The power vested in the Commissioner to grant or not to grant approval is coupled with a duty. The Commissioner is required to apply his mind to the proposal put up to him for approval in the light of the material relied upon by the Assessing Officer.
In this case reasons recorded for reopening indicate is that cash deposits aggregating to Rs 10,24,100 have been made in the bank account of the assessee, but the mere fact that these deposits have been made in a bank account does not indicate that these deposits constitute an income which has escaped assessment.
Assessee, a US company, entered into agreements with various customers in India for rendering software services – Assessing Officer held that payments received by assessee from sale of software and provision of maintenance and other support services to customers in India
The factual matrix of the present case is that there was a criminal case against the assessee with an allegation of custom duty evasion and he incurred impugned expenditure of legal fees for hiring lawyers to represent his criminal case before the Hon’ble High Court and Lower Courts to get the bail order.
As per record, we find that there was no notice issued u/s. 143(2) of the I.T. Act which is very much essential for reassessment and it is a failure on the part of the AO for not complying with the procedure laid down in section 143(2) of the I.T. Act.
Finding of the AO that in the absence of audit report, the enhanced claim is not maintainable over looks this factual position. It is undisputed that audit report for the enhanced claim had been furnished during the impugned 153A assessment proceedings along with Profit and Loss account and Balance sheet duly certified by the Accountant.
Assessee had declared an income by filing its return. The said return was selected for scrutiny through CASS on the basis of AIR. Assessment u/s 144 was made, resulting in an addition of Rs. 28,50,000/- as the assessee was found to have failed to explain the source of investment.
Assesee claimed deduction of Rs. 1.33 crores under Section 10A of the Act. On being called upon to explain about the eligibility of deduction, the assessee stated that it was entitled to deduction in view of fulfillment of all the requisite conditions as prescribed under Section 10A.
Merely because a notice u/s 143(2) had already been issued and the assessee filed revised return thereafter, disclosing additional income towards capital gains, which was not correctly shown in the original return, does not tantamount to detection of concealment of income u/s. 271(1)(c) of the Act .
Learned counsel for the assessee has invited our attention to Hon’ble Delhi High Court’s decision in the case of CIT Vs Holcim India Pvt Ltd [ 2014 TIOL 1586 HC DEL IT] wherein it is held that unless there is an exempt income, disallowance under section 14A cannot be invoked.
