Apex Court has observed in Ajantha Industries (supra) is that while transferring the case on the ground of co-ordinated investigation, some reason has to be given by the commissioner which reveals why it is necessary to transfer the case for the purpose of co-ordinated investigation. In our view unfortunately Commissioner of Income Tax apart from stating that case has been transferred for co-ordinating investigation has not given any other reason. Impugned order is therefore quashed and set aside.
For these reasons, we have come to the conclusion that the Petitions would have to be allowed. We accordingly allow the Petitions by quashing and setting aside the notices under section 148 of the Income-tax Act, 1961 purporting to re-open the assessment for A.Ys. 2005-06, 2006-07, 2007-08 and 2008-09. Rule is made absolute in the aforesaid terms. There shall be no order as to costs.
The case of the revenue is that the respondent assessee is not entitled to concessional rate of tax provided in Article 12 of DTAA on the ground that it is not the beneficial owner of the musical tracks in respect of which the royalty income was earned. Thus, not entitled to concessional rate of tax at 10% under DTAA as held by the Assessing officer.
Unless the Assessing Officer assesses the income with reference to which he had formed a reason to believe within the meaning of Section 147 of the Act, it would not be open to him reassess or assess any other income chargeable to tax which has escaped assessment and comes to his notice in reassessment proceedings. In this case, admittedly the ground on which reassessment notice under Section 148 of the Act was issued was dropped while passing the reassessment order dated 27.03.2006 under Section 143(3) read with Section 147 of the Act. Thus, in view of the decision of this court in the matter of Jet Airways (I.) Ltd. (supra), no occasion to entertain the proposed question of law arises.
In the present case, the revisional authority had passed an order in revision on December 6, 2010. The application for rectification was not made before the Assessing Officer who passed the assessment order which was the subject-matter of revision but the application was made before the revisional authority itself for rectification. Such an application was maintainable and was not barred by section 154(1A). In these circumstances, we are of the view that the Commissioner of Income-tax has erred in declining to entertain the application for rectification.
Revenue submitted that any research and development activity carried out by the head office would automatically ensure to the benefit of the units/industrial undertakings. He submitted that the head office itself does not manufacture any medicines, the benefit of the research and development would be utilized for manufacturing the products and the products would obviously be manufactured by the units.
Applications for stay cannot be treated by the assessing officers or for that matter by appellate authorities as meaningless formalities. Quasi judicial authorities have to apply their mind in an objective and dispassionate manner to the merits of each application for stay. While the interest of the Revenue has to be protected, it is necessary for assessing officers to realize that fairness to the assessee is an intrinsic element of the quasi judicial function conferred upon them by law. Applications for stay must be disposed of at an early date.
Before concluding, we clarify that the observations in the present judgment are confined only to the disposal of the application for stay of the recovery of the demand against the Petitioner and shall not prejudice the rights and contentions of the assessees, the Petitioner and the Revenue in the pending appeals.
Respondent took a business decision not to honour its commitment of fulfilling the export entitlement in view of loss being suffered by it. The Assessing officer does not dispute this fact nor does he doubt the genuineness of the claim of the expenditure being for business purpose. In these facts the Tribunal held that respondent assessee has not contravened any provisions of law and thus the forfeiture of bank guarantee was compensatory in nature under Section 37(1) of the Act.
We find that both the Commissioner of Income Tax (Appeals) as well as the Tribunal have arrived at a finding of fact that Assessing officer did not have any reasonable belief to come to the conclusion that that there has been any escapement for the assessment year 2003-04. The order of MERC dated 01.07.2004 specifically deals with regard to fixing of the tariff rate at which power has to be supplied to the consumer.
