EUROFINS PEENYA RESOURCES PRIVATE LIMITED (FORMERLY KNOWN AS EUROFINS ADVINUS LIMITED),BANGALORE vs. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(1) , BANGALORE

ITA 1116/BANG/2023Status: DisposedITAT Bangalore28 September 2026AY 2016-1723 pages
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What were the facts?

The assessee, Eurofins Peenya Resources Private Limited (formerly Eurofins Advinus Limited), filed an appeal against the order of the National Faceless Appeal Centre (NFAC), Delhi, for assessment year 2016-17. The NFAC had dismissed the assessee's appeal against an assessment order dated March 29, 2022, passed by the National Faceless Assessment Centre (NFAC), Delhi, under section 144 read with section 147 of the Income-tax Act, 1961. The reassessment concerned disallowances related to payments made to foreign vendors for AMC and maintenance, legal and professional charges, membership and subscription, and testing charges, due to alleged non-deduction of TDS. The assessee contended that these issues were already considered in the original assessment under section 143(3) and that the reopening under section 147 was based on a mere change of opinion.

What did the Tribunal hold?

The Tribunal quashed the assessment order dated March 29, 2022, passed under section 147 read with section 144B of the Income-tax Act, 1961, allowing ground No. 2.4 of the appeal. The Tribunal found that the Assessing Officer reopened the assessment on the same information that was available and considered during the original assessment under section 143(3), where no adjustment was made on the issue of foreign payments. Therefore, the reassessment rested solely on a change of opinion, which is impermissible under section 147. The Tribunal noted that the Assessing Officer had specifically sought details of remittances to non-residents and tax deducted at source during the original assessment, and the assessee had furnished the information. The assessment order indicated that the Assessing Officer verified the information but made no addition or disallowance, demonstrating that he had applied his mind to the issue. Grounds 1.1, 2.2, 2.3, and 10 were dismissed as general or not argued. Ground 3, alleging violation of natural justice, was dismissed for lack of specific instances. Grounds 4-7, concerning the taxability of foreign payments, were dismissed as the appeal against the order under section 201 was still pending before the CIT(A), and deciding these issues would render that appeal infructuous. Ground 8 became infructuous. Ground 9, concerning the carry-forward of loss under section 72, was allowed to the extent that the assessee was directed to substantiate its claim before the Assessing Officer for verification and determination of the eligible loss.

What were the issues?

1. Whether the reassessment proceedings initiated under section 147 of the Income-tax Act, 1961, pursuant to a notice issued under the erstwhile provisions before 01.04.2021, can be continued on or after 01.04.2021, in the absence of legislative intent to preserve pre-existing provisions (Section 147). 2. Whether the Assessing Officer erred in reopening the assessment under section 147 on a mere change of opinion, when the foreign payments made for AMC and maintenance charges, legal and professional charges, membership & subscription charges, and testing charges were already a subject matter of scrutiny assessment under section 143(3) (Section 147). 3. Whether the Assessing Officer erred by not appreciating that the disallowance of payments to foreign vendors for non-deduction of TDS is a subject matter of appeal before the Commissioner of Income Tax (Appeals) filed against the order under section 201 for the same assessment year, thus violating the third proviso to erstwhile section 147 (Section 147). Assessee's contentions: The reassessment proceedings initiated under the old provisions cannot continue after 01.04.2021 without legislative intent. The reopening was based on a change of opinion as the foreign payments were already examined in the original assessment under section 143(3) without any disallowance. The issue of TDS on foreign payments is already pending before the CIT(A) against an order under section 201, and reopening under section 147 on this matter is impermissible. The payments were not taxable as fees for technical services under the Act or DTAA, and the 'make available' condition was not satisfied. The CIT(A) failed to provide cogent reasons and passed a mechanical order, violating principles of natural justice. The loss to be carried forward under section 72 was incorrectly computed. Revenue's contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 144B,Section 250,Section 143(3),Section 142(1),Section 263,Section 201,Section 9(1)(vii),Section 40(a)(i),Section 72

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, BANGALORE BENCHES, BANGALORE

Before: SHRI PRASHANT MAHARISHI & SHRI SOUNDARARAJAN K.

PER SHRI PRASHANT MAHARISHI, VICE PRESIDENT

01.

Eurofins Peenya Resources Private Limited, formerly known as Eurofins Advinus Limited (the assessee/appellant), filed this appeal against the Appellate order of the National Faceless Appeal Centre (NFAC), Delhi (the learned CIT(A)), for assessment year 2016–17. The learned CIT(A) dismissed th

The order continues below.

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