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TMI Blog2018 (4) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... ord the AO should not have issued the reassessment notice. - Decided in favour of assessee. - I. T. A. /2277/Mum/2016, C. O. /300/Mum/2017 - - - Dated:- 4-4-2018 - S/Sh. Rajendra, Accountant Member Ravish Sood, Judicial Member Revenue by : Shri L. K. S. Dehiya-DR Assessee by : Ms. Krupa R. Gandhi ORDER Per Rajendra, AM Challenging the order dated 28/01/2016 of CIT(A)-8, Mumbai, the Assessing Officer (AO) has filed the present appeal. The assessee has raised a Cross Objection for the same. Assessee - company engaged in providing cellular mobile services and trades in accessories filed its return of income at Rs. Nil after set off of brought forward business loss. The AO completed assessment on 27/3/2014, u/s. 143(3) of the Act, determining the income of the assessee at ₹ 96. 41 crores. 2. During the reassessment proceedings, in respect of services provided for roaming charges, the AO held that payments were in nature of revenue sharing, that the assessee did not deduct tax at source on the sale, that the expenses debited on account of roaming charges were not allowable as per provisions of section 40(a)(ia) of the Act for non-deduction of tax at s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing charges at the stage of the assessment made u/s. 143 (3) of the Act, that he had concluded that there was no amount to be disallowed u/s. 40(a)(ia) of the Act on account of non-deduction of tax at source u/s. 194J, that the facts in the case under consideration left no scope for any other interpretation. He referred to cases of Kelvinator of India Ltd (256 ITR 1), NYK line (India) Ltd. (346 ITR 361), Calcutta Discount Company Ltd. (41 ITR 191) and observed that mere change of opinion in the mind of the AO could not be basis for forming reason to believe, that the section 147 did not empower the AO to review the assessment order on the same facts, that fresh application of mind by AO on similar facts would tantamount to review of his own decision, that the AO had to bring/no material on record, that in absence of fresh/new material or fresh information he would have no jurisdiction to initiate the proceedings u/s. 147/148, that the perusal of the reasons recorded by the AO for initiating reassessment proceedings clearly showed that he had used the same material-that was available at the time of original assessment-for reopening the case, that it was a case of mere change of opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payment. In fact, the services rendered in respect of roaming charges are technical services, which involved human interface/interaction/skill. Further, mobile connectivity at large scale requires reasonable amount of human and technical intervention for smooth functioning of the network. Just as in the case of assessee, the other mobile service providers have to keep their highly technical and sophisticated equipments in operating condition. Hence, human intervention cannot be ruled out. Further, FTS as per section 194J has same meaning as defined in explanation 2 to clause (vii) of subsection 1 of section 9, which is reproduced as year under: For the purpose of this section . . In view of the above, the roaming charges are in the nature of fee for technical services u/s. 194J. However, the assessee has not deducted TDS on the same, therefore whole of the expenses debited on account of roaming charges are not allowable as per provisions of section 40(a)(ia) of the IT Act for non-deduction of TDS u/s. 194J of the IT Act. In view of the above, I have reason to believe that income amounting to ₹ 96. 419 crore has escaped assessment in the hands of M/s. Idea cellula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that existed prior to the assessment, for, in the latter case, he does not receive any new information; all the facts were already within his knowledge. (emphasis added). From the above discussion, it can safely be said that section 147/148(Sec. 34 of the 1922 Act)were introduced to prevent the escapement of income from taxation, that the mere fact that a discovery of under-assessment was made would not justify the officer in acting under these section, that the information must be of new facts, that if those facts were already in the possession of the officer, the language of the section would not be satisfied. In our opinion, amended provisions of section 147 has not changed the position-the section stipulates that if there is no fresh material the re-opening would not be justified. Similar view was taken by the Hon ble Supreme Court in the case of Bhanaji Lavaji(79 ITR 582). Here, we would like to refer to the matter of Sahjanand Medical Technologies Pvt. Ltd. (397 ITR 607), of Hon ble Gujarat High Court. In the matter of the assessee was in the business of manufacturing specialised medical equipment. For the AY. 2010-11, the AO made several additions and disallowanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to consider the facts of the case. During the original assessment proceedings, the AO had made inquiries about roaming charges, that the assessee had detailed submissions in that regard, that being satisfied with the explanation of the assessee, he passed an order u/s. 143(3) of the Act, that during the original assessment he allowed the roaming charges and did not invoke the provisions of section 40(a)(ia)of the Act, that in the notice issued u/s. 148 of the Act, the basis of reopening was applicability of section 40(a)(ia)of the Act with regard to roaming charges. Thus, there was no new material before the AO for issuing the notice u/s. 148. He had changed his opinion about application of the provisions of section 40(a)(ia). Reassessing the income of the assessee on such change of opinion is not permissible under the Act. The issue of roaming charges was deliberated upon during the original assessment, so, without bringing something new on record the AO should not have issued the reassessment notice. Cases relied upon by the FAA also support our views. Considering the above, we hold that the order of the FAA does not suffer from any legal infirmity. So, confirming the same, we di ..... X X X X Extracts X X X X X X X X Extracts X X X X
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