AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 1080
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.... income for A.Y.2016-18 declaring total loss on 27.11.2016 under normal provisions and the booklaws as well. 2.1 The return of the petitioner was processed and his case was selected for scrutiny under CASS. The detailed scrutiny was undertaken and the assessment order under Section 143(3) was passed on 17.12.2019 accepting the returned total loss of the petitioner for A.Y.2016-17 without making any addition or disallowance of any expenses. The respondent issued notice under Section 148 asking the petitioner to file return of income for A.Y.2016-17. The petitioner, without prejudice, filed the return of income in compliance with the notice and sought for the reasons recorded for reopening and approval obtained under Section 151 of the Act. 2.2 The petitioner had been provided with the copy of the reasons and approval on 17.5.2021. In response to the same, the objections were raised on 9.7.2021 challenging the validity of the notice. The respondent disposed of the objections on 10.11.2021. 2.3 The notice impugned dated 21.3.2021 under Section 148 is challenged in the present petition with the following prayers: "7(a) quash and set aside the impugned notice dated 21.....
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....ed to Corporate Social Responsibility referred to in section 135 of the Companies Act shall not be deemed to be an expenditure incurred by the assessee for the purpose of business or profession. Section 37(1) provides for those expenses which are incurred wholly and exclusively for the purpose of the business of the assessee are allowable. On other issues, the objections raised are, according to the respondent, rightly not sustained and the same have been disposed of in accordance with the guidelines laid down by the Apex Court in the case of GKM Driveshaft (India) Ltd V/s ITO(2003) 259 ITR 19 (SC). 2.9 It is also denied that the case of the assessee has been reopened without any independent application of mind by the Assessing Officer. The opinion has been formed on the basis of the correct facts/law and procedural requirement of the Act. All other contentions with regard to the absence of new tangible material and absence of independent opinion have been denied categorically. 3. We have heard learned advocate Mr Bandish Soparkar for the petitioner and learned Senior Standing Counsel Ms Maithili Mehta who represents the respondent. 3.1 According to Mr.Soparkar, the two de....
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....o the assessment completed for AY 2016-17 by the CIT (Audit)/Addl /JCIT(Audit), Ahmedabad? This Circle is having jurisdiction as mentioned in order No PCIT-1/ABD/Order u/s120/01/2020-21 dated 03.09.2020 of Pr CIT-1, Ahmedabad 2 Extract of audit query and all communication between assessing officer and CIT(Audi)/Addl /JCIT(Audit), Ahmedabad including reply if any made by the assessing officer The information sought for under the purview of RTI Act is provided herewith 5. The audit objection raised in the course of audit scrutiny is in relation to computation of income and the assessee has disallowed the donation amount while computing the total income of the relevant assessment year. Again, on going through the computation of income, the audit party had found that the assessee has disallowed the amount of CSR expenses and therefore, the objections were raised as under: "4. In view of the details it is clear that the assessee has only disallowed Rs.1,38,72,567/- (Rs.50,00,000/- + Rs.88,72,567/-) out of CRS expenses instead of disallowing the whole amount of Rs.2,21,68,297/-. Thus, the disallowance is less by Rs.82,95,730/- in computation of total income for A.....
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...., provisions for CSR are not applicable to assessee. 4. In view of the above it is crystal clear that the provisions of Section 135 of the Companies Act is nto applicable to the assessee company. It has incurred the CSR expenses voluntarily. Section 37(1) says that any expenditure (not being expenditure of the nature described in Sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head, "Profits and Gains of Business or Profession of the assessee. In the instant case, the expenses incurred are wholly and exclusively for business purposes and is not in nature of capital expenses or personal nature and hence the same is allowable item of expenses u/s.37 of the Act. 5. In the instant case, since there is no onus or liability of the assessee to spend any expense under Section 135 of the Companies Act, 2013, the CSR provisions are not applicable and consequently Explanation 2 of Section 37 is not applicable. The only test which is to be seen as to whether the item....
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....rcantile system of accounting and yer recognized the revenue only when the services were rendered by the prepaid customers. 12.2 It was the stand of the petitioner that as long as no services were rendered by the assessee to the customers, income cannot be recognized by the assessee. It is only at the time of actual use made of the network of the assessee by the customers that he would be required to render the services. Such issue was threadbare examined by the Assessing Officer and therefore also, it cannot be said that the assessee failed to disclose fully and truly all material facts. 12.3 As far as the second question was concerned, Section 35ABB provides for amortization of license fees paid for operating telecommunication services. Petitioner's claim for the Assessment Year 2008-2009 was disallowed to the extent of Rs 98,29,17,915/- charged to P & L account but one eleventh (1/11th) of which was allowed as deduction for considering the same for amortization. It is the stand of the petitioner that the royalty paid to the Wireless Planning Commission of Government of India is not paid for obtaining the license & this being revenue expenditure & not capital ex....
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.... the auditor in the following manner; GIST OF AUDIT OBJECTION: The assessee-company engaged in the business of manufacturing and job work in electronically engraved copper rollers filed its return of income for assessment year 2004-05 declaring total income of Rs 1,54,66,000/-. The case was taken under scrutiny under Section 143(3) of the Act on 29/12/2006 and scrutiny was completed determining total income of Rs 1,74,89,890/-. The audit has found that the assessee has debited an amount of expenses of Rs 54.07 lakhs in Profit & Loss Account treating it as revenue expenditure However, according to Section 35AB of the Act the assessee was eligible for a deduction of 1/3rd of Rs 54.07 lakhs paid in the previous year on research and development and the balance amount in equal installments immediately in two succeeding previous years for which the working is given below: Total amount spent on R & D Rs 54 07 lakh Less : 1/3rd (eligible deduction) Rs 18 02 lakh Rs 36 05 lakh Thus the allowance of deduction for entire expenditure of Rs 54.07 lakh against Rs 18.02 lakh resulted in an under assessment of income of Rs 36.05 lakh wit....
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.... that the income chargeable to tax has escaped the assessment must fail and such issue is no longer res integra and requires no further elaboration except by reproducing relevant findings of this Court, in the case of Cadila Health Care Ltd Vs Assistant Commissioner of Income Tax & Anr reported in (2012) 65 DRT (Guj ) 385, wherein it is held that any such initiation of reassessment proceedings solely at the instance of the audit objection would not be maintainable "(i) CIT Vs Lucas T V S Ltd (2001) 168 CTR (SC) 311 : (2001) 249 ITR 306 (SC) in which the apex Court upheld the decision of the High Court in which the High Court had quashed the reopening proceedings wherein apart from the information furnished by the audit party, the ITO had no other information for reopening the assessment. (ii) Agricultural Produce Market Committee vs ITO (2011) 63 DTR (Guj ) 7: (2011) 15 Taxmann com 170 (Guj ) wherein Division Bench of this Court was pleased to quash the notice for reopening where the only basis was the revenue audit objection as regards the eligibility of the assessee for exemption. (iii) Adani Exports Vs Dy CIT (1999) 153 CTR (Guj ) 308: (1999) 240 ITR 2....
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....ording under the office note on 8th Feb, 1997 that he has reason to believe is a mere pretense to give validity to the exercise of power In other words, it was a colourable exercise of jurisdiction by the AO by recording reasons for holding a belief which in fact demonstrably he did not held that income of assessee has escaped assessment due to erroneous computation of deduction under Section 80HHC, for the reasons stated by the audit. The reason is not far to seek." 12. Under the circumstances, it clearly emerges from the record that the AO was of the opinion that no part of the income of the assessee has escaped assessment In fact, after the audit party brought the relevant aspects to the notice of the AO, she held correspondence with the assessee. Taking into account the assessee's explanation regarding nonrequirement of TDS collection and ultimately accepted the explanation concluding that in view of the Board's circular, tax was not required to be deducted at source. No income had therefore escaped assessment. Despite such opinion of the AO, when ultimately the impugned notice came to be issued the only conclusion we can reach is that the AO had acted at the behest of....
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....y in the matter before the Apex Court showed that they had pointed out to the Assessing Officer that he failed to apply the provision contained in Section 35. This, according to the Apex Court, would amount to pointing out the law and the interpretation of the provisions contained in Section 35, which is barred by the decision of the Apex Court in Indian & Eastern Newspaper Society V.CIT [1979] 119 ITR 996. It was a case where the Tribunal has cancelled the order of reassessment and on reference, the High Court held that apart from the information furnished by the audit party, the Assessing Officer had no other information for reopening. The views taken by the Tribunal and the High Court, both were upheld by the Apex Court and the appeals had been dismissed. This would, on the contrary, help the cause of the assessee. 11. So far as the P.V.S.Beedies (P) Ltd. (supra) is concerned, it was a case of reopening of assessment because in the original assessment, the donation made to a charitable trust were held by the Assessing Officer to be eligible for deduction under Section 80G. It was pointed out by the internal audit party that the recognition which had been granted to the trust ....