AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (12) TMI 229
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.... the assessment previously framed on a scrutiny for the assessment year 2004-05. The petitioner has also challenged the order dated 11.10.2011, by which the petitioner's objections to such reopening of the assessment came to be disposed of. Brief facts are as follows: For the assessment year 2004-05, the assessee filed its return of income along with necessary documents including Auditors Reports in prescribed forms. Such return was taken in scrutiny assessment under section 143(3) of the Act. Such assessment previously framed after scrutiny was sought to be reopened by notice dated 28.10.09 on the ground that book profit under section 115JB of the Act was not computed correctly and further that excess deduction unde....
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.... the hands of the remitter. It is seen from the assessment records of the assessee company that the company has made following international transactions with associated enterprises: A.Y. Particulars of Expenditure Amount in Rs. 2004-05 Payment for Product registration services availed 51,94,204 The assessee was liable to deduct TDS on these expenditures as per income tax Act. Failure to deduct TDS attracted the provisions of section 40(a)(i). So, the expenditure of Rs.51,94,204/- was required to be disallowed and added to total income. By not disallowing this amount while making computation of taxable income the assessee has failed to disclose fully and truly all material facts necessary for his assessment for this assessment year.....
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....ch the Apex Court upheld the the decision of the High Court in which the High Court had quashed the reopening proceedings wherein apart from the information furnished by the audit party, the Income Tax Officer had no other information for reopening the assessment. (ii) Agricultural Produce Market Committee v. ITO, (2011) 15 Taxmann.com. 170(Gujarat) wherein Division Bench of this Court was pleased to quash the notice for reopening where the only basis was the revenue audit objection as regards the eligibility of the assessee for exemption. (iii) Adani Exports v. Deputy C.I.T., 240 ITR 224 wherein Division Bench of this Court held as under: "It is true that satisfaction of the assessing officer for the purpose of reop....
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....essment was not erroneous and so far as he was concerned, he did not believe at any time that income has escaped assessment on account of erroneous computation of benefit u/s 80HHC. He has been consistent in his submission of his report to the superior officers. The mere fact that as a subordinate officer he added the suggestion that if his view is not accepted, remedial actions may be taken cannot be said to be belief held by him. He has no authority to surrender or abdicate his function to his superiors, nor the superiors can arrogate to themselves authority. It needs hardly to be stated that in such circumstances conclusion is irresistible that thebelief that income has escaped assessment was not held at all by the officer having jurisdi....
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....put forth by both sides. This is so, because on the available material on record, we are inclined to hold that the Assessing Officer could not have reopened the assessment by issuing the impugned notice. The petitioner has been contending that the Assessing Officer had no independent reason to hold a belief that income chargeable to tax has escaped assessment. It is only at the insistence of the audit party that he had issued notice for reopening. In the petition, it is averred that "the issue on which the case of the petitioner has been reopened is based on the objection raised by the audit party. It is a matter of record that the Audit Party had raised an objection in regard to non deduction of tax under section 195 of the Income-....
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....the assessee she stated as under: "In view of the above explanation, there was no under assessment in the assessee company's case in both the assessment years i.e. A.Y.2004-05 & A.Y. 2005-06. Further, basis requirement of deducting tax u/s.195 is that whether payment of sum to an non-resident is chargeable to tax under the provisions of the Act or not. TDS liability u/s.195 arises only when income is credited to account of payee or on actual payment of same. Therefore, as the above mentioned expenditure is in the nature of reimbursement of expenses no TDS is required to be deducted in view of Board's circular No.715 dt. Aug 8,1995." Under the circumstances, it clearly emerges from the record that the Assessing Office....