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TMI Blog2014 (3) TMI 851X X X X Extracts X X X X X X X X Extracts X X X X ..... eview - an erroneous previous view warranting exercise of revisional jurisdiction cannot authorize a valid reassessment notice. During the assessment proceeding, and the first reassessment proceeding, the question of dealers’ commission as well as TDS on those amounts, had been gone into - The attempt to revisit this issue a third time is nothing but the tax authorities’ effort to overreach the law and resultantly a sheer harassment of the assessee – the notice and all further proceedings conducted pursuant to it are without jurisdiction – Decided in favour of Assessee. - W. P. (C) 1841/2013, C. M. APPL. 3519/2013 - - - Dated:- 11-3-2014 - S. Ravindra Bhat And R. V. Easwar,JJ. For the Petitioners : Sh. Kavin Gulati, Sr. Advoca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s asked to file details of the commission expenses. It submitted that the commission was paid to the distribution chain appointed by it across its territory of operations and that the commission expenses included commission paid to prepaid/postpaid scheme distributors, promotional merchandise distributed to the customers and collection and credit commission. The AO was of the opinion that the material supplied during the assessment proceeding could not justify the entire claim for Rs. 107.95 crores, but was sufficient to warrant a deduction of 75% of that amount. The AO therefore, added back 25% of the said sum of Rs. 107.95 crores, i.e Rs. 26,98,92,500/- and brought it to tax. 3. On 03-03-2010, the Revenue issued a reassessment notice i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was asked by assessing Officer to furnish the confirmation to whom this commission was paid. The onus for proving the genuineness of the claim of expenditure lies on the assessee. If the commission would have been paid to parties by the assessee then TDS should have been deducted and deposited to the Government account which has not been done. The expenditure as a whole should have been disallowed and added back to the income of the assessee. This has resulted in incorrect carry forward of loss of Rs. 80,96,77, 500/- involving potential tax effect of Rs.29,62,81,239/- The third ground was in respect of writing off of bad debts: 3.1 During the relevant previous year an amount of Rs.5,08,60,000/- was credited to the profit and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e-open the assessment yet again. This time, again the very same grounds which formed the first reassessment notice (dated 03-03-2010) were reiterated. The assessee reiterated its objections and pointed out that the first reassessment order of 30th December 2010 had considered all these questions, and it resulted in certain disallowances being confirmed and added back. It was, therefore, stated in the assessee s objections that the impugned second reassessment notice was unjustified in law. In this background, on 28-02-2013, the Revenue addressed a letter to the assessee, stating as follows: 1. The assessee has paid commission to dealers of Rs.107,95,70,000/-. The assessee was asked by Assessing Officer to furnish the confirmation to who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the commission paid or payable was an issue gone into. Consequently, the second reassessment notice, impugned in this case, really amounted to a review that the law did not permit, given the decisive nature of the ruling by the Supreme Court in Commissioner of Income Tax, Delhi vs. Kelvinator of India Ltd [2010] 320 ITR 561 (SC). 7. It was argued on behalf of the Revenue by Mr. Rohit Madan that the reassessment notice was, in the circumstances of this case, validly issued. Counsel stressed that the previous proceedings did not discuss or consider the question whether the commission paid to parties by the assessee should have led to TDS and deposited to the Government account. The previous order made in reassessment proceedings- w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion to the extent of 10%. As to the obligation to deduct tax, it was the specific subject matter of enquiry during the first re-assessment proceeding, because the notice, inter alia, alleged that ..If the commission would have been paid to parties by the assessee then TDS should have been deducted and deposited to the Government account which has not been done. The expenditure as a whole should have been disallowed and added back to the income of the assessee. In the assessee s letter in response to the first reassessment notice dated 15-12-2010, inter alia, this precise aspect as to details of commission paid to dealers, and supporting material in respect of TDS deducted, was referred to (this is found at pages 163-166 of the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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