TaxTMI 
TaxTMI 
2017 (8) TMI 959
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....ise of powers under section 263 of the Income Tax Act, 1960 ['the Act' for short]. 2. Brief facts are as under: Petitioner is a company registered under the Companies Act and is engaged in the business of dealing in computer based training and software development. According to the petitioner, in the process of such business, the petitioner would prepare computer based training programmes and software. Such material often times would have to be translated in local languages other than English. This would incur substantial translation charges. Such charges are borne by the petitioner as part of the agreement with the customer and would be paid directly to the agency in a foreign country. 3. For the assessment year 2011-12, t....
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.... This order the Commissioner seeks to take in revision for which, impugned notice came to be issued. In the notice, the Commissioner indicated the grounds on which, he proposes to revise the order and why he thought that the order of assessment was erroneous and prejudicial to the interest of Revenue. In the notice, he recorded as under: "In this case, the assessee company had not deducted TDS on amount paid to non-resident in respect of translation charges amounting to Rs. 66,10,416/-. As per section 195(1), any person responsible for payment to a non-resident, not being a company, any interest or any other sum chargeable under the provisions of this Act shall at the time of credit of such income to the account of the payee or at ....
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....ioner. The petitioner had avoided deducting tax at source under the certificate of the auditor who had opined that the income did not occur in India since the recipient was not a resident. The service was rendered outside India and the payment is also made outside the country. The Assessing Officer was satisfied about such explanation and therefore, made no addition in the order of assessment. The view of the Assessing Officer, after detailed inquiry, is otherwise also a plausible view. When two views are possible, the Commissioner would not be justified in taking the order of Assessing Officer in revision. In this context, counsel pointed out that in the later year, the Commissioner (Appeals) had accepted the stand of the assessee and dele....
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....us that two views were inherently possible. Counsel also relied on the decision of Division Bench of Punjab and Haryana High Court in case of Commissioner of Income Tax vs. Saluja Exim Ltd. reported in 329 ITR 603 reiterating the legal position that when two views are possible and whereas Assessing Officer had adopted one view, the Commissioner would not be justified in revising such order. 8. On the other hand, learned counsel Mr. Bhatt for the department opposed the petition contending that the Commissioner has merely issued a notice. At this stage, there is no final formation of opinion of his part. Intervention of the Court at this stage therefore, would not be justified. Even otherwise, the Commissioner is well within his rights to ....
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....aspect of the assessment has been made that cannot be the subject matter of the proceedings under section 263. Even in such cases, if the Commissioner of Income Tax finds the conclusion of the Income Tax Officer to be erroneous and prejudicial to the interest of the Revenue, he can certainly have recourse to powers under section 263 subject to a limitation appended thereto. However, the powers under section 263 are not conferred on the Commissioner of Income Tax to direct for making an enquiry on mere suspicion to disturb a completed assessment." 11. Thus, the mere fact that the Assessing Officer carried out inquiries with respect to a certain claim of the assessee by itself would not mean that his order cannot be taken in revision by th....
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....er in India. This explanation was already in statute book when the Assessing Officer passed the order of assessment. It is true that when the payments were actually made, this explanation was not in existence but as being brought into the statute later on with the retrospective effect. What would be the effect of such statutory amendment on an assessee who is making payment to a non-resident would be a question of law. Whether in facts of the case the concept of income deemed to have occurred or arose in India as provided under section 9 of the Act would apply or not would be a relevant question. The Explanation 2 noted above seeks to throw some light on such controversy. Vires of such provision is not challenged before us. 14. In facts ....