TaxTMI 
TaxTMI 
2018 (9) TMI 352
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....Denmark. Petitioner is engaged in the business of distribution of market products in relation to diabetes care, growth disorders and homeostasis and providing administrative and co-ordination services to its group companies. 3. For the Assessment Year 2006-07, the petitioner filed returns of tax on 29.11.2006 which was processed under Section 143(1) of the Act on 11.9.2007. The case of the petitioner was selected for detailed scrutiny and notice under Section 143(2) was issued on 23.10.2007, to which the petitioner filed requisite reply. Reference was also made with the prior approval of respondent No.2 to the Transfer Pricing Officer under Section 92CA(1) of the Act for determination of arm's length price in respect of international transactions reported by the petitioner during the subject Assessment year. TPO passed a detailed order under Section 92CA(3) of the Act accepting the arm's length price reported by the petitioner in respect of its international transactions and concluded that no adjustment was required in respect of the same. Pursuant to which respondent No.1 passed order u/s 143(3) of the Act inter alia accepting the conclusions of the TPO. It appears after lapse of....
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....ransactions to be computed in accordance with the Arms Length price. It is made clear that if an international transaction is not reported by the assessee, such transaction never gets benchmarked against Arms Length price. In such cases, non reporting of international transactions has to be based upon presumption of escapement of income, non filing of report or otherwise by not including such transaction in the report mentioned in Section 92E would be considered as a case of deemed escapement of income and can be re-opened under Section 147 of the Act with effect from 1.7.2012 which is not applicable to the present facts of the case which relates to the AY 2006-07 concluded on 15.12.2009. 7. It is further submitted that the allegation made by the Authorities are without any valid basis. The report required under Section 92E was furnished with the details of ledger extract for purchases from the companies attracting international transaction and the copies of which are made available before this Court as annexures to the writ petition. Thus, it is submitted that even on the merit as well as for want of statutory requirements, the impugned notices and order are liable to be quashed.....
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....ous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed. S. 147. Income escaping assessment. 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): S. 148. Issue of notice where income has escaped assessment. (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a r....
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....s recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or the Chief Commissioner or the Principal Commissioner or the Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself." 12. On perusal of these provisions, it is significant to analyze the reasons for invoking the provisions of Section 147 which would go to the root of the matter. It is the statutory requirement to bring forth the case of the escaped assessment particularly with reference to Section 149(1)(b) which contemplates about the escaped assessment amounts to or is likely to amount to One Lakh Rupees or more if the time limit has elapsed 4 years but not more than 6 years. It is not in dispute that the present case falls under the said provision. It is also not in dispute that the reasons assigned by the respondent No.1 for invoking Section 147 of the Act do not specify that the escaped assessment amounts to or is li....