TaxTMI 
TaxTMI 
2019 (8) TMI 1067
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....als, phosphoric acids, sulphuric acid etc, in the AY 2010-2011. The return of income was filed on 8th October, 2010 and was, thereafter, revised on 31st March, 2012. The Petitioner was required to file its audited accounts, tax audit report and Form 3CEB, containing details of the international transactions entered into between the Petitioner and its affiliates. These were duly filed with its return. 3. According to the Petitioner, in the audited accounts filed before the AO, it made disclosures in respect of consultancy and management fees paid to Vedanta Resources PLC (VR PLC). This was in the sum of Rs. 23.71 crores. Likewise, in the Form 3CEB, disclosure was made regarding the aforementioned sum paid to VRPLC. Also, in Schedule M and Schedule V of the tax audit report, details of payments made to VR PLC towards long-term incentive plan, management fees and Corporate Guarantee Commission were duly disclosed. Note 4 below the said Schedules reads as under: "4. The Company has accounted for management consultancy fees of Rs. 142,248,300/- equivalent to USD 3 million payable to Non resident Company during the year under review. The Company has submitted that the payment is not i....
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....allenged the said orders of the DCIT (IT), Madurai, in the Madurai bench of the Madras High Court by Writ Petition (MD) Nos. 8269-70/2017. By orders dated 27th April, 2017 and 16th June, 2017, the Madurai Bench of the Madras High Court stayed the recovery of the demand. The said writ petitions are stated to be pending. 11. On the same date that the DCIT (IT) issued the above orders i.e. 31st March, 2017, the impugned notice was issued to the Petitioner by the AO under Section 148 of the Act seeking to reopen the assessment for AY 20102011. The Petitioner states that it received the said notice on 1st April, 2017. 12. It must be noted here that the said notice under Section 148 was issued by the ACIT Circle-1, Panaji, Goa and subsequently, the jurisdiction of the Petitioner came to be transferred to that of the present Respondent in New Delhi. Thereafter, the Respondent issued a notice dated 24th November, 2017, again asking the Petitioner to file its return of income. By a letter dated 1st December, 2017, the Petitioner filed its return of income declaring the income as reported in its revised return filed on 31st March, 2012. 13. The Petitioner then sought and was provided with....
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.... issued in the petition, this Court passed the following order: "W.P. (C) No. 11541/2017 & CM No. 47020/2017 Issue notice returnable on 7th March, 2018. Learned counsel for the petitioner has stated that the issue involved in the two writ petitions before the Madras High Court relates to (i) jurisdiction of the Assessing Officer, who had passed the order under Section 143 (3) of the Income Tax Act, 1961 and (ii) whether the order passed under Section 201/201(A) was passed within the limitation period. The submission is that this is a case of change of opinion and secondly the conditions stipulated in the proviso are not satisfied as the reopening is after four years. It is stated that in the first round the question of international transactions, which would include the transaction recorded in the reasons for reopening, were examined. The question of failure to deduct TDS, cannot be made subject matter of re-assessment, as jurisdictional preconditions are not satisfied. Counter affidavit would be filed within four weeks. Rejoinder, if any, within four weeks after service of the counter affidavit. The respondents would ensure that the original records, including the rec....
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....g counsel for the Revenue on the other hand referred to the decision in Honda SIEL Power Products Limited vs. Deputy Commissioner of Income Tax (2011) SCC OnLine (Del) 804 and urged that merely because the material evidence was embedded which the Assessing Officer could have uncovered but did not, is not a good ground to invalidate a notice for re-assessment. 20. The reasons for reopening of the assessment in the present case, make it clear that what triggered the reopening of the assessment was the order dated 31st March, 2017 passed by the DCIT (IT) Madurai holding the Assessee to be an Assessee in default for not deducting TDS from the above payment made to the VR PLC towards management and consultancy fees. 21. The admitted position is that the proviso to Section 147 of the Act would stand attracted in the present case since the reopening was after four years and after the initial assessment was under Section 143 (3) of the Act. The only question that then arises is whether this was sufficient for the AO to have reason to believe that income had escaped assessment on account of the failure of the Assessee to make a full and true disclosure of all material facts relevant for t....
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....ous." 25. In this context, the following observations in Calcutta Discount Company Ltd. v. ITO (1961) 41 ITR 191 (SC) are also relevant: "The words used are 'omission or failure to disclose fully and truly all material facts necessary for his assessment for that year'. It postulates a duty on every Assessee to disclose fully and truly all material facts necessary for his assessment. What facts are material and necessary for assessment will differ from case to case. In every assessment proceeding, the assessing authority will, for the purpose of computing or determining the proper tax due from an Assessee, require to know all the facts which help him in coming to the correct conclusion. From the primary facts in his possession, whether on disclosure by the Assessee, or discovered by him on the basis of the facts disclosed, or otherwise, the assessing authority has to draw inferences as regards certain other facts; and ultimately, from the primary facts and the further facts inferred from them, the authority has to draw the proper legal inferences, and ascertain on a correct interpretation of the taxing enactment, the proper tax leviable." 26. As far as the decision in Honda Siel....