TaxTMI 
TaxTMI 
2021 (1) TMI 788
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.... "(a) quash and set aside the impugned notice at Annexure-A to this petition; (b) pending the admission, hearing and final disposal of this petition, to stay the implementation and operation of the notice at Annexure-A to this petition and stay the further proceedings for the Assessment Year 2011-12; (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition." 2. The subject matter of this writ-application is the impugned notice issued under Section 148 of the Income Tax Act, 1961 (for short, 'the Act 1961') for re-opening of the assessment for the Assessment Year 2011-12 on the ground that the income chargeable to tax ....
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....o its partners, but at the same time, claimed excess deduction of Rs. 57,71,499=00 under Section 10AA of the Act 1961 which was liable to be taxed in the hands of the partners. According to the department, the income of Rs. 57,71,499=00 was required to be taxed in the hands of the partners. According to the Revenue, the writ-applicant, being one of the partners of the firm M/s.Vijya Laxmi Exports, has a share capital of 15 per cent. 7. Having regard to what has been stated above, it is the case of the Revenue that the writ-applicant had received interest on capital of Rs. 1,91,153=00 and Rs. 6,74,572=00 respectively as remuneration from the partnership firm and the said amount had not been offered or disclosed for the purpose of taxation....
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.... 2. Referring to the reasons recorded, it was submitted that in the case of the partners, the Assessing Officer seeks to reopen the assessment on the ground that M/s.Vijya Laxmi Exports has paid Rs. 12,74,351/- as interest on partners capital and Rs. 44,97,148/- as remuneration to its partners but has claimed excess deduction of Rs. 57,71,499/- under section 10AA of the Act. Reference was made to the computation of total income of Vijya Laxmi Exports to point out that interest and remuneration therein is shown as nil, which is also reflected in clause (g) in column No.17 in the statement of particular required to be furnished under Section 44AB of the Act. It was submitted that therefore, the Assessing Officer seeks to reopen the asses....
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.... paid by the firm to its partners. 13. It is further pointed out by Mr.Hemani that the partnership firm, namely Vijya Laxmi Exports, was also selected for scrutiny assessment for the Assessment Year 2011-12 and the Assessing Officer had disallowed the entire claim of deduction of Rs. 86,19,599=00 under Section 10AA while framing the assessment under Section 143(3) of the Act 1961 vide order dated 26th February 2014. The assessment order was carried in appeal before the CIT(A) who, vide order dated 2nd May 2014, deleted the disallowance of Rs. 86,19,599=00 made by the Assessing Officer under Section 10AA of the Act 1961. 14. He would submit that the re-opening is beyond the period of four years from the end of the relevant assessment y....
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....o offer 'interest on capital' and 'remuneration' as income alleged to have been received from the partnership firm, namely M/s.Vijya Laxmi Exports. 20. It is the settled position of law that the condition precedent for the purpose of resorting to re-opening of the assessment is that the Assessing Officer should be satisfied based on some cogent or tangible material, that the case is one of escapement of income chargeable to tax. In the absence of escapement of any income chargeable to tax, it is not open for the department to re-open the case of the assessee. 21. Mr.Hemani is right in his submission that mere incorporation of interest on partners capital and remuneration does not necessarily mean or should be construed....