Genesys International Corp. Ltd. Vs ACIT (Bombay High Court)
The petition concerned assessment year 2015-16. The petitioner challenged a notice dated 30.03.2021 issued under Section 148 of the Income-tax Act, the order dated 08.02.2022 rejecting its objections to reopening, and the draft assessment order dated 14.03.2022.
The petitioner had filed its return of income on 30.11.2015. Following a notice under Section 142(1) dated 10.07.2017 and consideration of the petitioner’s reply, the Assessing Officer completed the original assessment on 20.12.2017.
After expiry of four years from the end of the relevant assessment year, the Assessing Officer issued the impugned Section 148 notice dated 30.03.2021. Reasons for reopening were first supplied on 20.05.2021. The petitioner filed objections on 24.06.2021. The reasons were subsequently furnished again by letter dated 04.08.2021, with the only difference being omission of paragraph 5 from the earlier communication.
The reasons for reopening concerned the petitioner’s deduction under Section 10AA. The reasons stated that the petitioner had losses from its Seepz and Bangalore undertakings amounting to Rs.7,40,45,748/- and taxable profit from Genesys Worldeye Seepz of Rs.11,81,19,853/-, against which exemption under Section 10AA of Rs.5,86,12,505/- had been claimed. The Assessing Officer relied upon Circular No. 7/DV/2013 dated 16.07.2013 and stated that the losses of ineligible units should first have been set off against the profit of the eligible unit before computing the Section 10AA deduction. The reasons alleged that this resulted in excessive allowance of loss of Rs.1,45,38,400/- and stated that there had been a failure to disclose fully and truly all material facts.
