TaxTMI 
TaxTMI 
2017 (5) TMI 993
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.... was right in law in holding that assumption of jurisdiction under section 148 of the Income tax Act, 1961 was not valid?" 3. The other questions pertain inter alia to the treatment of payments received by the Assessee from the operation and maintenance of power plant projects i.e. whether these receipts were taxable either as business income or as fee for technical services (FTS). In these three appeals, however, the Court proposes to confine its examination to the first question viz., the validity of the assumption of jurisdiction under Section 148 of the Act. 4. Having heard learned counsel for the parties, the Court is satisfied that the said question has, for reasons to follow, to be answered in favour of the Assessee. Resultantly all consequential assessment orders are rendered invalid thus obviating the need to examine the other questions that pertain to the additions made under the consequential assessment orders. The Court however clarifies that the other questions framed in these appeals, and which arise in certain other connected appeals of the Revenue against the Assessee for other AYs are left open to be decided in the other appeals. 5. The Assessee, a company incor....
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....y'." Further, "under Article 13 therefore the fee for technical services does not fit into the nature of receipt the assessee is having." 9. Notwithstanding the above orders, the AO proceeded to reopen the assessments under Section 147 read with 148 of the Act for the three AYs in question, i.e., 1998-1999, 1999-2000 and 2001-2002. The reasons therefor were issued by the AO on 28th March 2005. It was noted inter alia by him therein that in the original assessment orders under Section 143(3) of the Act "no opinion with regard to taxation of these technical services has been formed by the then AO." It was further stated that "the facts relating to the nature of income being fees for technical services have never been brought to the notice of the AO." 10. The Assessee objected to the reopening inter alia on the ground that it was based on mere 'change of opinion'. Its objections were rejected by an order dated 9th September, 2005. 11. The reassessments were completed by treating the payments as FTS. The Assessee then carried the matter by way of appeals to the Commissioner of Income Tax (Appeals) [CIT(A)]. By a common order dated 29th December, 2006 passed in the appeals pertaining....
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....l Kaushik, learned Senior Standing Counsel for the Revenue and Mr. M.S. Syali, learned Senior Counsel for the Assessee. The Court has also perused the notices/questionnaires issued by the AO in the course of the assessment proceedings and the replies thereto by the Assessee. The Court has also perused the original assessment orders passed under Section 143(3) of the Act and the reasons for the reopening of the assessments. 15. The main plank of the submission of the Revenue before the CIT(A), which has been adverted to by the ITAT in the impugned order, is the decision of the DB of this Court in Consolidated Photo and Finvest Ltd. v. Assistant Commissioner of Income-Tax (supra). In particular, reliance is placed on the following observations: "19.....The argument that the proposed reopening of assessment was based only upon a change of opinion has not impressed us. The assessment order did not admittedly address itself to the question which the assessing officer proposes to examine in the course of reassessment proceedings. The submission of Mr. Vohra that even when the order of assessment did not record any explicit opinion on the aspects now sought to be examined, it must be pr....
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....rt in CIT v. Usha International Ltd. (supra), specifically overruled the decision of the DB in Consolidated Photo and Finvest Ltd. v. Assistant Commissioner of Income-Tax(supra). Even prior thereto, in KLM Royal Dutch Airlines v. ADIT [2007] 292 ITR 49, another DB of this Court noticed the anomaly that had resulted from the decision in Consolidated Photo and Finvest Ltd. v. Assistant Commissioner of Income-Tax (supra), which was contrary to other decisions, including the decision of the FB in CIT v. Kelvinator of India Ltd.(supra). This was noticed by the DB in KLM Royal Dutch Airlines v. ADIT (supra) where it observed: "16. The Full Bench of this Court in Commissioner of Income-Tax v. Kelvinator of India Ltd. [2002] 256 ITR 1 had opined that the amendments introduced into Section 147 with effect from 1.4.1989 have not altered the position that a mere change of opinion of the AO was not sufficient ground for embarking on a reassessment. Calcutta Discount was duly considered and applied by the Full Bench. The Full Bench further observed that an order of assessment must be presumed to have been passed by the AO concerned after due and proper application of mind. In these circumstanc....