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TMI Blog2013 (2) TMI 269X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment, nearly a year elapsed before an order of assessment was made on 29 December 2008. No steps were taken to move this Court, if the Petitioner had any subsisting grievance that its objections to the reasons for reopening were not dealt with by a speaking order. The Petitioner chose to stand by and wait until an order of assessment was passed on 29 December 2008. The Petitioner participated in the proceedings before the AO which resulted in the order of assessment dated 29 December 2008. In the proceedings, pursuant to the notice under Section 263, the Petitioner urged that it had not been provided enough time to furnish details during the proceedings and it was on this basis that the proceedings were remitted back to the AO for fresh consideration. In that view of the matter, following the order under Section 263, the proceedings have been restored to the Assessing Officer to frame a fresh assessment order de novo after affording the Petitioner an opportunity of being heard. There is no merit in the contention of the Petitioner that the Assessing Officer must now first dispose of its objections to the reopening of the assessment before proceeding to frame an assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007, the ADIT (International Taxation)-3(2), Mumbai, furnished a copy of the reasons. The reasons which have been recorded advert to the provisions of Section 115AD and state as follows: 6. The assessee is registered with SEBI as Foreign Institutional Investor for the purpose of investment and not for carrying any business in India. The assessee has purchased and sold the shares which fall under the definition of securities and also the assessee is foreign institutional investor. Therefore, the income earned by the assessee on sale of shares is to be assessed under the head capital gains instead of business income as claimed by the assessee. As per clause 5 of Article 13 of Double Taxation Avoidance Agreement between India and Singapore, the gains from the alienation of shares other than those mentioned in paragraph 4 in a company which is a resident of a Contracting State may be taxed in that State. 7. Therefore, the capital gains earned by the assesee is to be taxed in India as per the provisions of section 115AD of the Income-tax Act, 1961 read with Article 13 of the Double Taxation Avoidance Agreement between India and Singapore. Further, it is also necessary to mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of opinion on the part of the Assessing Officer. By a letter dated 11 August 2008, the Petitioner requested the Assessing Officer to address the objections raised to the reopening of the assessment by a speaking order. 7. The Assessing Officer passed an order of assessment under Section 143(3) read with Section 147 on 29 December 2008. The Assessing Officer held that the total income of Rs.10.44 crores was liable to be brought to tax under the head of capital gains . The Assessing Officer held that under Article 13(4) of the DTAA between India and Singapore, gain from the alienation of the shares of the capital stock of a Company, the property of which principally consists of immovable property situated in a contracting State may be taxed in that State. Yet despite having noted this, the Assessing Officer came to the conclusion that the taxable income of the Petitioner was nil and accordingly made an order of assessment. 8. On 25 January 2011, a notice was served on the Petitioner under Section 263(1) principally on the basis that while completing the assessment under Section 143(3) read with Section 147 on 29 December 2008, the Assessing Officer had erred in allowing to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 by a communication of the DDIT (International Taxation)-4(2), Mumbai. The latter communication specifically intimated to the Petitioner that requisitions in terms of the decision of the Supreme Court in the case of GKN Driveshafts as referred have, therefore, been met with . At that stage, the Petitioner did not file any proceeding before this Court under Article 226 of the Constitution for espousing the grievance that the Assessing Officer had not passed a formal order on the objections of the Petitioner against the reopening of the assessment. As the record would indicate, the Assessing Officer had issued a notice under Section 143(2) to the Petitioner in connection with the assessment proceedings. The order of assessment dated 29 December 2008 records that in pursuance of the notice that was issued under Section 143(2) and Section 143(1), the representative of the Petitioner attended the proceedings before the Assessing Officer, filed details which were on record and that the case was heard and discussed. Even during the pendency of the assessment proceedings, the Petitioner did not move this Court with the grievance that a speaking order disposing of its objections to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Petitioner to assert that its objections to the reasons on the basis of which the assessment is sought to be reopened must be addressed at this stage. The Petitioner was aware as far back as on 7 January 2008 that the Assessing Officer had taken the view that the requirements set out in GKN Driveshafts have been fulfilled. If the Petitioner had any grievance, it was necessary for it to move the Court at that stage. The Petitioner participated in the assessment proceedings and cannot now set the clock back. 12. At the same time, we clarify that we have not expressed, in these proceedings, a finding on the merits of the rival contentions on whether any addition to the taxable income is liable to be made in the assessment proceedings. Having perused the reasons on the basis of which the assessment is sought to be reopened, we hold that the Assessing Officer has not acted outside his jurisdiction while issuing a notice under Section 148 of the Income Tax Act, 1961. At this stage, the issue is not whether it can conclusively be held that income has escaped assessment, but only whether there is reason to believe on the part of the Assessing Officer that income has escaped assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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