TaxTMI 
TaxTMI 
2014 (10) TMI 40
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....e first proviso to Section 147 of the said Act would be applicable. Section 147 and the first proviso thereto as well as Explanation 1 after the provisos read as under:- "147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a r....
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....ents cited by the learned counsel for the petitioner. She also contended that all the ingredients necessary for invoking the provisions of Section 147 and, particularly, the proviso thereto have been satisfied and the re-opening of assessment is valid in law. She placed reliance on three decisions of this court in the case of CIT v. Usha International Ltd.: 348 ITR 485 (del), M/s OPG Metals & Finsec Ltd. V. CIT, W.P.(C) No. 8283/2010 decided on 30.08.2013 and Meinhardt Singapore Pte Ltd. V. ADIT: (2013) 212 Taxman 637. 5. Before we examine the rival submissions made by the learned counsel for the parties, it would be appropriate if we set out the relevant facts. As pointed out above, the assessment was completed by virtue of the assessment order under Section 143(3) on 04.03.2005. The notice under Section 148 was issued on 30.03.2009. By a letter dated 16.04.2009, the petitioner / assessee requested for the reasons for believing that income had escaped assessment. The reasons were subsequently supplied on 28.05.2009. The reasons read as under:- "Reasons for reopening the case u/s 147 of I.Tax Act in the case of M/s Oracle India Pvt. Ltd. in A.Y. 2002-03. In this case, return dec....
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...."9. Particulars in respect of transactions in intangible property. Has the assessee entered into any international Transaction(s) in respect of purchase/sale/use of Intangible property such as know-how, patents, copyrights, licenses, etc ? If "yes" provide the following details in respect of each associated enterprise and each category of intangible property: (a) Name and address of the associated enterprise with whom the international transaction has been entered into. (b) Description of intangible property and nature of transaction. (c) Amount paid/received or payable/receivable for purchase/sale/use of each category of intangible property. (i) As per books of account. (ii) As computed by the assessee having regard to the arm"s length price. (d) Method used for determining the arm"s Length price [See Section 92C (1)]" The aforesaid Form No. 3CEB particulars that were filled in by the petitioner / assessee were as under:- "9. Particulars in respect of transactions in intangible property. Has the assessee entered into any international Transaction(s) in respect of purchase/sale/use of Intangible property such as know-how, patents, copyrights, licenses, etc ? Yes If "ye....
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....ublished Price of software replicated and distributed in India. The assessee further stated that the India Exchange Control laws prevailing at the time of the agreement entered into and those applicable in the subject assessment year provide that Indian Software reproducers such as assessee company are permitted to remit upto 30% of the Indian published price to overseas copy right holders i.e. Oracle Corp, USA in this case. The assessee also produced copy of approval issued the Reserve Bank of India for payment of royalty read in conjunction with ADMA Circular No.6 dated March 10, 1993 permitting remittance of royalty. The assessee has treated the royalty expenditure as revenue in nature which has been incurred wholly and exclusively for the purpose of company's business, the same is allowable ü/s 37 of the I.T.Act. The reply filed by the assessee was examined and it has been found that this issue is squarely covered and discussed elaborately in assesses own case for the Asstt. Year 1999-2000. The addition on the similar issue also made in Asstt. Year 2000-01& 2001-2002. It may also be mentioned that the CIT(A) in appeal has upheld the addition on this account. In view o....
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....the material facts were fully and truly disclosed is not correct. xxxx xxxx xxxx xxxx" Finally the Assessing Officer rejected the objections and directed the assessee to comply with the notice under Section 143(2) and 141(1) of the said Act issued for reassessment. It is at this stage that the present writ petition was filed and this court at the interim stage stayed further proceedings. 9. The position in law has been clearly spelt out in Haryana Acrylic Manufacturing Company (supra) as under:- "29. In the reasons supplied to the petitioner, there is no whisper, what to speak of any allegation, that the petitioner had failed to disclose fully and truly all material facts necessary for assessment and that because of this failure there has been an escapement of income chargeable to tax. Merely having a reason to believe that income had escaped assessment, is not sufficient to reopen assessments beyond the four year period indicated above. The escapement of income from assessment must also be occasioned by the failure on the part of the assessee to disclose material facts, fully and truly. This is a necessary condition for overcoming the bar set up by the proviso to section 147. ....
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....t or facts was/were not disclosed by the petitioner in the course of its original assessment under Section 143(3) of the said Act." (underlining added) Similarly, in the Bombay High Court decision it has been held that merely making a bald assertion that the assessee had not made a full and true disclosure of material facts was not sufficient. It must be specifically indicated as to what material fact or facts was/were not disclosed by the petitioner in the course of its original assessment under Section 143(3) of the said Act. 10. The decisions referred to by Mrs Bansal do not in any way detract from this legal position. In Usha International Ltd. (supra) itself, a Full Bench of this court (per majority) clearly noted that there was a distinction between disclosure / declaration of material facts made by the assessee and the effect thereof and the principle of change of opinion. This is stated so in paragraph 24 of the said decision which also indicate that failure to make full and true disclosure of material facts is a pre-condition which should be satisfied if the re-opening is after four years of the end of the relevant assessment year. The court also took note of Explanatio....