Case: Capgemini India Private Limited Vs. Assistant Commissioner of Income Tax Circle 14(1)(2) &amp; Others

permissible in law, then, the impugned notice cannot be sustained. It must be quashed and set aside for the failure to comply with the mandatory precondition. The reasons recorded did not reflect that there is any failure on the part of the Petitioner to disclose fully and truly all material facts necessary for the assessment. Mr. Pardiwalla sought to justify the course adopted by the Petitioner/Assessee during the course of the original assessment by relying on a Division Bench Judgment of this Court in the case of Hindustan Uniliver Limited vs. Deputy Commissioner of Income Tax reported in (2010) 325 ITR 102. 13. As far as the Respondents are concerned, they only rely upon the record, namely, the reasons, copy of which is at page 198 of the paper book and the order dismissing the objections. The affidavit in reply, as noted above, does not deal with para 12 of the Writ Petition at all. The affidavit in reply proposes to deal with the deduction and claimed by the Petitioner on merits. The affidavit admits that there was a questionnaire issued by the Assessing Officer in the original assessment but states that the same was a general one. The Petitioner has replied to this questionnaire and submitted general information. According to the Respondents, the Petitioner did not give information regarding the losses of Unit IV neither did the Petitioner adjust the losses of Unit IV with the profits of other units. The reply admits that the draft assessment order is faulty for the Assessing Officer for failing to adjust the losses of Unit IV against the profit making Units. Therefore, the Respondents, in the affidavit submit that there was no mention of the loss being adjusted against the profits of other units and this fact was not considered by the Assessing Officer in the draft assessment order. The Dispute Resolution Panel is equally faulted for having this draft assessment order accepted merely on the question of computation of deduction under section 10A of the IT Act. Then, the grounds of Appeal to the Tribunal have been referred to.14. It is thus contended that the Tribunal, in the order passed in Appeal, did not consider the issue of adjustment of the losses of Unit IV against the profits of Units II and III, which is the subject matter of issuance of notice under section 148 of the IT Act. Therefore, this notice is justified by urging that the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment for failure of the Petitioner/Assessee to disclose truly and filly all material facts relevant to the assessment year.15. Upon hearing both sides and perusing the Writ Petition and all Annexures thereto so also the affidavit in reply, we fail to understand as to how the Respondents justify the issuance of the notice under section 148 of the IT Act and by referring to such details including of the claim of deduction under section 10A of the IT Act. If these details and pertaining to deduction in question were not furnished and were not available with the Assessing Officer, then, one fails to understand as to from where the data and the computation has been taken and for reference by the Respondents themselves. In the reasons recorded, it is clear that the Assessing Officer is aware that the Petitioner Assessee is engaged in the business of development and export of software. The Assessing Officer was aware of the Units set up by the Assessee/Petitioner before us. He has derived the figures of profits and losses from the relevant records and the information, some of which was supplied and furnished by the Petitioner itself. In these circumstances and when material facts relevant to the assessment year were disclosed and were on record, then, one fails to understand as to why this notice has been issued. From the reasons itself, it is apparent that it is issued to revisit this claim of deduction under section 10A of the IT Act and as put forward by the Petitioner/Assessee. If the deduction under section 10A of the IT Act is allowable on the net profit derived by the Assessee company from eligible units, after setting off lossess from other eligible units, then, it is apparent that all the particulars and profits were before the Assessing Officer at the time of the original assessment. The Petitioner has, while disputing the reasons recorded and raising objections thereto, pointed out in details as to how the relevant facts were before the Assessing Officer. We do not find any material to the contrary and which falsifies the Petitioners assertions in the letter dated 12th December, 2014 raising specific objections to the reasons recorded for reopening the assessment under section 147 of the IT Act. The affidavit in reply is completely silent with regard to furnishing of these details and by the Petitioner. From the affidavit in reply, we have taken specific paragraphs, where the Petitioners version before the Assessing Officer in the original assessment though accepted by the Assessing Officer, he is faulted for not having taken into consideration certain aspects of this deduction. If the Petitioner allegedly did not give information regarding the losses of the Unit IV and did not adjust the losses of Unit IV with the profits of other units and therefore the order in that behalf is termed as erroneous, then, this is a clear case of revisiting this claim. Now, a different opinion is held by the Respondents and for which they want to reopen the assessment. Such a course is clearly impermissible.16. Having referred to the undisputed factual materials on record and finding that there is no justification for reopening the assessment that we have no alternative but to allow this Writ Petition. Once we find that the mandatory precondition and as set out in the statute has not been abided by, then, the notice under section 148 of the IT Act and all steps in furtherance thereof cannot be sustained.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. Upon hearing both sides and perusing the Writ Petition and all Annexures thereto so also the affidavit in reply, we fail to understand as to how the Respondents justify the issuance of the notice under section 148 of the IT Act and by referring to such details including of the claim of deduction under section 10A of the IT Act. If these details and pertaining to deduction in question were not furnished and were not available with the Assessing Officer, then, one fails to understand as to from where the data and the computation has been taken and for reference by the Respondents themselves. In the reasons recorded, it is clear that the Assessing Officer is aware that the Petitioner Assessee is engaged in the business of development and export of software. The Assessing Officer was aware of the Units set up by the Assessee/Petitioner before us. He has derived the figures of profits and losses from the relevant records and the information, some of which was supplied and furnished by the Petitioner itself. In these circumstances and when material facts relevant to the assessment year were disclosed and were on record, then, one fails to understand as to why this notice has been issued. From the reasons itself, it is apparent that it is issued to revisit this claim of deduction under section 10A of the IT Act and as put forward by the Petitioner/Assessee. If the deduction under section 10A of the IT Act is allowable on the net profit derived by the Assessee company from eligible units, after setting off lossess from other eligible units, then, it is apparent that all the particulars and profits were before the Assessing Officer at the time of the original assessment. The Petitioner has, while disputing the reasons recorded and raising objections thereto, pointed out in details as to how the relevant facts were before the Assessing Officer. We do not find any material to the contrary and which falsifies the Petitioners assertions in the letter dated 12th December, 2014 raising specific objections to the reasons recorded for reopening the assessment under section 147 of the IT Act. The affidavit in reply is completely silent with regard to furnishing of these details and by the Petitioner. From the affidavit in reply, we have taken specific paragraphs, where the Petitioners version before the Assessing Officer in the original assessment though accepted by the Assessing Officer, he is faulted for not having taken into consideration certain aspects of this deduction. If the Petitioner allegedly did not give information regarding the losses of the Unit IV and did not adjust the losses of Unit IV with the profits of other units and therefore the order in that behalf is termed as erroneous, then, this is a clear case of revisiting this claim. Now, a different opinion is held by the Respondents and for which they want to reopen the assessment. Such a course is clearly impermissible.16. Having referred to the undisputed factual materials on record and finding that there is no justification for reopening the assessment that we have no alternative but to allow this Writ Petition. Once we find that the mandatory precondition and as set out in the statute has not been abided by, then, the notice under section 148 of the IT Act and all steps in furtherance thereof cannot be sustained.