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TMI Blog2021 (8) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... s for the purpose of establishing that the subject matter is one and the same and the issue was relatable to the transactions from various countries. If the facts also, it is for the petitioner / assessee to place all such records before the Assessing Officer. Mere reopening of cannot be construed as conclusive. Still, the petitioner would get an opportunity to clarify these aspects and establish that there was no suppression or failure on the part of the assessee to furnish true and full disclosures. However, High Court cannot adjudicate these disputed aspects. Once there is a prima facie reason for reopening of assessment, which is essential under the provisions of Section 147 of the Act, rest of the adjudications are to be completed in all respects by affording opportunity to the assessee concerned. The initiation of proceedings cannot be crippled merely based on certain clarifications. Such clarifications as well as the documents relied upon are to be adjudicated in detail by the Assessing Officer for the purpose of arriving a decision during the course of 147/148 proceedings. This being the factum established, this Court is of the considered opinion that the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cated elaborately by the Assessing Officer and an assessment order was passed. Thus, in the absence of fresh materials on record, the first respondent has no jurisdiction to reopen the assessment. 5. The learned counsel for the petitioner referred the Appellate order passed by the Commissioner of Income Tax (Appeals) [in short 'CIT(A)'] dated 31.01.2018 and drawn the attention of this Court that regarding disallowances with reference to the Assessment Year 2011-12, adjudications were made. The Appellate authority considered those facts and details and made a finding. Against which, the Revenue filed an appeal before the Income Tax Appellate Tribunal [in short 'ITAT'] and the said appeal is pending. This being the factum, the issues adjudicated and pending in appeal cannot be a ground for reopening of assessment under third proviso to Section 147 of the Act. Any matter, which are the subject matter of any appeal, cannot be subjected to reassessment. Thus, the initiation of proceedings under Section 147 is in violation of third proviso to Section 147 of the Act. 6. The learned counsel for the petitioner, reading the reasons, furnishing for reopening of assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ef facts in the Appellate order dated 31.01.2018 is compared with the reasons furnished for reopening of assessment in proceedings dated 12.10.2018. The first reason furnished are as under: 1.The assessee has made payments to Associated Enterprise for shared service/cost sharing expenses. As per Attachment 6B to Form 3CEB, there is an entry for payment of ₹ 3,72,07,000/- to BASF Corporation, USA, but TDS was not made u/s.195. Income escaped ₹ 3,72,07,000/- . 11. Relying on these two facts, the learned Junior Standing counsel contended that the BASF Corporation mentioned in the Appellate order is at Malaysia and the reasons furnished for reopening indicates that there is an entry for payment of ₹ 3,72,07,000/- to BASF Corporation USA, but TDS was not made under Section 195. Income escaped ₹ 3,72,07,000/-. Therefore, those facts before the Appellate authority are no way connected with the reasons furnished for reopening of assessment in proceedings dated 12.10.2018. Both are different and distinct and therefore, the petitioner has to participate in the reassessment proceedings. The learned Junior Standing counsel said that the petitioner has not cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration for the purpose of disposal of the objections and reasons were also recorded. Thus, there is no infirmity. 15. This Court has to consider the scope of third proviso to Section 147 of the Income Tax Act. The third proviso enumerates that Provided also that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. 16. The said Proviso indicates that the Assessing Officer may assess or reassess such income, other than the income involving matters, which are the subject matters of any appeal. Therefore, the Court has to consider the language employed in the third proviso to Section 147 of the Act. The language employed is may . Thus, a discretion is conferred on the authority to scrutinize the records at the time of reopening of any assessment. However, the proviso in other circumstances, the word shall is employed, in view of the fact that third proviso stipulates that the Assessing Officer may assess or reassess, the Act provides discretion to the Assessing Officer to consider va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. The facts of the case as narrated in the Appellate order dated 31.01.2018 would reveal that Assessment u/s.143(3) has been completed for A.Y.2011-12 after disallowing payments made to BASF Malaysia to the extent of ₹ 1,08,78,548/- towards shared legal / administrative services u/s.40(a)(i) for failure to deduct tax at source u/s.195. 20. The difference is that the disallowance of payments related to BASF Malaysia is stated in the appeal and the extent of disallowance is mentioned as ₹ 1,08,78,548/-. However, in the reasons furnished for reopening in proceedings dated 12.10.2018 would state that the income escaped is ₹ 3,72,07,000/-. Therefore, there is a mismatching between the subject dealt with by the Appellate authority as well as the reasons furnished for reopening of assessment. 21. The learned counsel for the petitioner made an attempt to clarify certain transactions for the purpose of establishing that the subject matter is one and the same and the issue was relatable to the transactions from various countries. If the facts also, it is for the petitioner / assessee to place all such records before the Assessing Officer. Mere reopening of cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X
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