TaxTMI 
TaxTMI 
2025 (4) TMI 1669
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....ng the order passed u/s 147 r.w.s 144 r.w.s 1448, even when no time was given to appellant to furnish objections to the draft assessment order. Reopening of Assessment 2.1 On the facts and in the circumstances of the case and in law, the CIT(A) failed to appreciate that, AO reopened the assessment after a period of 4 years from the end of the assessment year even when there was no failure on the part of appellant to fully and truly disclose all information required for completion of assessment. 2.2 On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in upholding the reopening proceedings even when no new tangible material was found, and the reopening was based on materials already on record. 2.3 On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in upholding the reopening proceedings even when the reopening was only based on a change of opinion. Exclusion of foreign income in computing Income under Normal Provisions and under MAT 3.1 On the facts and in the circumstances of the case and in law, the Id. CIT(A) erred in upholding the order of AO in not excluding the in....
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....d not appear in e- filing portal on the morning of 28.03.2022 and it was appearing in the portal on 29.03.2022. The assessee tried to upload its objections on 29.03.2022 the provision for filing the same or for seeking a virtual hearing was closed and assessee could not respond to the draft assessment order. The assessment u/s 147 was passed on 30.03.2022 by finalizing the assessment based on the draft assessment order and the addition was confirmed amount to Rs. 65,03,12,137/- related income of foreign branches of the assessee in Dubai and Antwerp. The allegation of the assessee is that Ld. AO passed the order u/s. 147 without granting proper and meaningful opportunity to the petitioner to respond to the show cause notice. The assessee was not given any time to respond to the draft assessment order before the passing of the impugned assessment order dated 30.03.2022. The final order passed without giving any time to the assessee to respond cannot be said to be an opportunity given to assessee. The further grievance of the assessee is that the Ld. AO passed an order u/s 147 r.w.s 144B even when there was no new tangible material and by disposing off the objections raised by the ass....
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....action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year." 5. The Ld.AR argued that Section 147 provides that the Ld. AO can re-open an assessment made u/s. 143(3) of the Act if there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for the year under consideration. But in this case the claim in respect of exclusion of income of foreign branches was claimed in the return of income and the same was separately disclosed in the computation of income. Further during the scrutiny assessment proceedings u/s 143(3) the Ld. AO vide notice u/s 142(1) dated 14.03.2018 in para 19 which is annexed in APB pages 22-25, required the following on exclusion of foreign income. "19) In computation of income pr....
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....reasons do not indicate anywhere that there has been failure to disclose. Use of expression "..... It is quite clear that assessee company has failed to disclose fully and truly all material facts necessary for assessment ...." is only a bald statement used to get out of the restrictions imposed in section 147 of the Act. 7. Mr. Pinto relied upon a judgment of this Court in Crompton Greaves Ltd. v. Asstt. CIT [2015] 55 taxmann.com 59/229 Taxman 545 to submit that even if the reason for reopening does not specifically state that there was any failure on the part of petitioner to disclose fully and truly all material facts necessary for its assessment for the relevant assessment year, it will not be fatal to the assumption of jurisdiction under sections 147 and 148 of the Act. We would certainly agree with Mr. Pinto but as held in Crompton Greaves Ltd (supra), this is subject to the rider that there must be cogent and clear indication in the reasons supplied, that in fact there was failure on the part of the assessee to disclose fully and truly all the material facts necessary for its assessment. If the factum of failure to disclose can be culled from the reasons in support ....
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.... credit allowed by the Ld. JAO in the assessment order dated 27/03/2018 under section 143(3) of ITA 1961, wherein appellant has been clearly granted the credit of taxes paid under section 90/91 of ITA 1961. The mention in para 13 is 'Allow relief u/s 90/91 of the Act after verification. In such a case it will be an imperative to calculate the total income, after considering the tax credit availed, if any, by the appellant." 10. The appeal was subsequently scheduled for clarification following the submission made by the Ld. DR. Both parties were afforded a reasonable opportunity to be heard. During the hearing, the Ld. AR rebutted the submissions of the DR and presented the following arguments which are reproduced as below :- "Observations of the Ld DR (1) The reassessment was necessitated on the issue of 'Exclusion of Income of foreign branches located in Dubai and Antwerp', which was not deliberated in the assessment order passed under section 143(3) dated 27/03/2018. It can be further seen that the question regarding the issue was asked in a routine/casual manner vide 142(1) notices dated 14/03/2018. Observation of the Appellant. ....
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....e of exclusion of income of foreign branches in toto. The AR had only accepted the fact that the issue was decided against in the latter decision in the case of Technimount even though the same was decided in favour of the appellant in Bank of India's case in the earlier years. Observations of the Ld DR (3) "Learned counsel has shown, in accepting the fact that even though the issue is covered in favour of the assessee by earlier decisions of the coordinate benches, these coordinate bench decisions cease to be binding judicial precedents inasmuch as reasoning adopted therein does not hold good any longer in the light of the decision in the case of Technimont (supra), admirable grace. respective treaty" Observation of the Appellant The Ld DR had reproduced extensively from the observation of Hon'ble ITAT in ITA No 1767 & 2048 in the case of Bank of India v ACIT to argue the issue on merits whereas the jurisdictional issue whether AO had assumed jurisdiction when there was no failure on its part is not covered by said decision. Only when there was omission to disclose material fact, the extended period of jurisdiction is available to the AO....
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....s to be some trigger by way of either information received from the external source or from the internal source and without such trigger reopening of the assessment merely to relook into the assessment on the issues, which had been considered during the regular assessment proceedings, will amount to review of the assessment order by the Assessing Officer, which is not permitted in law under the provisions of section 147 of the Act. The Assessing Officer can only reassess the assessment wherever income escaped assessment, and not review the order passed by him. In view of the above discussion and respectfully following the decision of the Honble Bombay High Court in the case of HDFC Bank Ltd. (supra) ....... allowed. Observations of the Appellant The above decision of Hon'ble ITAT is in the context of jurisdiction of AO to reopen the issue in respect of Asst years 2016-17 and 2017-18 which has been decided in favour of the Appellant. An issue which has been decided on jurisdiction cannot be re-agitated on merits an exercise of power without authority of Law is illegal in administration of justice and needs to be struck down. Observations of the Ld DR ....
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....n making informed decision. The reply of the appellant vide letter dated 26.03.2018 Sr.No.19, is even more casual. It has neither made the any attempt to expound of the legalities nor bought on record any facts regarding the payments of taxes in foreign jurisdiction. It does not explain its stand of excluding a part of the global income qua jurisdictions of Dubai and Antwerp which is patently inexplicable, considering the provisions of section/s 9/90/91 of ITA 1961, which mandate that the global income is supposed to include all the income earned by the resident Indian Bank. Such a view cannot be countenanced in view of quoted/attached judgements of Hon'ble Mumbai ITAT in the case/s of Technimont (P) Limited and Bank of India. Further, it is a fact that the Ld. JAO has not deliberated in any manner on this issue in the assessment order. There is not a whisper on the issue of inclusion or otherwise or the non-taxation of the stated global income. When can an issue of untaxed income, which is subject to reopening, would amount to change of opinion? Surely such a cursory mention of such an income of Rs.65.03 Crs(by no means a small amount) in the questionnaire an....
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....apement of income when there has been a full and true disclosure of facts by the appellant. The Id. CIT-DR requires the AR of the appellant who was also the AR in the subsequent decision in case of Bank of India to predict at the time of assessment and inform the AO that in the future years the hon'ble ITAT will decide the issue against the appellant in another case and failure to do so can make the reassessment valid. It is respectfully submitted that it is wholly incorrect to state that the AR has to predict the future and inform the AO of the decisions the failure of which will make all reassessments valid. Observations of the Ld DR (10) The above stand of the revenue has been endorsed in the case of Consolidated Photo &Finvest Ltd. vs. Assistant Commissioner of Income-tax (2006) 151 Taxman 41 (Delhi)/[2006) 281 ITR 394 (Delhi)/(2006) 200 CTR 433 Observations of the Appellant We rely on the following observation of the Delhi High Court in the case of KLM Royal Dutch Airlines vs Asst Director of Income Tax (2007] 159 Taxman 191 (Delhi) viz. "The Full Bench of the Delhi High Court in CIT v. Kelvinator of India Ltd. [2002] 2....
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....in Point No. 19 of the said notice. The assessee furnished complete details and explanations in support of its claim. The Ld. AO had duly considered and applied his mind while determining whether the foreign branch income was to be excluded. Only after such due application of mind, the Ld. AO allowed the said claim in the original assessment. 12. The reopening of the assessment proceedings under Section 147 of the Act, on the pretext that the assessee failed to disclose full and true material facts regarding the exclusion of foreign income despite detailed explanations and submissions made during the original scrutiny assessment-amounts to an impermissible "change of opinion." It is a well-settled position in law that reassessment proceedings cannot be initiated merely because the Assessing Officer intends to take a different view on the same set of facts that were already examined during the original assessment. The Hon'ble Delhi High Court, in CIT v. Kelvinator of India Ltd. [2002] 123 Taxman 433 (Del. FB), has categorically held that: "21. Another aspect of the matter also cannot be lost sight of. A statute conferring an arbitrary power may be held to be ultra....
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....sessing Officer to reopen the proceeding without anything further, the same would amount to giving premium to an authority exercising quasi-judicial function to take benefit of its own wrong. For the reasons aforementioned, we are of the opinion that answer to the question raised before this Bench must be rendered in the affirmation, i.e., in favour of the assessee and against the revenue. No order as to costs." The Hon'ble Supreme Court, in CIT v. Kelvinator of India Ltd. [2010] 187 Taxman 312, affirmed this view, holding that reassessment must be based on "tangible material" that was not previously considered during the original assessment. Similarly, the Hon'ble Bombay High Court, in Hindustan Unilever Ltd. vs. DCIT- 1(1)(2), Mumbai, 131 taxmann.com 166, held that when the Assessing Officer has completed the assessment under Section 143(3) based on an examination of the assessee's books of accounts and has allowed a particular claim, he cannot later reopen the assessment based on the same material by merely taking a different view. 13. In the present case, the assessee had disclosed all material facts concerning the exclusion of foreign income as pe....