JOSHI TECHNOLOGIES INTERNATIONAL INC V. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE (INT. TAXN) 1, AHMEDABAD

SCA/18180/2021

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The case involved Joshi Technologies International Inc, a foreign company with a project office in India, challenging a notice issued by the Assistant Commissioner of Income Tax under Section 148 of the Income-Tax Act. The notice sought to reopen the assessment for the year 2014-15, alleging that the income had escaped assessment. The petitioner argued that the reopening was beyond the permissible period and that there was no failure on their part to disclose material facts. The case was presented before the High Court of Gujarat, where the petitioner, represented by Mr. B S Soparkar, decided to withdraw the petition.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 749492 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 07-12-2021
• Assessment Year: misc
• Other Referred Cases: Parashuram Pottery Works Co. Ltd. vs. Income-tax Officer, Shree Bansidhar Spg. & Wvg. Mills (P.) Ltd. vs Income-tax Officer
• Laws Referred To: Income-Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: B S SOPARKAR
• Keywords: Assessment Year 2014-15; Foreign company; Income Tax; Jurisdiction; Notice; Reopening of assessment
• Section: 148; 143(3); 144(C); 35(i)(ii)

Judgement Text

"C/SCA/18180/2021 ORDER DATED: 07/12/2021 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 18180 of 2021 ========================================================== JOSHI TECHNOLOGIES INTERNATIONAL INC Versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE (INT. TAXN) 1, AHMEDABAD ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 for the Respondent(s) No. 1 ========================================================== CORAM: HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MS. JUSTICE NISHA M. THAKORE Date : 07/12/2021 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. The petitioner is before this Court under Article 226 of the Constitution of India challenging the notice issued by the respondent under Section 148 of the Income-Tax Act dated 31.03.2021 directing the petitioner to furnish the return of income for the assessment year 2014-15 on the ground that the assumption of jurisdiction itself is bad in law. 2. The petitioner is a foreign company having project office in India as per the approval of the Reserve Bank of India which is engaged in the business of extraction of crude petroleum and natural gas and having its tax residence in the United States. It has filed its original return of income for the Page 1 of 4 C/SCA/18180/2021 ORDER DATED: 07/12/2021 assessment year 2014-15 on 29.11.2014 declaring the total income of Rs. 104,83,51,430/-. The revised return of income was filed on 31.03.2016 at Rs. 67,42,11,740/-. 2.1. The petitioner’s case was selected for scrutiny assessment relating to the payment under Section 35(i)(ii) on 24.11.2016. This has been replied to by the petitioner on 01.12.2016 and 08.12.2016. The order of assessment was passed on 15.02.2017 under Section 143(3) read with Section 144(C) of the Income-Tax Act determining the income at Rs. 130,80,53,520/-. 2.2. A notice came to be issued on 06.10.2020 where the petitioner was asked to furnish the details such as nature of expanses incurred under Section 35(i)(ii) of the Income-Tax Act, names, PAN and addresses of the parties to whom the payments were made. The petitioner made payment of Rs.65,00,000/- to Shri Arvindo Institute of Applied Scientific Research as contribution towards expenditure of Thalassemia project of the trust and against the said donation assessee has claimed weighted deduction under Section 35(i)(ii) of the IT Act amounting to Rs. 1,13,75,000/-. 2.3. The respondent issued notice under Section 148 on 31.03.2021 seeking to reopen the assessment for the Page 2 of 4 C/SCA/18180/2021 ORDER DATED: 07/12/2021 assessment year 2014-15. The reasons have furnished for reopening vide letter dated 11.05.2021 which had been objected to on 25.05.2021 and on 15.11.2021 the respondent disposed of the objections which are under challenge before this Court with the following prayers: - “(a) quash and set aside the impugned notice at Annexure A to this petition; (b) quash and set aside the impugned order at Annexure H to this petition; (c) pending the admission, hearing and final disposal of this petition, to stay implementation and operation of the notice at Annexure A to this petition and stay further proceedings for assessment for A.Y. 2014-15; (d) any other and further relief deemed just and proper be granted in the interest of justice; (e) to provide for the cost of this petition.” 3. We have heard learned advocate Mr. B.S.Soparkar appearing for the petitioner who has extensively taken us through the law and according to him, this is purely a question of law which arises for consideration as the reopening is beyond a period of four years and the reasons recorded do not, in any manner, say that there was anything that had been done on the part of the petitioner – assessee which has led to the income escaping the assessment. In absence of failure disclosed fully and truly all material facts, Page 3 of 4 C/SCA/18180/2021 ORDER DATED: 07/12/2021 any reopening beyond a period of four years from the end of the assessment year 2014-15 is unsustainable. There is no whisper of the failure of the part of the petitioner of the true and full disclosure in the reasons which have been furnished and therefore, the petitioner has to be considered as a victim and with that being clear in the mind of the revenue also, this notice has been issued, and hence, this requires indulgence. 3.1. He has also supported his submissions with follwoing two authorities: - (i) Parashuram Pottery Works Co. Ltd. vs. Income-tax Officer [[1977] 106 ITR 1 (SC)]; (ii) Shree Bansidhar Spg. & Wvg. Mills (P.) Ltd. vs Income- tax Officer [[1980] 3 Taxman 576 (Gujarat)]. 4. At this stage, learned advocate Mr. Soparkar seeks withdrawal of this petition. 5. The present petition stands disposed of as withdrawn. (SONIA GOKANI, J) (NISHA M. THAKORE,J) Bhoomi Page 4 of 4 "