TaxTMI 
TaxTMI 
2024 (11) TMI 435
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....Discovery Travel, Living Channel and Animal Planet Channel. Petitioner filed Return of Income for AY 2011-12 on 30.11.2011. The return of the petitioner was selected for scrutiny and notice under Section 143 (2) of the Act, was issued to the petitioner on 03.08.2012. Another notice under Section 143 (2) of the Act was issued to the petitioner on 19.09.2014 along with a detailed questionnaire. Reply to the said questionnaire was filed by the petitioner on 21.11.2014 along with relevant material. 3. The Transfer Pricing Officer ["TPO"] passed an order dated 30.01.2015 proposing a transfer pricing adjustment amounting to Rs. 45,14,38,652/-. 4. On 23.03.2015, Draft Assessment Order was passed by the Assessing Officer ["AO"], giving effect the order passed by the TPO. A disallowance of Rs. 44,63,40,998/- and Rs. 3,89,63,085/- was proposed by the AO on account of mismatch in Form 26AS and advertising expenses claimed in the Profit & Loss Account ["P&L Account"] respectively. 5. Dispute Resolution Panel ["DRP"] issued directions under Section 144C (5) of the Act, deleting the disallowance of advertisement expenses claimed in the P&L Account by the petitioner. 6. Final Assessment Order....
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.... merits for the AY 2012-13. It is also submitted that the claim of deductibility of the said expenses was again allowed in AY 2013-14. In view thereof, it has been submitted that there was no tangible material leading to a prima facie belief that income chargeable to tax has escaped assessment in the subject AY. Rather, it is a case of change of opinion as compared to opinion formed and expressed in the later years. 15. The submission of the learned Standing Counsel appearing for the Revenue is that petitioner had debited an amount of Rs. 2.01 crore on account of DAP paid to the employees during AY 2011-12, which was over and above the normal salary and allowances. Employees were given amount equal to the appreciation in the value of unit over given period of time which was in the nature of dividend as the DAP unit was linked to the shares of holding company. This issue was not examined during the assessment proceedings under Section 143 (3) on account of its ambiguous nature. It has been further argued that the reopening action has been initiated on the basis of prima facie opinion. The sufficiency or correctness of the material is not to be gone into at this stage as it will be ....
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....eedings for AY 2012-13, it was observed that assessee had debited Rs. 1.23 Crores on account of discovery appreciation plan as per which participating employees were paid an amount equal to the appreciation in the value of units given over a period of time apart from normal salary and allowances. As the amount debited was related to the distribution of profits and was in the nature of dividend which is not admissible expenditure. The assessment proceedings for this assessment year was completed u/s 143 (3) of the Income Tax Act, 1961. From the details available on record, it is also observed that identical claim was made by the assessee during AY 11-12 also which was also assessed u/s 143 (3) of the Act. During the perusal of assessment record of A.Y. 2012-13 also it is observed that the Assessee Company has debited Rs. 2.01 Crores on account of Discovery Appreciation Plan ('DAP) in A Y 2011-12 also. Reference Para 23(a), Notes to Financial Statements for March 31, 2012 (A. Y. 2012-13). This is a plan in which participants i.e. employees were paid an amount equal to the appreciation in the value of unit over given period of time apart from normal salary and allowances. DAP u....
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....n the part of the assessee to disclose truly and completely the material particulars. In this regard, we may refer to some of such judgments of the Supreme Court and of our own High Court. In CIT v. Goetze (India) Ltd. [2010] 229 CTR 167 (Delhi), reliance was placed on the judgment of CIT v. Kelvinator of India Ltd. (2002) 174 CTR (Delhi) 617, wherein, it was specifically observed that when a regular order of assessment is passed in terms of Section 143 (3), presumption can be raised that such an order has been passed on application of mind. The Full Bench observed that if it were to be held that an order that has been passed purportedly without application of mind, would itself confer jurisdiction upon the AO to reopen the proceedings without anything further, the same would amount to giving premium to an Authority exercising a quasi-judicial function to take benefit of its own wrong. The Full Bench decision also makes it clear that Section 147 of the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceedings upon mere change of opinion. The appeal arising out of the Full Bench decision of this Court has been dismissed by the Supreme....
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....peak of any allegation, that the asseessee had failed to disclose fully and truly all material facts necessary for its assessment and because of that failure, there had been an escapement of income chargeable to tax. In fact, AO specifically records in the reasons that it was a 'mistake' which resulted in under assessment of the income of 2.01 crores for AY 2011-12. AO also records in the reasons that "production expenses have been allowed to the assessee without verification." It is, therefore, manifest that AO has not attributed the alleged escapement of income to any failure on the part of petitioner but to a mistake and lack of verification on its own part. Petitioner cannot be allowed to suffer because of lapse of the AO. The Coordinate Bench of this Court in CIT v. Eicher Ltd. [2007] 294 ITR 310 (Delhi), after making reference to different judgments of various High Courts, observed that if the entire material had been placed by the assessee before the AO at the time when the original assessment was made and the AO applied his mind to that material and accepted the view canvassed by the assessee, then merely because he did not express this in the assessment order, that by itse....
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.... the appropriate remedy in such a situation may lie under Section 263 of the Act. In CIT v. Usha International Ltd., 348 ITR 485 (Del.) [FB], the Court held as under:- " ... where an Assessing Officer incorrectly or erroneously applies law or comes to a wrong conclusion and income chargeable to tax has escaped assessment, resort to Section 263 of the Act is available and should be resorted to. But initiation of reassessment proceedings will be invalid on the ground of change of opinion." 28. Consequently, one of the essential ingredients for reopening the assessment beyond the period of four years has not been satisfied in the present case. Reassessment proceedings are therefore bad in law. 29. Quite apart from above, it is also important to note that the details regarding DAP and production and translation expenses were placed before the AO in AY 2012-13 and on consideration of material so placed on record, the claim of DAP expenses as well as production and translation expenses were allowed by the AO. Order of assessment for AY 2012-13 has attained finality as on date. We also take note of the undisputed position as brought to our notice during arguments that the claim of de....