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2021 (8) TMI 1015 - HC - Income TaxReopening of assessment u/s 147 - validity of the notice issued u/s 148 - case reopened is beyond four years, but within six years - HELD THAT - In the present case, the petitioner has submitted its objections elaborately and the said objections were disposed of by the respondent by issuing an order and while disposing of the objections, the respondent had considered the objections filed by the petitioner and rejected the objections on the ground that for the AY 2003-04, ADIT, International Taxation, Chennai, issued a Notice u/s 148 on similar ground that claim of the assessee as regards payment made towards geological studies, seismic data acquiring and processing and chartered hire charges would not fall for consideration u/s 44BB of the Act to go for TDA at the rate of 4%. On the contrary, the services fell within the definition of fee for technical services . When the AO could able to trace out the material from and out of the materials submitted by the assessee, such new informations or materials undoubtedly would provide the AO for 'reason to believe' to reopen the assessment. This being the factum established, this Court is of the considered opinion that the respondent could able to establish that the AO has 'reason to believe' for reopening of assessment. The other intricacies raised by the assessee on merits are to be adjudicated elaborately with reference to the original documents and evidences to be made available before the authority. Such an elaborate adjudication on merits need not be entertained by the High Court in a writ proceedings under Article 226 of the Constitution of India. In the present case, the reopening is based on certain materials on record, then further adjudications are to be done before the authority based on the materials available on record. The sufficiency of the reasons need not be gone into by the High Court in a writ proceedings. Thus, the petitioner is bound to co- operate for the completion of the reopening proceedings initiated u/s 147/148 of the Act and the respondent is directed to conclude the assessment / reassessment proceedings as expeditiously as possible by following the procedures as contemplated.
Issues Involved:
1. Legal validity of the notice issued under Section 148 of the Income Tax Act, 1961. 2. Whether the reopening of the assessment constitutes a change of opinion. 3. Whether the Assessing Officer had 'reason to believe' that income chargeable to tax had escaped assessment. 4. Compliance with procedural requirements under Section 147/148 of the Income Tax Act. Detailed Analysis: 1. Legal Validity of the Notice Issued under Section 148 of the Income Tax Act, 1961: The petitioner challenged the notice issued under Section 148 dated 30.03.2011 and the consequential order dated 12.03.2013, arguing that the reopening of the assessment was based on the same materials already scrutinized during the original assessment proceedings. The court examined whether the notice and subsequent proceedings were legally valid under the provisions of the Act. 2. Whether the Reopening of the Assessment Constitutes a Change of Opinion: The petitioner argued that the reopening of the assessment was merely a change of opinion, as the materials and information provided during the original assessment were the same as those used to justify the reopening. The court considered the principles established by previous judgments, which state that if the reason for reopening is a change of opinion, then the proceedings are liable to be set aside. 3. Whether the Assessing Officer Had 'Reason to Believe' that Income Chargeable to Tax Had Escaped Assessment: The court evaluated whether the Assessing Officer had tangible material to justify the reopening of the assessment. The respondent argued that the TDS deduction by the petitioner was improper and should have been at a higher rate. This issue was not adjudicated in the original assessment, providing the Assessing Officer with 'reason to believe' that income had escaped assessment. The court found that the Assessing Officer's belief was based on the discovery of new information from the existing materials, satisfying the requirements of Section 147. 4. Compliance with Procedural Requirements under Section 147/148 of the Income Tax Act: The court emphasized the importance of following procedural requirements, including providing the petitioner with reasons for reopening and allowing objections to be filed. The court noted that the petitioner had been given an opportunity to object, and these objections were considered and disposed of by the respondent. The court also highlighted the distinction between the final assessment order and the order disposing of objections, stating that the latter does not require subjective satisfaction. Conclusion: The court concluded that the reopening of the assessment was justified as the Assessing Officer had 'reason to believe' based on new information derived from the materials already scrutinized. The procedural requirements under Section 147/148 were duly followed, and the reopening did not constitute a mere change of opinion. The writ petition was dismissed, and the respondent was directed to conclude the reassessment proceedings expeditiously. Order: The writ petition stands dismissed. No costs.
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