AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2012 (12) TMI 874
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....blasting contents of the plant and machinery along with building which are being installed by its clients. This activity of testing was mainly supervised and controlled by the guidelines issued by Bhabha Automatic Research Centre (BARC) as it involves the use of radio active material. b) On 21/10/2007 the petitioner filed its return of income for assessment year 2007-08 declaring a total income of Rs.7.06 lacs. Thereafter, notice under Section 143(3) of the Act was issued to the petitioner by the Assessing officer. During the course of assessment proceedings the Assessing officer found that the labour charges and radiography charges which were debited as expenses by the petitioner had not suffered tax deduction at source. Consequently, the petitioner was called upon to explain why the radiography and labour charges paid by them and debited as expenses should not be disallowed under Section 40(a)(ia) of the Act while computing its profits. c) In response to the above query, the petitioner submitted complete details of radiography and labour charges paid by it indicating the name and address of the recipients. The petitioner inter alia pointed ....
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.... 11.12.2009 assessing total income at Rs.12,05,020/- after disallowing contract payments made in excess of Rs.50,000/- during the year. On verification, it is noticed that the payments towards RADIOGRAPHY CHARGES AND LABOUR CHARGES, are in the nature of contract payments and disallowed these expenses as per the provisions of Section 40(a) (ia) vide order dated 11.12.2000 and the items considered for dis-allowance are payments made in excess of Rs.50,000/- in the relevant financial year. These payments would actually fall under the head "Fees for Professional or Technical Services" and accordingly all the payments made in excess of Rs.20,000/- are liable for deduction of tax at source. Therefore, the total dis-allowance as per the provisions of Section 40(a)(ia) of the Act, 1961 are Rs.94,93,977/- instead of Rs.4,08,433/-. Therefore, I have reasons to believe that income to the tune of Rs.90,84,844/- has escaped assessment for the A.Y.2007-08". f) By letters dated 23/8/2012 and 4/10/2012 the petitioner objected to the reopening of the assessment under Section 147 and 148 of th....
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.... the provisions of Section 194J and 194C. Thus, for the purposes of Chapter XVII-B, the threshold limit of Rs.20,000/- would be applicable instead of Rs.50,000/-. d) As no TDS was deducted from the payments which exceeded the threshold limit of Rs.20,000/- the expenses were liable for disallowance u/s.40 (a)(ia) of the I.T. Act. e) At no stage of the earlier assessment proceedings you established the fact that the payees were not qualified professional. Even in the present proceedings you have failed to establish the same with documentary evidence; f) The leniency sought by you, in light of death of one of the partners, even though unfortunate, is irrelevant to the present proceedings; g) The above facts were not considered by the then A.O. Thus leading to escapement and under assessment of income by Rs.1,12,46,012. 3) In view of the above facts, I am convinced that the reopened assessment proceedings, for A.Y.2007-08 are valid and the notice issued u/s.148 is in accordance with the provisions of law. Hence, your objection to the present proceedings u/s.147 and that in respect of issue of notice u/s. 1....
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....Officer at the instance of the internal audit report and not on independent application of mind on the part of the Assessing Officer. In support she invites our attention to the affidavit in reply and in particular letter dated 14/3/2012 addressed by the Assessing officer to the Joint Commissioner for approval to reopen assessment. In the aforesaid letter seeking sanction to reopen assessment, mention is made of objection raised by the internal audit department. This is clearly not permissible. In view of the above, the petition be allowed and the impugned notice be quashed and set aside. 5) As against the above, Mr. Arvind Pinto, Counsel appearing for the revenue submits as under: a) The impugned notice has been issued within four years from the end of the relevant assessment year and therefore, cannot be faulted; b) The reopening of the assessment by a notice dated 20/3/2012 under Section 148 of the Act is valid and proper as income had escaped assessment for the assessment year 2007- 08 inasmuch as the petitioner had claimed deduction of payment made on account of labour charges and radiography charges without having disclosed the fact th....
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....as power to reassess. But reassessment is to be based of fulfillment of certain preconditions and if the concept of 'change of opinion' is removed as contended by the department then in the garb of reopening of assessment review would take place". The aforesaid observation of the Apex court make it clear that sanctity must be attached to the assessment orders and it cannot be disturbed merely on account of change of opinion. This sanctity to assessment orders is not based on the basis of the time that has lapsed from the assessment order passed in the regular proceedings to the issue of notice for reopening an assessment. 7) Therefore, where all material facts necessary for determination of the income have been disclosed by the assessee and the Assessing officer has taken a particular view on those disclosed facts as reflected in the Assessment order passed in regular proceedings, then without anything more, it would not be open to reopen those assessment proceedings. For in such a case it is a clear case of change of opinion. In the present facts it is very clear that during the assessment proceedings leading to the assessment order dated 11/11/2009 the petitioner had disclosed ....