| COURT: |
|
| CORAM: |
|
| SECTION(S): |
|
| GENRE: |
|
| CATCH WORDS: |
|
| COUNSEL: |
|
| DATE: |
(Date of pronouncement) |
| DATE: |
December 25, 2011 (Date of publication) |
| AY: |
|
| FILE: |
|
| CITATION: |
|
|
|
S. 147: If AO disputes Audit objection, she cannot use that as “reason to believe”
The Revenue Audit raised an objection that the assessee had made remittances to foreign parties without deduction of TDS u/s 195 and that the expenditure ought to have been disallowed u/s 40(a)(i). In reply, the AO wrote back stating that as the amounts remitted to the foreign parties were not chargeable to tax in India, the assessee was under no obligation to deduct tax u/s 195 and that the expenditure was not disallowable u/s 40(a)(i). However, she still issued a notice u/s 147 and reopened the assessment to disallow the said expenditure. The assessee filed a Writ Petition to challenge the reopening. HELD allowing the Petition:
U/s 147, it is only the AO’s opinion with respect to the income escaping assessment which is relevant for the purpose of reopening an assessment. While it is true if the audit party brings certain aspects to the notice of the AO and thereupon, the AO forms his own belief, it may be a valid basis for reopening assessment, the mere opinion of the Audit Party cannot form the basis for the AO to reopen an assessment. On facts, the AO had categorically come to the conclusion that the objection of the audit party was not valid and that the assessee’s explanation with respect to non-requirement of collection of TDS was required to be accepted. Accordingly, the AO could have no “reason to believe” that income had escaped assessment and so the s. 148 notice was without jurisdiction (P. V. S. Beedies 237 ITR 13 (SC) & Indian & Eastern Newspaper 119 ITR 996 (SC) distinguished; Lucas TVS 249 ITR 306 (SC) followed).
See also
Sarthak Securities where it was held (
in a s. 143(1)(a) case) that reopening on information without independent application of mind was invalid
Related Posts:
- The All Gujarat Federation Of Tax Consultants vs. Union Of India (Gujarat High Court) (No. 1) We are of the view that the respondent No.1 – Union of India, Ministry of Finance should immediately look into the issue, more particularly, the representation dated 12th October 2020 at Annexure : I of the paper book (page 108) and take an appropriate decision at the earliest in accordance…
- The All Gujarat Federation Of Tax Consultants vs. Union Of India (Gujarat High Court) (No. 2) It is the case of the CBDT that it has declined to exercise its power under Section 119 of the Act as the conditions for exercise of such power do not exist. It is the case of the Revenue that the issue of hardship was dealt with considerably at the…
- Paresh Nathalal Chauhan vs. State Of Gujarat (Gujarat High Court) It is a matter of deep regret that the Chief Commissioner of State Tax has attempted to justify such wrongful action on the part of the officers of the department by placing reliance upon the provisions relating to power of investigation under an earlier enactment to justify the actions of…
- DIT (E) vs. Gujarat Cricket Association (Gujarat High Court) It is not in dispute that the three Associations have not distributed any profits outside the organization. The profits, if any, are ploughed back into the very activities of promotion and development of the sport of cricket and, therefore, the assessees cannot be termed to be carrying out commercial activities…
- Clearview Healthcare P. Ltd vs. ITO (ITAT Delhi) Keeping in view of the facts and circumstances of the case and by applying the principles from the aforesaid decision and legislative intent behind insertion of section 56(2)(viib), I hold that addition made by AO on account of alleged excess share premium is unjustified when those very shares are sold…
- PCIT vs. Gulbrandsen Chemicals Pvt. Ltd (Gujarat High Court) The significance of the aforesaid guidelines lies in the fact that they recognise that barring exceptional cases, the tax administration should not disregard the actual transaction or substitute other transactions for them and the examination of a controlled transaction should ordinarily be based on the transaction as it has been…
Leave a Reply