment of the said conditions alone conferred jurisdiction on the assessing officer to make a back assessment, but in Section 147 of the Act (with effect from 1-4-1989), they are given a go-by and only one condition has remained viz. that where the assessing officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1-4-1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing 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. We must also keep in mind the conceptual difference between power to review and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is required to make a true and full disclosure of primary facts at the time of original assessment. 12. In the case on hand, petitioner - assessee had filed return of income for the assessment year 2010-11. When the case of the petitioner was selected for scrutiny under Section 143 (2) of 1961 Act, the petitioner had disclosed and answered the specific queries regarding Section 10A deductions claimed by the petitioner before the TPO. On examination of the material placed on record by the petitioner-assessee, the Assessing Officer has concluded the assessment and against the assessment order, the petitioner is in appeal which is an admitted fact. 13. On issuance of notice under section 148 of 1961 Act which is beyond four years, the petitioner sought reasons for re-opening the assessment. The petitioner was furnished reasons for re-opening vide letter dated 03.11.2017. The reasons furnished for reopening assessment for the year 2010-11 on the ground of escapement of income reads as follows: "The assessee company, filed its return of income for the A.Y. 2010-11 on 24.09.2010 declaring total Rome Rs22.00.27.866. Subsequently order 143 (3) read with 144C of the 1.1. Act was complet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eclared at the time of assessment or scrutiny under Section 143 (2) of 1961 Act. It is pertinent to note here that the petitioner had declared income of Rs. 22,00,27,866/- and the Assessing Authority passed draft assessment order determining the income of the petitioner at Rs. 4,46,54,65,833/-. In fact, it is stated that while assessing the income, Section 10A deductions were reduced from the claimed amount. Moreover, the reasons would not indicate the failure of the petitioner to disclose any information or that he has not disclosed true and full material facts which is one of the ingredients of Section 147 of 1961 Act. A careful reading and appreciating the reasons, I am of the view that it is a change of opinion and on the basis of changed opinion, proceedings under Section 147 of 1961 Act for re-opening of assessment on the allegation of escaped income is initiated, which is not permissible. 15. The respondents in their statement places reliance on the decision of the Hon'ble Apex Court in KALYANJI MAVJI AND COMPANY VS. C.I.T. WEST BENGAL - II, (1976) 1 SCC 985 to say that in the original assessment, the income liable to tax has escaped assessment due to oversight, inadver ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
