TaxTMI 
TaxTMI 
2018 (1) TMI 1525
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....assessment year (A.Y.) 2005-06. The substantive issue calling for decision is the applicability of Section 40(a)(ia) and (3) read with Section 194C of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). The Revenue urges that the judgment in Palam Gas Service vs. Commissioner of Income Tax, (2017) 81 Taxmann.com 43 (SC), covers the issue in respect of whether the amounts deducted are paid or payable and therefore, the consequent treatment under Section 194C of the Act. The assessee on the other hand in its appeal relies upon CIT(A)'s findings that in the facts of the present case for A.Y. 2005-06, in fact, the tax was not required to be deducted and that in the circumstances, there was no question of applicability of the pro....
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....ieve" per se did not show any tangible material; and, thirdly, the additions made did not relate to any issue of fact or concealment of income, that was a subject matter of the "reasons to believe" under Section 147 of the Act. The assessee's counsel relied upon the judgments reported as Tupperware India vs. Commissioner of Income Tax, 284 CTC 68 Delhi and Bayer Materials Science Pvt. Ltd. vs. Deputy Commissioner of Income Tax, (2016) 382 ITR 333. It is submitted that not furnishing reasons resulted in denial of justice. The record on this aspect no doubt discloses that its requests were not acceded to. At the same time, the Court is of the opinion that there cannot be per se conclusion that failure to furnish reasons would invariably in....
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.... and therefore rejected. The second ground urged was with respect to the lack of "tangible material" to support the reassessment notice. Here the Court notices that the original assessment was completed or framed under Section 143(1) of the Act. Furthermore, the notice under Section 147 of the Act was issued within the four years period. Clearly, the framing of assessment itself does not result in judicial application of mind and an order, as held in Indu Lata Rangwala vs. Deputy Commissioner of Income Tax, (2016) 384 ITR 337. Furthermore, the Court recollects the decision of the Supreme Court in Commissioner of Income Tax vs. Zuari Estate Development and Investment Co. Ltd., (2015) 373 ITR 661 (SC) which clearly states that the filin....
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....ents of the assessee, learned counsel for the Revenue relied upon the decision in the case of N. Govind Raju vs. Income Tax Officer, Ward-8(2), Bangalore, (2015) 377 ITR 243. The Karnataka High Court on that occasion differed with the view of the Bombay High Court and this Court. After expressly citing Jet Airways (supra) and Ranbaxy Laboratories (supra), it was of the view that the insertion of the Explanation in a provision is for a purpose different than the insertion of a proviso. It was stated that any explanation only clarifies the provision and cannot go beyond or against the main provisions of the Act. It was held by the Karnataka High Court in the case of N. Govind Raju (supra) as follows:- "39. Explanation is also differe....
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.... and not the assessee. 41. If there is ambiguity in the main provision of the enactment, it can be clarified by insertion of an Explanation to the said section of the Act. Same has been done in the present case. Section 147 of the Act was interpreted differently by different High Courts, i.e., whether the second part of the section was independent of the first part, or not. To clarify the same, Explanation 3 was inserted by which it has been clarified that the Assessing Officer can assess the income in respect of any issue which has escaped assessment and also 'any other income' (of the second part of section 147) which comes to his notice subsequently during the course of the proceedings under the section. After the insert....
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.... no reasons have been recorded before issuing notice and has come to the notice of the Assessing Officer subsequently during the course of the proceedings, which can be assessed independent of the first part, even when no addition can be made with regard to 'such income', but the notice on the basis of which proceedings have commenced, is found to be valid. 43. In the end it was vehemently argued by the learned counsel for the appellant that the reason to be given under sub-section (2) of section 148 would be the very foundation of the issuance of notice and if it is false or baseless, then everything goes and the structure erected on such foundation would crumble." This Court specifically is of the opinion that the Karn....