2023 (10) TMI 1318

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....er, at the outset, we propose to deal with it. 3. Facts relevant for deciding this issue, briefly are, the assessee is a non-resident corporate entity incorporated under the laws of South Africa and is a tax-resident of South Africa. Admittedly, for the assessment year under dispute, assessee did not file any return of income in India. As stated by the Assessing Officer in the assessment order, as per AIR information available in AIMS module of ITBA, it was found that the assessee had entered into certain transactions resulting in generation of income in India. Whereas, assessee had not filed any return of income in India offering such income. Based on such information, the Assessing Officer reopened the assessment under Section 147 of the Act after recording reasons. In response to notice issued under Section 148 of the Act, assessee filed its return of income and objected to the reopening of assessment under Section 147 of the Act. The case of the assessee was, during the year under consideration, it had entered into an agreement with TAJ Television Ltd., another non-resident entity, in respect of certain rights pertaining to live transmission of certain matches played in Sout....

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....r, while alleging escapement of income has referred to M/s. Cricket Australia not filing return of income in India. Thus, he submitted, the reasons recorded reveal complete non-application of mind by the Assessing Officer. He submitted, the facts discussed in the reasons recorded have absolutely no nexus with the material available on record. 6. Drawing our attention to the approval granted by the competent authorities under Section 151 of the Act, learned counsel submitted, while granting approval also, neither the Additional CIT nor the CIT have applied their mind to the facts and material on record and have granted approval in a thoroughly mechanical manner. Thus, he submitted, the assessment having been reopened under total factual misconception and without any tangible material on record to establish that income chargeable to tax has escaped assessment, assumption of jurisdiction under Section 147 of the Act is wholly invalid. Thus, he submitted, the assessment order is invalid. He submitted, without properly examining the issue, the DRP has rejected assessee's contention in a purely perfunctory manner. Thus, he submitted, the assessment order deserves to be quashed. 7. ....

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.... Dy.Commissioner of Income Tax Circle-1(2)(1), Intl. Tax, New Delhi" 10. On going through the reasons recorded, we are of the view that they are replete with various factual misstatement/inaccuracies and silly mistakes. Though, the Assessing Officer has reopened the assessment for assessment year 2013-14, however, the heading of the reasons recorded refers to assessment year 2014-15. Even, the name of the assessee has been wrongly mentioned. In paragraph 3 of the reasons recorded, the Assessing Officer has very clearly and categorically stated that, though, the assessee had filed TDS return under Section 194E of Rs. 4,68,56,484 and under Section 195 of Rs. 1,07,16,433, however, it didn't file any return of income. As a result of which, genuineness of financial transaction business activities of the assessee could not be ascertained. In paragraph 4 of the reasons recorded, the Assessing Officer has mentioned filing of return of income by M/s. Cricket Australia. Whereas, admitted facts are, the assessee has not filed any TDS returns whatsoever under Section 194E or section 195 of the Act. In fact, there is no reason for the assessee to file any TDS returns in India as it has ....

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....matter of reopening of assessment under Section 147 of the Act is only for the purposes of putting a safeguard against any arbitrary or highhanded exercise of power by the Assessing Officer while reopening of assessment under Section 147 of the Act. Therefore, the burden casts on the approving authority is onerous, as, based on the reasons recorded by the Assessing Officer for reopening of assessment, approving authority has to find out whether a case for reopening of assessment is made out. 13. In the facts of the present appeal, undoubtedly, the reasons recorded by the Assessing Officer certainly do not make out a case for reopening of assessment under Section 147 of the Act. However, without examining the facts on record, both the Additional CIT and CIT have granted approval under Section 151 of the Act. Granting approval under Section 151 of the Act is not an empty formality. Approval has to be granted with caution and proper application of mind to the facts and material on record to prevent miscarriage of justice, as, reopening of assessment involves reopening of an already concluded assessment. Therefore, it should not be used as a tool for harassment to the assessee. Unle....