AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 1044
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....been directed against the Assessment Order dated 22/11/2012 passed by ADIT Intl. Taxation, Dehradun, for Assessment Year 2004-05 u/s 143(3)/144C(13)/147 of the IT Act. 5. The Assessee on Ground no. 1, challenged the order of the Assessing Officer in reopening the assessment u/s 147 of the Act. Briefly the facts of the case as mentioned in the draft assessment order are that the return of income was filed on 29/10/2004 declaring nil income. The same was processed u/s 143(1) on 24.01.2005. Subsequently, the case was reopened by issue of notice u/s 148 of the IT Act issued on 28.03.2011 requiring the assessee to file its return of income for Assessment Year 2004-05. The assessee filed the letter stating therein that the return filed originally may be treated as return of income in response to notice u/s 148 of the Act. Ld. Counsel for the assessee filed the copy of the reasons recorded for reopening of the assessment for Assessment Year under appeal i.e. 2004-05 the same reads as under:- 1. Name and address of Assessee M/s ULO SYSTEMS LLC Post Box No. 23263, Sarjah, U.A.E. 2. PA/GIR No. AAAC45048F 3. Status Company 4. Assessment Year 2004-05 5. Whether R/NR/NOR Non Res....
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....be brought to tax @ 10% on gross basis. Hence I have reasons to believe that the income to that extend has escaped assessment for A.Y. 2004-05." Sd/- ADIT 28/3/11 5.1 It is well settled law that validity of reassessment shall have to be determined with reference to the reasons recorded. Ld. Counsel for assessee submitted that there were no tangible materials available with the Assessing Officer to form requisite belief regarding escapement of income, reopening u/s 147 of the Act and assessment made u/s 143(3)/147 is without jurisdiction. He has submitted that AO on the basis of the details submitted in the return of income originally has recorded reasons for reopening of the assessment without brining any tangible material subsequently on record against the assessee. Therefore, reopening of the assessment is invalid and bad in law. In support of his contention, he has relied upon decision of the Delhi High Court in the case of CIT vs. Orient Craft Ltd. 354 ITR 536 (Delhi) which is confirmed by Hon'ble Supreme Court by dismissing the SLP of the Department on 20.01.2014, copy of the orders are placed on record. 6. On the other hand, the Ld. DR submitted that AO has mention....
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.... 143(3). We are unable to appreciate what permits the Revenue to assume that somehow the same rigorous standards which are applicable in the interpretation of the expression when it is applied to the reopening of an assessment earlier made under Section 143(3) cannot apply where only an intimation was issued earlier under Section 143(1). It would in effect place an assessee in whose case the return was processed under Section 143(1) in a more vulnerable position than an assessee in whose case there was a full-fledged scrutiny assessment made under Section 143(3). Whether the return is put to scrutiny or is accepted without demur is not a matter which is within the control of assessee; he has no choice in the matter. The other consequence, which is somewhat graver, would be that the entire rigorous procedure involved in reopening an assessment and the burden of proving valid reasons to believe could be circumvented by first accepting the return under Section 143(1) and thereafter issue notices to reopen the assessment. An interpretation which makes a distinction between the meaning and content of the expression "reason to believe" in cases where assessments were framed earlier under....
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....tisfied, i.e., failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Held, allowing the petitions, that the reasons in support of the notices did not in any manner indicate failure on the part of the assessee to fully and truly disclose all material facts necessary for assessment. In fact, the reasons recorded that the original claim for deduction made by the assessee for the assessment year 1998-99 was for Rs. 1.66 crores and the Assessing Officer allowed deduction of only Rs. 1.64 crores while the claim for deduction in the assessment year 1999-2000 was Rs. 2.69 crores and the Assessing Officer allowed deduction of Rs. 2.39 crores. Even if the submission of the department that the examination at the time of assessment of the assessee's disclosure was without the aid of the subsequent decision of the Supreme court and the Department was entitled to re-examine the assessee's accounts in the light of the subsequent demand could be accepted, before a notice to reopen assessment beyond a period of four years from the end of the relevant assessment year can be issued, the condition precedent must be satisfied, i.e. failure o....
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....e was escapement of income 'on going through the return of income' filed by the assessee after he accepted the return u/s 143(1) without scrutiny, and nothing more. There was no new tangible material available with the AO to form his belief that income chargeable to tax as escape assessment. This is nothing but a review of earlier proceedings by the AO which is not permissible under law. There is no whisper in the reasons recorded, of any tangible material which came to the possession of the AO subsequent to the issue of intimation. Therefore, the reopening of the assessment is wholly invalid and bad in law. The issue is squarely covered by Judgment of the Delhi High Court in the case of Orient Craft Ltd. (supra) and others refer to above. 14. In view of the above discussions, we are of the view that reopening of the assessment is illegal and bad in law and liable to be quashed. We accordingly, set aside the order of the authorities below and quash the reopening of the Assessment u/s 147/148 of the IT Act. Resultantly, the entire additions made in the reassessment orders stands deleted. 15. In the result, appeal of the assessee is allowed. Assessment Year 2005-06 16. This appea....
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....h have not been included in the receipts mentioned above. The same have not been offered to tax in India as the sake has been concluded outside India. In this regard, reliance has been placed on, inter-alia, the following rulings. -Mahabir Commercial Co. Ltd. v CIT (86 ITR 417)(SC); -CIT v Mewar Textile Mills Ltd. (91 ITR 542) (SC); -CIT vs. Fried Krupp Industries (128 ITR 27) (Mad); -CIT v Kirloskar Oil Engines Ltd. (135 ITR 762)(Bom); and -ACIT v. Skoda Exports (172 ITR 358)(AP)" As per the TDS certificates enclosed with the return of income it has been observed that the assessee has earned the revenues and tax has been deducted at source. The revenues earned are as follows:- S. No. Name Amount 1. Hyundai Heavy Industries Co. Ltd. 1,65,271/- 2. Yojaka Marine Private Ltd. 3,510,864/- 3. Valentine Maritime (Mauritius) ltd. 4,11,404/- 4. Consortium of VMGL & VML 72,946/- 5. Valentine Maritime Ltd. 32,40,868/- 6. Consortium of VMGL & VML 15,77,307/- 10,07,691/- 7. Valentine Maritime (Mauritius) Ltd. 12,14,452/- 4,23,134/- 8. Valentine Maritime Ltd. 16,41,994/1,76,215/- While filing the return of income, the same has bee....