TaxTMI 
TaxTMI 
2025 (11) TMI 653
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.... as 'the Act') on 31.01.2011 determining total income of the assessee as NIL after setting off of brought forward losses and unabsorbed depreciation. The assessee filed appeal before the CIT(A) against the assessment order inter alia assailing addition of Rs. 35,89,81,227/- made to the returned loss of Rs. 32,72,39,840/-. The CIT(A) vide order dated 04.02.2013 granted part relief to the assessee determining loss of Rs. 35,39,25,904/-. 4. Thereafter, the case of the assessee for AY 2007-08 was reopened and notice u/s.148 of the Act was issued to the assessee on 31.03.2014. In compliance of said notice, the assessee filed return of income on 01.05.2014 declaring loss of Rs. 35,39,25,904/-. The reasons for reopening were supplied to the assessee on 29.09.2014. The assessee filed objections to reopening of assessment, inter alia assailing assumption of jurisdiction u/s.147 of the Act, as well as validity of notice issued u/s.148 of the Act. The said objections of the assessee were disposed of by the Assessing Officer (AO) on 12.01.2015. Thereafter, the AO vide order dated 05.02.2015 completed assessment u/s. 147 of the Act making disallowance of Rs. 3,60,01,993/- u/s.40(a) of the Ac....
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.... authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that certain income has escaped assessment. 2. It is also well-settled that the words 'reason to believe' used in section 147 are stronger than the words "is satisfied'. The belief entertained by the Assessing Officer for the purpose of initiating proceedings under section 147 must not be arbitrary or irrational. It must be reasonable. In other words, it must be based on reasons, which are relevant and material. 3. In the instant case, appellant challenged validity of reassessment proceedings initiated by the Assessing Officer on the ground that assessee has not deducted tax at source on the payments made to M/S Make My Trip Inc. on account of cost of tickets reimbursed. The assessing officer recorded that appellant company failed to comply with the provisions of the section 195 r.w.s. 9 of the Act. Therefore, as per provisions of section 40(a) of the Act, assessing officer disallowed the payment made by the Assessee M/S Make My Trip (India) Pvt. Ltd. to M/S Make My Trip Inc. 4. From the assessment order it could observed th....
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....e AR are rejected and the reopening of the assessment is upheld as valid." 8. Submissions made by ld. Counsel for the assessee heard, written submissions filed by the ld. DR perused, orders of the authorities below examined, documents and decision on which rival sides have placed reliance considered. The assessee in Cross Objections has assailed validity of reopening of assessment for AY 2007-08. The assessee has also filed a petition under Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 challenging CIT(A) order in upholding reopening of assessment u/s.147 of the Act. The grounds raised by the assessee in application under Rule 27 are argumentative and supports the ground raised by the assessee in Cross Objections challenging reopening of assessment. 9. Before proceedings further it would be apposite to refer to reasons recorded for reopening. The same are as under:- "Reasons for issue of Notice U/S 148 for the A.Y. 2007-08 in the case of M/S. Make My Trip (India) Pvt Ltd The assessee company filed its return of income for the AY. 2007-08 on 31,10,2007 declaring a loss of Rs. 32,72,39,840/- The return was processed u/s 143(1) at the returned loss. Subse....
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.... u/s.144C r.w.s 143(3) of the Act. 11. The Assessing Officer, reopened the assessment after the elapse of more than four years from the end of relevant assessment year for the reasons reproduced above (in para 9). A bare perusal of the reasons would show that mandatory condition set out in first proviso to section 147 of the Act is missing. Nowhere in the reasons the AO has alleged that it is failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment for relevant assessment year, the assessment has been reopened. Nor, does the AO refer to any tangible material which has come into his possession after completion of assessment u/s.143(1) of the Act. Moreover, the reassessment has been reopened not for making any addition but to disallow reimbursement of expenses which were reflected in Form 3CEB. In the case of Haryana Acrylic Manufacturing Co. vs. CIT (supra), the Hon'ble High Court has held that where the assessment is reopened beyond four years period, it is necessary for the AO to overcome bar setup by the proviso to section 147 of the Act. If, the condition is not satisfied, the bar would operate and no action u/s.147 of the Ac....