9911796707
TMI Blog2021 (8) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... turn of income, the petitioner had claimed a deduction of Rs. 40,16,50,014/- towards business development commission paid by it to its associated enterprise M/s.Sutherland Global Services Inc.USA. 3. The return of income filed by the petitioner was put under scrutiny and an order of assessment was passed by the assessing authority on 31.03.2015 under Section 143(3) read with Section 92CA(4) for the Assessment Year 2011-12. The assessment in all respects were completed. The petitioner had received a notice under Section 148 of the Act on 28.03.2016 for re-opening of assessment. In response, the petitioner affirmed the return of income already filed in vide letter dated 04.05.2016. The petitioner further requested to furnish reasons and the reasons are provided by the respondents for re-opening of assessment in proceedings dated 15.11.2016. The petitioner submitted its objections for re-opening of assessment in vide letter dated 05.12.2016 and the said objections were rejected by the first respondent in order dated 08.12.2016 and the said order is under challenge in the present writ petition. 4. The learned counsel appearing on behalf of the petitioner mainly contended that the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r deduction, the stage of deduction would be while computing the gross total income of the eligible undertaking under Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. All the appeals shall stand disposed of accordingly." 9. With reference to Issue No.3, as raised by the petitioner, the principles are settled in the above judgment and therefore, the very reason for re-opening of assessment is untenable and explicitly shows nonapplication of mind on the part of the respondent. 10. However, perusal of the judgment would reveal that the Hon'ble Supreme Court of India has delivered the said judgment after passing of the impugned order in the present writ petition. 11. The learned Senior Standing counsel appearing on behalf of the respondents disputed the contentions raised on behalf of the petitioner by stating that the writ petition itself is not maintainable as the petitioner would get ample opportunity to put forth their contentions before the assessing authority by participating in the process of reassessment. The grounds raised to assail the disposal of objections are untenable as audit objection is a valid ground for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stances, a constructive interpretation is required, in order to consider the scope of the Act as well as the object sought to be achieved. The sources, through which, the Assessing Officer "has reason to believe" is one aspect of the matter and the Assessing Officer "has reason to believe" is another aspect of the matter. Sources may be numerous and from various factors. However, the Assessing Officer must have "reason to believe" is the pre-condition for invoking of the powers under Section 147 of the Act. Thus, the scope of Section 147 cannot be narrowed down in respect of the sources, through which, the authority "has reason to believe" for re-opening of assessment. Informations, materials, sources may be from and within the department and from outside the department or from third parties. However, if the Assessing Officer received materials and on receipt of the materials, if he has 'reason to believe', that is sufficient for the purpose of re-opening of assessment and mere re-opening would not cause any prejudice to the interest of the assessee. No doubt, it may cause certain inconvenience. However, such inconvenience may not be a ground for quashing of the entire proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 133A would reveal that if any survey is conducted and certain materials are found out, then based on such materials, the audit objections are raised, certainly it should be construed as a material for the purpose of considering re-opening of assessment under Section 147 of the Act, provided such materials are sufficient enough for 'reason to believe'. The scope of Section 133A i.e., power of survey would apparently show that the authorities after entering into any place, and after conducting inspection, found certain materials and raised an objection, the said objections may be a ground for the Assessing Officer to 'reason to believe' for re-opening of assessment. However, if at all the assessee is having contra evidence or materials, it is left open to the assessee to produce all these files and materials at the time of reassessment proceedings. Contrarily, the petitioner cannot merely raise a ground that an audit objection cannot be a source for re-opening of assessment under Section 147/148 of the Income Tax Act. 19. This Court is of an opinion that Section 147, the conditions stipulated for re-opening of assessment as well as the scope of Section 133A ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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