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TMI Blog2024 (7) TMI 1047X X X X Extracts X X X X X X X X Extracts X X X X ..... s a fact on record, in the year under consideration, neither the assessee has made remittances to anyone outside India or in India nor deducted any tax at source. Therefore, there is no question of assessee filing any TDS return. This fact has been accepted subsequently by the Assessing Officer while disposing of the objections of the assessee. Thus, the present case stands on identical footing as the case of Cricket South Africa [ 2023 (10) TMI 1318 - ITAT DELHI] as held only requirement to initiate proceedings u/s. 147 is reason to believe which has been recorded above. This case is beyond four years within six years from the end of the assessment year under consideration. Therefore, approval u/s 151(1) of the Act is solicited. AO has reopened the assessment under Section 147 of the Act with complete non-application of mind. Unfortunately, the higher authorities while granting approval under Section 151 of the Act have approached the issue in a mechanical manner without verifying the facts. Approval has to be granted with caution and proper application of mind to the facts and material on record, to prevent to miscarriage of justice as reopening of assessment involves reopening o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ICE PRESIDENT: Captioned appeal has been filed by assessee challenging the final assessment order dated 24.01.2023 passed under Section 147 of the Income-Tax Act,1961 pertaining to assessment year 2013-14, in pursuance to directions of learned Dispute Resolution Panel (DRP). 2. In the Memorandum of Appeal, assessee has raised multiple grounds. However, in ground no.1, assessee has raised a purely legal issue challenging the validity of reopening of assessment under Section 147 of the Act. 3. Briefly, the facts relating to this issue are, assessee is a non- resident corporate entity incorporated in Australia and a tax resident of Australia. For the assessment year under dispute, assessee did not file any return of income under Section 139(1) of the Act. However, based on AIR information available in AIMS module of ITBA, the Assessing Officer noticed that assessee has entered into certain financial transactions aggregating to Rs. 5,11,77,717. Since, the Assessing Officer was of the view that the activities undertaken by assessee are income generating activities, whereas, the assessee has not filed any return of income in India, the Assessing Officer reopened the assessment under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aving jurisdiction over the Assessee DCIT Cir-1(2)(a), Intl. Tax, New Delhi 2. As per NMS information disseminated through AIMS module of ITBA M/s. Cricket Australia (PAN No .AAECC5341D) has not filed ITR during F.Y. 2013-14. 3. As per AIR information, it is noticed that the said assessee has filed TDS return u /s 195 of Rs. 3,19,44,410- and u/s. 194E of Rs. 1,92,33,307/-, but couldn t file ITR onwards. In light of this, the genuineness of financial transaction/business activity of this company could not be ascertained. 4. Thus from the above discussion, it is clear that the incomes during FY 2012-13 has escaped assessment in India as M/s. Cricket Australia has not filed return in India for A.Y. 2013-14. 5. In view of the above, I have reason to believe that the income during the FY 2012-13 relevant to A.Y. 2013-14 has escaped assessment as defined u/s. 147 of the Income-Tax Act, 1961. Accordingly, notice u/s. 148 of the Act may be issued in this case. 6. In this case, the only requirement to initiate proceedings u/s. 147 is reason to believe which has been recorded above. This case is beyond four years within six years from the end of the assessment year under consideration. There ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve discussion, it is clear that the incomes during FY 2012-13 has escaped assessment in India as M/s. Cricket Australia has not filed return in India for A.Y. 2013-14. 5. In view of the above, I have reason to believe that the income during the FY 2012-13 relevant to A.Y. 2013-14 has escaped assessment as defined u/s. 147 of the Income-Tax Act, 1961. Accordingly, notice u/s. 148 of the Act may be issued in this case. 6. In this case, the only requirement to initiate proceedings u/s. 147 is reason to believe which has been recorded above. This case is beyond four years within six years from the end of the assessment year under consideration. Therefore, approval u/s 151(1) of the Act is solicited. Accordingly, put for your kind perusal and approval please. Sd/- Dy.Commissioner of Income Tax C ircle-1(2)(1), Intl. Tax, New Delhi 9. On going through the reasons recorded, we are of the view that they are replete with various factors misstatement/inaccuracy and silly mistakes, though, the Assessing Officer has reopened the assessment for assessment year 2013-14, however, the heading of the reasons recorded refers to assessment year 2014-15. Even, the name of the assessee has been. In a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be verified . However, the Assessing Officer had inadvertently written that the assessee had filed TDS return during the year, instead of writing that the assessee had received incomes on which TDS had been deducted by the remitters, as evident from the TDS returns filed by them. [Emphasis by us] 11. Thus, facts on record clearly reveal that the Assessing Officer has reopened the assessment under Section 147 of the Act with complete non-application of mind. Unfortunately, the higher authorities while granting approval under Section 151 of the Act have approached the issue in a mechanical manner without verifying the facts. The concept of approval under Section 151 of the Act by the higher authorities in the matter of reopening of assessment under Section 147 of the Act is only for the purposes of putting place a system of change and measure so that the Assessing Officer while reopening of assessment under Section 147 of the Act doesn't act in an arbitrary and highhanded manner. Therefore, the burden of proof on the approving authority is honourious as based on the reasons recorded by the Assessing Officer for reopening of assessment, approving authority has to find out whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the objections of the assessee as admitted errors committed by him, it is surprising that learned DRP has fallen in the same error while referring to non-filing of TDS royalty and TDS transaction as the cause for reopening of assessment. As a matter of fact, DRP was set up under the statute as an alternative dispute resolution mechanism for speedy disposal resolution between the assessee and the department in certain areas of taxation. The DRP is constituted by three very senior officers of the department in the rank of Principal CIT/CIT. Therefore, it is expected that when the panel decides the objection raised by the aggrieved assessee, they must decide the issues raised before them by considering both the facts and law. This is so because after directions issued by the DRP, assessee got no further opportunity before the Assessing Officer as the Assessing Officer has to implement the directions of DRP in latter and spirit. However, we have come across several instances where the DRP has failed to discharge its obligation in a proper manner by dealing with the objections of the on merit with valid reasoning. The instant case is a classic example on failure of the DRP to effecti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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