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TMI Blog2024 (12) TMI 1178X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the Impugned Show Cause Notice dated 10.01.2022. Also petitioner has not cooperated with the respondents Department by furnishing the required informations. Therefore, on this count also there is no basis on which, the Impugned Notices/Communications can be quashed. Department are empowered to pass the Assessment Orders based on best judgment method under Section 144 of the Income Tax Act, 1961 in absence of proper informations by the petitioner to the above communications calling upon the petitioner to furnish the required informations/documents. Under these circumstances, these Writ Petitions are liable to be dismissed and are accordingly dismissed. The respondents are directed to complete the assessment preferably, within a period of 3 months from the date of receipt of a copy of this order or such other extended period that may be required subject to the petitioner filing its reply objections, if any, to the Show Cause Notice. - Honourable Mr. Justice C. Saravanan For the Petitioner : Mr.Nishant Thakkar, Ms.Jasmin Amalsadvala and Mr.R.Venkatanarayanan for M/s.Subbaraya Aiyar Padmanabhan Ramamani For the Respondents : Mr.B.Ramanakumar Senior Standing Counsel and Mr.Prabhu M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e initiated against M/s.Sanmina-SCI India Private Limited (SIPL) under Section 201 of the Income Tax Act, 1961. 7. It is the case of the petitioner that the aforesaid proceedings initiated against M/s.Sanmina-SCI India Private Limited (SIPL) were eventually dropped for the alleged failure to deduct tax while paying such consideration to the petitioner. 8. Counter-affidavit has been filed by the Department, it has been confirmed that the proceedings that were initiated against the purchasing company has been dropped. Para 4 of the counter-affidavit has been stated as follows:- 4. Without prejudice to the above contentions and before adverting to the averments of the petitioner, the petitioner herein, namely M/s.Sanmina-SCI Systems Singapore Pte Limited is a company incorporated in Singapore and a tax resident of singapore. Its Permanent Account No.AAQCS55868C and assessed to income tax within the jurisdiction of the Assistant/Deputy Commissioner of Income Tax (International Taxation) Circle 2(2), Chennai. During the Financial Year 2015-16 relevant to the Assessment Year 2016- 2017, the petitioner had sold 8,57,29,304 shares in Sanmina- SCI Technology India Private Limited to Sanmina ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as required u/s 129 of the Income Tax Act, a fresh opportunity of hearing is accorded to you subsequent to the above notice. Consequent to the return filed for the above AY, the reasons for re-opening of assessment are communicated to you as under: the remitter claims to have not deducted TDS, relying on th only criteria that since the Assessee is a tax resident of Singapore and as per India Singapore DTAA, capital gains arising is only taxable in Singapore. Firstly the same is true only if the conditions as set forth in the limitations of benefit clause are satisfied. However, the remitter has failed to furnish any evidence in support of the same. Secondly in the valuation relied on by the remitter for fair market valuation of the shares from EY. It is seen as under ... EY has been engaged to perform fair market valuation of equity shares of STIPL (Sanmina Technology India Private Limited) has been engaged to perform fair valuation of equity shares of STIPL for internal management analysis an also for filing the valuation report with RBI/Authorized Dealers. And the scope of work is mentioned as under: The scope of our services is to perform the valuation of equity shares of STIPL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration received by the assessee towards buyback of the shares also comprises of Long Term Capital Gain. The surplus portion which is consideration over and above the fair market valuation of the shares is to be taxed in the hands of the assessee. Therefore, on account of the above, I have reason to believe that income of Rs.64,97,75,300/- has escaped assessment within the meaning of Section 147 and the assessee has failed to fully and truly disclose all material facts for the correct assessment of income for AY 2016-17. The assessee has filed the return of income for AY 2016- 17 on 14.10.2016 but has shown the amount of Rs.131,16,58,351/- as long term capital gains and claimed exemption from tax as per India Singapore DTAA. However, as detailed above there is sufficient reason to believe that the remittance also contains excess amount paid over and above the fair market value of shares. In this regard an opportunity of being heard is accorded to furnish your objections, if any, as laid down in the case of GKN Driveshafts (India) Ltd. Vs. ITO, (2003) 259 ITR 19 (SC), latest by 22.11.2021. Your objections may please be forwarded to the email id:[email protected] (wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for completing the assessment would be getting barred by limitation on 31.03.2022 . 17. The petitioner has also replied on 04.02.2022 stating that the petitioner Company was still in the process of deliberating on the way forward and prays for additional time of one week. Thereafter, a Show Cause Notice was also been issued on 04.02.2022 to the petitioner to show cause as to why the assessment should not be completed for the material period based on the available record if the petitioner fails to submit the required information by 08.02.2022 . 18. The petitioner further sought for additional time by its Representation dated 08.02.2022 and has thereafter proceeded to file the present writ petitions on 10.02.2022 raising grounds. 19. The case of the petitioner is that there were no jurisdictional fact that are available for reopening the assessment, as is evident from the reasons furnished by the respondents for re-opening the assessment in the annexure attached to their response dated 15.11.2021 . It is submitted that the shares of the purchasing company namely Sanmina-SCI India Private Limited has been valued to arrive at a incorrect conclusion for income assessment by invoking R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 10(34A) of the Income Tax Act, 1961. He would also contend that the Impugned Scrutiny Notice dated 15.11.2021 issued under Section 143(2) of the Income Tax Act, 1961, cannot be sustained since it has been issued without consideration of the objections raised by the petitioner. 25. Finally, the learned counsel for the petitioner has also submitted that no approval, as is contemplated under Section 151 of the Income Tax Act, 1961 has been obtained and therefore on this count also the impugned proceedings are liable to be dropped. In support of the case, the petitioner has placed the following decisions:- (i) Cognizant Technology Solutions Pvt Ltd Vs. Deputy Commissioner of Income Tax in W.P.No.32752 of 2017; (ii) Mohanlal Champalal Jain Vs. Income Tax Officer, Ward 1(2), Thane reported in 2019 102 taxmann.com 293 (Bombay); (iii) Income Tax Officer, Ward 1(2) Vs. Mohanlal Charmpalal Jain reported in 2019 11 taxmann.com 67 (SC); (iv) Akshar Builders Developers Vs. Assistant Commissioner of Income Tax 28(1), Mumbai reported in 2019 103 taxmann.com 162 (Bombay) and (v) Ankita A. Choksey Vs. Income Tax Officer 19 (1) (1) Others in W.P.No.3344 of 2018. 26. Arguing the case on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arguments advanced by the learned counsel for the petitioner and the learned Senior Standing Counsel for the respondents. 34. A reading of the reasons communicated vide Communication/Impugned Scrutiny Notice dated 15.11.2021 under Section 143(2) of the Income Tax Act, 1961 is impugned in W.P.No.3528 of 2022 makes it clear that there were sufficient reasons for reopening of the assessment under Section 148 read with Section 147 of the Income Tax Act, 1961 as it stood on 01.04.2021 . 35. That apart, the petitioner has suffered Speaking Order dated 30.12.2021 . Therefore, there is no justification in challenging the Impugned Notice dated 31.03.2021 issued under Section 148 of the Income Tax Act, 1961 and the Impugned Communication/Impugned Scrutiny Notice dated 15.11.2021 giving reasons for reopening the assessment and the Impugned Show Cause Notice dated 10.01.2022 . 36. That apart, the petitioner has not cooperated with the respondents Department by furnishing the required informations. Therefore, on this count also there is no basis on which, the Impugned Notices/Communications can be quashed. 37. In fact, the respondents Department are empowered to pass the Assessment Orders based ..... X X X X Extracts X X X X X X X X Extracts X X X X
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