Though the power of the A.O. to reopen an assessment within a period of four years is indisputably wider than when an assessment is sought to be reopened beyond four years, the power is nonetheless not unbridled. After the amendment which was brought in by the Direct Tax Laws Amendment Act, 1987 with effect from 1 April 1989, the A.O. must have reason to believe that income has escaped the assessment. At the same time, the A.O. is not conferred with the power to review an assessment and he cannot reopen an assessment only because of a mere change in the opinion.
In the present case, the foundation is the Consultancy Agreement between the parties, where it was agreed, as per the Petitioner, that the Petitioner would get a guaranteed fee of Rs. 50 lacs, which was payable on a monthly basis at the rate of Rs. 3 lacs per month, at least for 12 months, or at the time when the investment size is achieved and/or if the agreement is revoked at Samira’s violation, whichever is earlier, the outstanding balance will be paid as a lump sum. As per the Petitioner, after 12 months from the date of agreement i.e. 22.10.2007, apart from lump sum amount of Rs. 5 lacs, the amount claimed, according to this agreement, was outstanding. This clause itself cannot be read in isolation. The revised clause and the obligation on the part of the Petitioner as referred in other part of the Agreement, just cannot be overlooked. There are no averments to show that they have complied with their part in full and, therefore, they are entitled to claim this full consultancy guaranteed amount as agreed. The Respondent/company in the affidavit has denied and made a positive statement that there were no full compliances by the Petitioner.
This Court in a series of decisions, has consistently taken a view that the creditors of the transferee Company would have no right to intervene in the petition filed by the transferor Company under Section 391 of the Companies Act. Learned Single Judge of this Court in the case of Industrial Credit & Investment Corpn. of India Ltd. (supra)
The contention of the assessee that the payments in question were made to the builder not in the assessment year 2008-2009, but in the earlier years has been rightly rejected by the CIT because, firstly, the payments made in the earlier years if any related to purchase of flat No. B-92 on the 9th floor and not in respect of flat No.A-46 on the 4th floor. If the amounts paid on 07.03.2008 were infact paid in the earlier years, the same would have found place in the agreement dated 07.03.2008.
Section 43B of the Act is applicable only in respect of any amount paid as interest to a scheduled bank. A scheduled bank as defined in Explanation 4 to Section 43B of the Act would have the same meaning as contained in the Explanation to Section 11(5) (iii) of the Act.
The acknowledgement and/or acceptance of the admitted amount, received by the petitioner towards the full and final settlement concludes the issue for the purpose of winding up petition. Therefore, having once settled the matter, the averment and/or allegations given of coercion and or undue influence just cannot be gone into the Company Petition.
Whether on the facts and in the circumstances of the case, the ITAT is correct in law in deleting the interest charged u/s 234B and 234C while computing income u/s115JB without appreciating the facts that the said section specifically state that all provision of the Act shall apply to the assessee being company mentioned in the said section and therefore section 115J of the Act is no more available for the assessee for delaying the payment of advance tax in view of the insertion of section 115JA 115JB in the Act.
In the present case, the sole and dominant nature of the activity is education and the Petitioner exists solely for the purposes of imparting education. An incidental surplus which is generated, and which has resulted in additions to the fixed assets is utilized as the balance-sheet would indicate towards upgrading the facilities of the college including for the purchase of library books and the improvement of infrastructure.
Circular which is issued by the Board is in terrorem and its plain effect and consequence is to deprive the assessee of the remedy which is provided under the law of moving, as the case may be, the CESTAT, the High Court or the Supreme Court against an order of adjudication of the competent appellate forum.
In the present case the notice to show cause under Section 124 was not issued to the Petitioner. The order of adjudication dated 20 September 2007 was similarly not in respect of the Petitioner. The certificates that were issued under Section 142(1)(c)(ii) on 19 March 2010 were in the names of (i) Mehul Exports of which the proprietor is Nirmal Agawal, the spouse of the Petitioner; (ii) Nisum Exports and Finance Private Limited of which the director is stated to be Nirmal Agawal in the certificate; and (iii) Nisum Global Limited of which again the director is stated to be Nirmal Agawal.
