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2016 (8) TMI 769 - HC - Income TaxRe-opening of assessment - TDS u/s 195 - Held that - It was only after such detailed scrutiny that the Assessing Officer passed the order of assessment in which he made no additions on the ground of failure to deduct tax at source. It is true that he has not discussed this issue actively in the order of assessment. However, this would not change the position insofar as the question of scrutinizing the issue is concerned. Any attempt on his part to reopen the assessment would thus be on a change of opinion since no fresh or new material has come on record, as can be seen from the reasons recorded in which Assessing Officer referred to having noticed such facts on verification of the records. - Decided in favour of assessee.
Issues:
Challenging notice for reopening assessment for AY 2011-12 due to failure to deduct TDS on sales commission paid to non-residents. Analysis: The petitioner, a company, filed a return for AY 2011-12 showing a loss, which was later revised. The Assessing Officer completed the assessment after scrutiny but later issued a notice for reopening the assessment, citing failure to deduct TDS on sales commission paid to non-residents as the reason. The petitioner objected to the notice, but the objections were rejected. The notice was issued within the 4-year period from the end of the relevant assessment year. The Assessing Officer claimed that failure to deduct TDS on the sales commission attracts provisions of Section 40(a)(i) of the Income-Tax Act, 1961. During the assessment proceedings, the petitioner provided details of TDS deductions and foreign selling expenses, justifying the expenditure incurred. The petitioner clarified that payments to foreign agents were not liable for TDS as the agents were working outside India without a permanent establishment in India. Despite the detailed scrutiny and explanations provided by the petitioner, the Assessing Officer did not make any additions regarding the failure to deduct TDS in the final assessment order. The court noted that the Assessing Officer's attempt to reopen the assessment was based on a change of opinion, as no new material was presented, and the issue was thoroughly scrutinized previously. Consequently, the court quashed and set aside the impugned notice dated 10.3.2016, ruling in favor of the petitioner and disposing of the petition.
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