IFS Solutions India Private Limited v. Assistant Commissioner of Income-tax, Circle 12(1)
[Citation -2017-LL-0911-6]

Citation 2017-LL-0911-6
Appellant Name IFS Solutions India Private Limited
Respondent Name Assistant Commissioner of Income-tax, Circle 12(1)
Court HIGH COURT OF DELHI AT NEW DELHI
Relevant Act Income-tax
Date of Order 11/09/2017
Assessment Year 2009-10
Judgment View Judgment
Keyword Tags payment of interest • tax evasion • notice for reopening of assessment
Bot Summary: The AO has noted therein that on examining the records it was found that the Assessee had debited an amount of Rs. 1,08,67,187/- in its PL account towards interest as against Rs. 11,582/- claimed in the immediately preceding AY i.e. AY 2008-09. The AO noted that neither had the Assessee furnished any details nor had the AO any occasion to verify the said amount of interest debited in the PL account. The AO further noted that information had been received from the Investigation Wing of the Income Tax Department, New Delhi on the basis of a Tax Evasion Petition received against the Assessee. The AO extracted a portion of the report of the Investigation Wing which doubted the genuineness of the interest payments made by the Assessee. The Court is unable to find any reference in the reasons to any tangible material which, was failed to be disclosed by the Assessee, and which could form the basis of the AO s reasons to believe that income had escaped W.P.(C) 11262/2016 Page 2 of 4 assessment. Although there is an assertion in the reasons that the Assessee had not furnished the relevant details regarding the payment of interest, the Court finds that the said assertion is factually incorrect. In the course of the original assessment proceedings, a questionnaire was issued by the AO to the Assessee, in which a specific question was raised as regards the payment of interest.


IN HIGH COURT OF DELHI AT NEW DELHI W.P. (C) No. 11262/2016 IFS SOLUTIONS INDIA PRIVATE LIMITED ..... Petitioner Through : Mr. Gagan Kumar, Mr.Amit Kaushik, Advocates. versus ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 12(1) ..... Respondent Through : Mr. Asheesh Jain, Senior Standing Counsel for Income Tax Department with Mr.Vikrant A. Maheshwari, Advocate. CORAM: JUSTICE S. MURALIDHAR JUSTICE PRATHIBA M. SINGH ORDER 11.09.2017 1. This is writ petition seeking quashing of notice dated 30th March 2016 issued to Petitioner under Section 148 of Income Tax Act, 1961 ( Act ) by Deputy Commissioner of Income Tax, Circle 12 (1), New Delhi (hereafter Assessing Officer - AO ) for Assessment Year ( AY ) 2009-10. 2. facts, which are not in dispute, are that original assessment was completed after scrutiny of return under Section 143 (3) of Act on 23rd December, 2011. Further, reopening of assessment is sought to be made after expiry of four years from end of relevant AY. W.P.(C) 11262/2016 Page 1 of 4 Consequently, first proviso to Section 147 of Act applied. In other words, in order to justify reopening of assessment, AO had to show that there was failure on part of Assessee to disclose fully and truly all material facts necessary for assessment, for that assessment year . 3. reasons recorded by AO for reopening of assessment have been perused. AO has noted therein that on examining records it was found that Assessee had debited amount of Rs. 1,08,67,187/- in its P&L account towards interest as against Rs. 11,582/- claimed in immediately preceding AY i.e. AY 2008-09. AO noted that neither had Assessee furnished any details nor had AO any occasion to verify said amount of interest debited in P&L account. AO further noted that information had been received from Investigation Wing of Income Tax Department, New Delhi on basis of Tax Evasion Petition ( TEP ) received against Assessee. report of Investigation Wing stated that huge amount of interest was paid to various foreign companies in FY 2008-09. AO extracted portion of report of Investigation Wing which doubted genuineness of interest payments made by Assessee. exact words in report reads, Hence, claim of interest expense of Rs. 1,08,67,187/- in FY 2008-09 appears to be suspicious and correlates with facts of complaint. 4. Court is unable to find any reference in reasons to any tangible material which, was failed to be disclosed by Assessee, and which could form basis of AO s reasons to believe that income had escaped W.P.(C) 11262/2016 Page 2 of 4 assessment. There is no mention of which material facts were failed to be disclosed by Assessee. 5. Although there is assertion in reasons that Assessee had not furnished relevant details regarding payment of interest, Court finds that said assertion is factually incorrect. In course of original assessment proceedings, questionnaire was issued by AO to Assessee, in which specific question was raised as regards payment of interest. In reply thereto, Assessee, by letter dated 12th October 2011, addressed to AO furnished details of creditors and their addresses. 6. Mr. Asheesh Jain, learned Senior Standing Counsel for Revenue, submitted that break-up of payments made to creditors was not furnished by Assessee and therefore could not be verified by AO. 7. Court is unable to agree with above submission. Nothing prevented AO from undertaking detailed inquiry into list of creditors provided by Assessee in response to questionnaire. It is not for Assessee to suggest to AO how he should conduct inquiry. There was no failure by Assessee to fully and truly disclose all material facts necessary for assessment. 8. In that view of matter, since pre-requisites for assumption of jurisdiction under Section 147 of Act were not fulfilled, Court has no hesitation in quashing impugned notice dated 30th March 2016 issued to Petitioner by AO under Section 148 (1) of Act and all W.P.(C) 11262/2016 Page 3 of 4 proceedings consequent thereto. 9. writ petition is allowed in above terms with no order as to costs. S. MURALIDHAR, J. PRATHIBA M. SINGH, J. SEPTEMBER 11, 2017 j W.P.(C) 11262/2016 Page 4 of 4 IFS Solutions India Private Limited v. Assistant Commissioner of Income-tax, Circle 12(1)
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