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2018 (2) TMI 982 - HC - Income TaxValidity of reopening of assessment - A.O. power to review in the absence of any fresh tangible material - eligible reason to believe - disallowance u/s 40(a)(ia) for non-compliance of the provisions of section 194(c) Held that - Assessing Officer raised a specific query regarding the nature of the assessee s business and the same was answered in writing by the assessee. The nature of the transaction was spelt out in detail. On the basis thereof the assessee s contention that he was merely a commission agent was obviously accepted. The original assessment order proceeded on that basis. The subsequent proceedings for reopening were held to be on change of opinion. There is also held that there was no new information or material. The Tribunal on this basis and after following the judgments of Delhi High Court in Madhukar Khosla v. Assistant Commissioner of Income Tax (2014 (8) TMI 568 - DELHI HIGH COURT) and Orient Crafts Ltd. (2013 (1) TMI 177 - DELHI HIGH COURT) rightly allowed the appeal on the ground that the Assessing Officer was not entitled to assume jurisdiction under section 147 of the Act in the absence of any new information or material. - Decided in favour of assessee
Issues:
1. Jurisdiction under section 147 of the Income Tax Act, 1961 and the validity of the assessment order for the year 2008-09. Detailed Analysis: The High Court judgment pertains to an appeal against the order of the Income Tax Appellate Tribunal concerning the jurisdiction under section 147 of the Income Tax Act, 1961. The Assessing Officer had passed an order under section 144 read with section 147 disallowing a freight payment of about &8377; 1.88 crores for non-compliance of tax deduction at source provisions. The Tribunal quashed the assessment order, stating that the Assessing Officer wrongly assumed jurisdiction under section 147 without any new material. The appellant raised a substantial question of law regarding the justification of quashing the assessment order. The original assessment order highlighted the nature of the assessee's business as a transport booking agency, acting as a commission agent between firms and truck owners. The Tribunal referred to previous judgments, including those of the Delhi High Court, to support its decision to allow the appeal based on the lack of new information or material for reopening the assessment. Furthermore, the Assessing Officer's specific query regarding the nature of the assessee's business was adequately answered in writing, emphasizing the commission agent role. The original assessment order proceeded on this basis, indicating that the subsequent reopening was based on a change of opinion without new information. The appellant's argument that the transaction was on a principle-to-principle basis rather than as an agent was considered, with the reasons for reopening centered on the lack of details for the freight payments. The Tribunal's decision was supported by the judgments of the Delhi High Court, which emphasized the need for fresh material to assume jurisdiction under section 147. The High Court found the Tribunal's decision reasonable and not perverse, leading to the dismissal of the appeal. In conclusion, the High Court upheld the Tribunal's decision, emphasizing the requirement of new information or material for assuming jurisdiction under section 147. The judgment highlighted the importance of assessing the nature of business transactions and the need for specific details to support assessment orders, ultimately leading to the dismissal of the appeal against the quashed assessment order for the year 2008-09.
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