Eurofins Peenya Resources Private Limited (Formerly Known As Eurofins Advinus Limited) Vs DCIT (ITAT Bangalore)
Foreign Remittances Were Examined Once; AO Could Not Reopen on the Same Material
The Assessing Officer asked for details of foreign remittances during a scrutiny assessment. The company supplied transaction-wise particulars, including the nature of services and tax deducted at source. After examining the material, the AO completed the assessment without disallowing those payments. Could the assessment later be reopened because another tax officer took a different view of the same remittances? The Bangalore Tribunal held that such reopening amounted to a change of opinion and quashed the reassessment.
How the ₹16.92 crore disallowance arose
Eurofins Peenya Resources Private Limited carried on contract research and preclinical development work for pharmaceutical and related industries. It had made payments to non-resident vendors for items described as maintenance, legal and professional services, membership and subscriptions, and testing services.
In the original scrutiny assessment completed on 12 December 2018, the AO made an adjustment relating to provident fund and ESI contributions but made no disallowance of the foreign payments. Subsequently, the International Taxation Officer reported that payments of about ₹16.92 crore had been made without deduction of tax at source. Treating them as fees for technical services, the AO issued a notice under section 148 on 31 March 2021 and proposed disallowance under section 40(a)(i).
