9911796707
TMI Blog2024 (5) TMI 646X X X X Extracts X X X X X X X X Extracts X X X X ..... illegal, untenable, unsustainable, unreasonable and contrary to the provisions of the Act. 3. Petitioner is a company incorporated under the laws of Cyprus. Petitioner is a tax resident of Cyprus and is an investment holding company. Petitioner company was also registered as Foreign Portfolio Investor ("FPI") with the Securities and Exchange Board of India ("SEBI"). Respondent No. 1 is the Jurisdictional Assessing Officer ("JAO") and Respondent No. 2 is the Commissioner of Income Tax (International Taxation) ["CIT(IT)"], who is required to grant approval under Section 151 of the Act. 4. Assessment of Petitioner for AY 2015-2016 was completed on 30th October 2017 under Section 143 (3) of the Act accepting the return of income as 'Nil'. 5. Petitioner, thereafter, received a notice dated 30th March 2021 under Section 148 of the Act alleging that there were reasons to believe that Petitioner's income chargeable to tax for AY 2015-2016 has escaped assessment within the meaning of Section 147 of the Act. Petitioner was provided the reasons to believe why the tax had escaped assessment. In the reasons to believe, it was alleged that : "i. It is observed from the case records of asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at considering facts of the case, it is found that there is tangible material on the basis of which it is held that the income has escaped assessment and also there was also no change of opinion in the case. By following this, the AO passed the draft assessment order on 31st March 2022 under Section 144C of the Act. It is at that stage Petitioner approached this Court and this Court, by an order dated 4th July 2022 granted ad-interim relief. That order has been continued since then. 7. An affidavit-in-reply through one Namita Patel affirmed on 24th November 2022 has been filed by Respondents opposing the petition. In the affidavit-in-reply the stand as taken in the order on objections, has been taken. 8. Mr. Sharma appearing for Respondents also submitted that the queries raised during the assessment proceedings were not exactly on the issue of non-disclosure of interest on the NCDs and therefore, is no change of opinion. 9. In our view, the notice dated 30th March 2021 issued under Section 148 of the Act, the order dated 27th March 2022 rejecting Petitioner's objections and the draft assessment order dated 31st March 2022, all have to be quashed and set aside. 10. Section 147 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment in NCDs during the year, the issue of holdings in the NCDs and the interest on the NCDs was certainly a subject of consideration of the AO. 15. Mr. Sharma submitted that there is no discussion in the assessment order. As held by this Court in Aroni Commercials Limited v. Deputy Commissioner of Income Tax-2(1) (2014) 44 taxmann.com 304 (Bombay)., once a query is raised during the assessment proceedings and Assessee has replied to it, it follows that the query raised was a subject of consideration of the AO while completing the assessment. It is also not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Therefore, the reopening of the assessment, in our view, is merely on the basis of change of opinion of the AO from that held earlier during the course of assessment proceedings and this change of opinion does not constitute justification and/or reason to believe that income chargeable to tax has escaped assessment. Paragraph 14 of Aroni Commercials Limited (supra) reads as under : "14. We find that during the assessment proceedings the petitioner had by a letter dated 9 July 2010 pointed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the objection now raised in the grounds for issuing notice under Section 148 of the Act, during the original assessment proceedings. There can be no doubt in the present facts as evidenced by a letter dated 8 September 2012 the very issue of taxability of sale of shares under the head capital gain or the head profits and gains from business was a subject matter of consideration by the Assessing Officer during the original assessment proceedings leading to an order dated 12 October 2010. It would therefore, follow that the reopening of the assessment by impugned notice dated 28 March 2013 is merely on the basis of change of opinion of the Assessing Officer from that held earlier during the course of assessment proceeding leading to the order dated 12 October 2010. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment." 16. Therefore, it is clear that the reopening of assessment by the impugned notice dated 30th March 2021 is merely on the basis of change of opinion of the AO from that held earlier during the course of assessment proceeding leading to the order dated 30th October 2017. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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