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TMI Blog2022 (1) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... 'The said Act') by respondent No.1 seeking to reopen the assessment for the Assessment Year 2013-14 and the order dated 18th October 2019 disposing of the objections raised by petitioner. 3. Petitioner is engaged in the business of providing comprehensive information technology solutions to banks and other financial institutions worldwide. Petitioner develops and markets software products and operates in primarily in two business segments : (i) Products and (ii) Services. Under the product business, petitioner markets its package application software and derives revenue from license fee, customization fee and annual maintenance charges. Under the Service business, petitioner provides services to customers which includes IT solutions and consulting and professional services according to customer's requirements and standards. 4. Petitioner has subsidiaries in different countries, who function as a value added distributors and market/distribute software products and services in their respective jurisdictions. 5. Each of the subsidiaries scout for potential customers, negotiate the terms of sale and enter into contracts with them for selling petitioner's products and ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve a report/order dated 20th September 2016. 11. An Assessment order came to be passed on 27th February 2017. More than four years after relevant assessment year, petitioner received the impugned notice dated 6th March 2019 under section 148 of the Act. Petitioner also received by a communication dated 31st May 2019, the reasons for reopening the assessment. Paragraph Nos. 2, 3, 4, 5 and 6 of the reasons read as under : 2. It is found from Note 31 (expenditure in foreign currency) of the Financial Statements for A.Y. 2013-14 of the assessee company that the assessee has debited a amount of Rs. 655.277 Crores as 'Employees Costs'. 3. It is pertinent to mention here that in A.Y. 2015-16, an amount of Rs. 693.406 Crore is debited as employee cost. Out of total employee cost of Rs. 693.406 Crore, a sum of Rs. 626.416 Crore (90.33% of 693.406) has been disallowed u/s. 40(a)(i) of the Act as per various Double Taxation Avoidance Agreements (DTAAs) for non-deduction of TDS u/s. 195 of the Act in assessment order u/s. 143(3) of the Act. This amount of Rs. 626.416 crore is termed as 'reimbursement of the employee salary and related expenses' as per submission made by the assessee compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of expenses without any markup, and these expenses were incurred during the course of business activity of the Indian company for earning income from the sources situated outside India and there was no service made available to the Indian company due to the fact that the service was actually rendered by the Indian company were rejected. The second ground is that the issue in question here, as noted in the reasons, was neither discussed nor considered and examined by way of any questionnaire, order-sheet noting an assessee's submission during the original assessment proceedings and the Assessing Officer has not given any opinion on the issue and hence it does not involve change of opinion. 13. Shri Shrivastava straightaway went to deal with the second point raised, non-consideration of the issue in the original assessment proceedings and submitted that the Assessing Officer who has formed an opinion to reopen the assessment is not correct. 14. We also agree with Shri Shrivastava. If one considers the communication dated 6th December 2016, copy whereof is at Exh. 'E' to the petition, from petitioner to the Deputy Commissioner of Income Tax 13(1)(1), item 8 therein refers to detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in the active consideration before the Assessing Officer. 17. Shri Sharma was right in stating that this issue has not been discussed specifically in assessment order. But it is settled, law as held in Aroni Commercials Ltd. Vs. Deputy Commissioner of Income-Tax-2(1) [2014] 44 taxmann.com 304 (Bombay), once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. 18. In view of the above, we are satisfied that it is nothing but a change of opinion on the part of the new Assessing Officer, who issued the notice under section 148 of the Act. Change of opinion does not constitute justification and/or reasons to believe income chargeable to tax has escaped assessment. 19. Shri Sharma also submitted that during the scrutiny for the Assessment Year 2015-16, the Assessing Officer had rejected petitioner's contention as made and recorded in the reasons. We are not going into the merits o ..... 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