Transwind Infrastructure (P) Ltd. v. ITO

Case Laws Analysis
Followed on Siddhi Vinayak Transport v. Asstt. CIT 2014 TaxPub(DT) 1124 (Guj-HC)
Followed CIT v. Kelvinator of India Ltd. 2010 TaxPub(DT) 1335 (SC)

SUBSCRIBE FOR FULL CONTENT


The Tax PublishersSpecial Civil Application No. 357 of 2013 2013 TaxPub(DT) 1961 (Guj-HC) : (2013) 052 (I) ITCL 0583 : (2014) 362 ITR 0067 Income Tax Act, 1961 --Reassessment --Full and true disclosure Change of opinion--Assessee had claimed labour expenditure of Rs. 9.48 crores (rounded off) and on the balance labour payment of Rs. 3.05 crores (rounded off) provision of TDS was not applicable and therefore, no tax was deducted at source. Assessing officer, while framing scrutiny assessment had discarded assessee's contention that TDS was not applicable for the remaining labour charges and made ad hoc disallowance at 8% of the total payments in his order of assessment. While matter was still pending before Tribunal, assessing officer issued notice under section 148 for reopening of assessment on the ground that non-deduction of TDS under section 40(a)(ia) in respect of remaining labour payments had resulted in underassessment of income. Assessee challenged the notice issued under section 148 for reopening of assessment. *Held :* Was justified as from the tenor of the reasons itself, it was gathered that it was not as if that the assessing officer while framing scrutiny assessment had overlooked this aspect of the matter but, having enquired with the assessee and having concluded that tax at source though required, was not deducted, made disallowance on ad hoc basis which, according to the revenue, was not in order. Whatever be the legality of such assessment, the fact remains that in the scrutiny assessment, assessing officer had thoroughly and fully scrutinized the assessee's claim of deduction of labour expenditure. Therefore, any re-examination of such a question at this stage would only amount to change of opinion. Thus, once the claim was fully examined, power of reopening was simply not available. Income Tax Act, 1961 Sections 147 & 40(a)(ia) In the Gujarat High Court Akil Kureshi & Sonia Gokani, J.J. Transwind Infrastructure (P) Ltd. v. ITO Special Civil Application No. 357 of 2013 16 April, 2013 *Decision:* In assessees favour. Petitioner by : S. N. Soparkar and B. S. Soparkar Respondent by : Paurami B. Sheth ORDER Heard learned counsel for the parties for final disposal of the petition. Petitioner has challenged a notice dated 30-3-2012 as at Annexure A to the petition issued by the respondent-assessing officer under section 148 of the Income Tax Act, 1961. 2. Petitioner is a company registered under the Companies Act. For the assessment year 2007-2008, petitioner filed its return of income on 29-10-2007 declaring total income of Rs. 36,27,970. In such return, the petitioner had claimed labour expenditure of Rs. 9.48 crores (rounded off). As per the petitioner, on the balance labour payment of Rs. 3.05 crores (rounded off), provision of TDS was not applicable and, therefore, no tax was deducted at source. SUBSCRIBE FOR FULL CONTENT

The Tax PublishersSpecial Civil Application No. 357 of 2013
2013 TaxPub(DT) 1961 (Guj-HC) : (2013) 052 (I) ITCL 0583 : (2014) 362 ITR 0067

Income Tax Act, 1961

--Reassessment --Full and true disclosure Change of opinion--Assessee had claimed labour expenditure of Rs. 9.48 crores (rounded off) and on the balance labour payment of Rs. 3.05 crores (rounded off) provision of TDS was not applicable and therefore, no tax was deducted at source. Assessing officer, while framing scrutiny assessment had discarded assessee's contention that TDS was not applicable for the remaining labour charges and made ad hoc disallowance at 8% of the total payments in his order of assessment. While matter was still pending before Tribunal, assessing officer issued notice under section 148 for reopening of assessment on the ground that non-deduction of TDS under section 40(a)(ia) in respect of remaining labour payments had resulted in underassessment of income. Assessee challenged the notice issued under section 148 for reopening of assessment. Held : Was justified as from the tenor of the reasons itself, it was gathered that it was not as if that the assessing officer while framing scrutiny assessment had overlooked this aspect of the matter but, having enquired with the assessee and having concluded that tax at source though required, was not deducted, made disallowance on ad hoc basis which, according to the revenue, was not in order. Whatever be the legality of such assessment, the fact remains that in the scrutiny assessment, assessing officer had thoroughly and fully scrutinized the assessee's claim of deduction of labour expenditure. Therefore, any re-examination of such a question at this stage would only amount to change of opinion. Thus, once the claim was fully examined, power of reopening was simply not available.

Income Tax Act, 1961 Sections 147 & 40(a)(ia)

In the Gujarat High Court

Akil Kureshi & Sonia Gokani, J.J.

Transwind Infrastructure (P) Ltd. v. ITO

Special Civil Application No. 357 of 2013

16 April, 2013

Decision: In assessees favour.

Petitioner by : S. N. Soparkar and B. S. Soparkar

Respondent by : Paurami B. Sheth

ORDER

Heard learned counsel for the parties for final disposal of the petition. Petitioner has challenged a notice dated 30-3-2012 as at Annexure A to the petition issued by the respondent-assessing officer under section 148 of the Income Tax Act, 1961.

2. Petitioner is a company registered under the Companies Act. For the assessment year 2007-2008, petitioner filed its return of income on 29-10-2007 declaring total income of Rs. 36,27,970. In such return, the petitioner had claimed labour expenditure of Rs. 9.48 crores (rounded off). As per the petitioner, on the balance labour payment of Rs. 3.05 crores (rounded off), provision of TDS was not applicable and, therefore, no tax was deducted at source.