Brief of the case:
The Hon’ble Delhi High Court in the case of HCL Technologies Ltd. held that completed cannot be reopened after the expiry of four years from the end of relevant assessment year unless the income escaped from tax is attributable to assessee’s failure to disclose full & true disclosure of the facts.
Facts of the case:
- The scrutiny assessment was completed under Sec 143(3) read with Sec 144C (13) on 28.10.2010. In the order of the said assessment the software license fee claimed by the assessee was allowed only to the extent of 25% (i.e. 25 % of 31.69 crores) and the remaining 75% was treated as capital assets capitalized under the block of computers on which 60% depreciation allowable. The assessee’s appeal was already pending before the ITAT challenging the original assessment order.
- The AO issued a notice under sec 148 seeking to reopen the assessment after the expiry of end of 4 years from the relevant AY. The assessment was re-opened for the reason that the software license fee is nature of intangible assets and not to form part of block of computers. Thus, the depreciation allowable only 25% and not 60%. Such excess allowance has resulted in escapement of income and to tap the same the assessment has been re-opened.
- The assessee objected to the above re-opening on the ground that since all the material facts have been disclosed during the assessment proceedings the AO cannot re-open the same in the absence of any new tangible material in the hand.
But the objections filed by the assessee was rejected by the AO. Consequently, the assessee filed a writ petition before the High Court praying to quash the order of AO.
Contention of Revenue:
Paid content
Become a Basic or Premium Member, or log in if you are already a Basic or Premium member.
