> v. The Additional Commissioner Of Income Tax, Transfer Pricing I Room No.c-420, Iv Floor, Main Building

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED : 21.06.2021CORAMTHE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAMW.P.Nos.7689 & 7690 of 2014andM.P.Nos.1 & 1 of 2014 W.P.No.7689 of 2014M/s.Aban Offshore Limited,Rep.by its Vice President-FinanceMr.Vijay Saheta113, Janpriya Crest,Pantheon Road, Egmore,Chennai – 600 008. ..Petitionervs The Additional Commissioner of Income Tax,Transfer Pricing IRoom No.C-420, IV Floor, Main Building,No.121, Mahatma Gandhi Road,Nungambakkam,Chennai – 600 034. ..Respondent Prayer: Writ Petition filed under Article 226 of theConstitution of India praying to issue a Writ of Certiorari,calling for the records in F.No.A-107/TPO-1/A.Y.2007-08 dated29.01.2014 relating to Assessment Year 2007-08 on the file ofthe respondent, quash the same and render justice. W.P.No.7690 of 2014 M/s.Aban Offshore Limited,Rep.by its Vice President-FinanceMr.Vijay Saheta113, Janpriya Crest,Pantheon Road, Egmore,Chennai – 600 008. ..Petitionervs The Deputy Commissioner of Income Tax,Company Circle I (1)VI Floor, New Block,No.121, Mahatma Gandhi Road,Nungambakkam,Chennai – 600 034. ..Respondent Prayer: Writ Petition filed under Article 226 of theConstitution of India praying to issue a Writ of Certiorari,calling for the records in PAN: /13-14/148 dated21.02.2014 relating to the Assessment Year 2007-08 on the fileof the respondent. For Petitione : Mr.G.Baskar [in both W.Ps] For Respondents : M/s.Hema Muralikrishnan Senior Standing counsel [For Income Tax] [in both W.Ps] COMMON ORDER W.P.No.7689 of 2014 The Writ Petition in W.P.No.7689 of 2014 is filed,challenging the order dated 29.01.2014, issued by the respondent/ Transfer Pricing Officer under Section 92CA(3) of the IncomeTax Act, 1961 [hereinafter referred to as 'the Act']. 2. The petitioner is a company, engaged in the business ofprovision of oil field services to various oil majors for offshore exploration and production of hydrocarbons in India andabroad. The petitioner is a regular assessee in terms of theprovisions of the Indian Income Tax Act, 1961. The petitionerfiled a return of income accompanied by all requireddocumentation in connection with the International transactionsentered into by the petitioner for the relevant financial year,being 2006-07. When the Return was taken up for completion underscrutiny, a reference was made in terms of Section 92 CA(1) ofthe Act by the Assessing Officer to the respondent to arrive atthe Arms Length Price in regard to the Internationaltransactions undertaken by the petitioner. Pursuant to thereference under Section 92CA (1), the determination of ArmsLength Price was taken up by the respondent, who after adetailed hearing and consideration of all materials furnished bythe petitioner, passed an order dated 29.10.2010, proposing anupward adjustment to the Arms Length Price as determined by therespondent. The order of the Transfer Pricing Officer dated29.10.2010 was duly forwarded to the Assessing Officer forincorporation in the order of assessment in terms of Section 94CA(4) of the Act. The Assessing Authority, the AdditionalCommissioner of Income Tax, Company Range-I, thus passed a finalorder of assessment dated 25.02.2011, making variousadditions/disallowances to the returned income as well asincorporating the upward adjustment determined by the TransferPricing Officer. The order of final assessment dated 25.02.2011was subject to statutory appeal, was now pending at the instanceof the Department in further appeal before the Income Tax Appellate Tribunal. Meanwhile, the proceedings for re-assessmentof the income in respect of the Assessment Year 2007-08, hasbeen initiated under Section 147 of the Act, which is challengedin the writ petition. Appellate Tribunal. Meanwhile, the proceedings for re-assessmentof the income in respect of the Assessment Year 2007-08, hasbeen initiated under Section 147 of the Act, which is challengedin the writ petition. 3. The petitioner received a notice dated 02.04.2013 underSection 92 CA (2) along with a questionnaire, calling upon thepetitioner to furnish certain documents and information inconnection with its international transactions. The Notice wasstated to be pursuant to a reference made under Section 92 CA bythe Assessing Officer. The petitioner responded to the saidnotice, pointing out that the reference under Section 92 CA iswholly bad in law in so far as the process of determination ofArms Length Price had already been undertaken and completed.Thus, the jurisdiction assumed by the respondent was challengedby the writ petitioner. It is contended that the TransferPricing had been taken up at the time of original assessment andhave been duly completed vide order of the Transfer PricingOfficer dated 29.10.2010. Thus, the petitioner was unaware ofthe basis of the re-issue of Notice under Section 92 CA by therespondent. 4. The learned counsel appearing on behalf of the writpetitioner strenuously contended that the impugned order dated29.01.2014 issued under Section 92 CA of the Act is bad in lawas there is no sanction under the provisions of the Income TaxAct. Action is not in compliance with the period of limitationand liable to be quashed. 5. To substantiate the said contention, the learned counselfor the petitioner solicited the attention of this Court withreference to Sub-Sections 2B and 2C of Section 92CA of theIncome Tax Act, 1961. Citing Sub-Section 2C of Section 92CA, thelearned counsel for the petitioner reiterated that theassessment in the present case was passed in the year 2011.However, the Transfer Pricing Officer passed an order on29.10.2010, which was duly forwarded to the Assessing Officerfor incorporation in the order of assessment and the AssessingOfficer also passed final order of assessment on 25.02.2011,making various additions/disallowances to the returned income aswell as incorporating the upward adjustment determined by theTransfer Pricing Officer. Therefore, under Sub Section 2C ofSection 92CA, the issuance of impugned order with reference tothe crucial date i.e., 1[st] day of July 2012 is unsustainable. Theprovision makes it clear that 'Nothing contained in Sub-Section(2B) shall empower the Assessing Officer either to assess orreassess under Section 147 or pass an order enhancing theassessment or reducing a refund already made or otherwiseincreasing the liability of the assessee under Section 154, for any assessment year, proceedings for which have been completedbefore the 1[st] day of July, 2012.' Thus, the very letter dated02.04.2013 from the Transfer Pricing Officer as well as theorder dated 29.01.2014, which is impugned in this writ petitionare beyond the limitation prescribed under Sub-Section 2C ofSection 92 CA and therefore, the impugned proceedings are liableto be set aside. 6. The learned counsel for the petitioner made a submissionthat the Audit Report had already been submitted under Section92-E of the Act and the transactions were came to the notice ofthe Transfer Pricing Officer during the course of theproceedings before him and he passed an order and forwarded thesame to the Assessing authority. Therefore, the action initiatedafter 1[st] day of July 2012 by issuing a notice dated 02.04.2013and passing an order under Section 92CA on 29.01.2014 arewithout jurisdiction and thus, bad in law. 6. The learned counsel for the petitioner made a submissionthat the Audit Report had already been submitted under Section92-E of the Act and the transactions were came to the notice ofthe Transfer Pricing Officer during the course of theproceedings before him and he passed an order and forwarded thesame to the Assessing authority. Therefore, the action initiatedafter 1[st] day of July 2012 by issuing a notice dated 02.04.2013and passing an order under Section 92CA on 29.01.2014 arewithout jurisdiction and thus, bad in law. 7. It is contended that all the procedures contemplatedunder the Act were duly complied with by the petitioner andbrought to the notice of the Assessing authority, who in turn,passed the assessment order on 25.02.2011. Therefore, furtheractions are untenable and beyond the scope of the provisions ofthe Act. 8. The learned Senior Standing counsel appearing on behalfof the respondents disputed the said contentions by stating thatthe provision under Section 92 CA and the Sub-Sections wereerroneously interpreted by the petitioner. It is an admittedfact that the petitioner furnished the Audit report underSection 92-E of the Act. Under these circumstances, Sub-Sections2B and 2C of Section 92 CA are to be read together cogently forthe purpose of understanding the provision and its implication.Only by relying Sub-Section 2C, the petitioner cannot say thatthe actions initiated are beyond the period of limitation i.e.,1[st] day of July 2012. 9. The learned Senior Standing counsel made a submissionthat the actions initiated against the petitioner is not on theground that the petitioner has not furnished the Audit Reportunder Section 92-E, but the letter of the Transfer PricingOfficer dated 02.04.2013, which clearly reveals that the case ofthe petitioner was referred to the Transfer Pricing Officerunder Section 92 CA by the Assessing Officer. The AssessingOfficer raised certain queries on account of initiation of re-opening proceedings under Section 147 of the Act and in order tocontinue the re-opening proceedings, the Assessing Officerreferred the matter to the Transfer Pricing Officer for certaininformations in terms of Section 92D and 92-E of the Act. Inthis regard, a questionnaire was also enclosed. Therefore, it is not an initiation by the Transfer Pricing Officer suo-motu underSub-Sections 2B of Section 92 CA of the Act. The limitationcontemplated under Sub-Section 2C would be applicable only incases, where the suo-motu action is initiated under Sub-Section2B, where, in respect of international transactions, theassessee has not furnished the report under Section 92-E andsuch transactions comes to the notice of the Transfer PricingOfficer during the course of the proceedings before him. Thus,only in the event of not furnishing the report under Section92CA of the Act and during the course of the proceedings, if anysuch transaction comes to the notice of the Transfer PricingOfficer, then he is empowered to initiate suo-motu proceedingsby invoking Sub-Sections 2B and 2C of Section 92CA. Only forsuch suo-motu initiation, the time limit of 1[st] day of July 2012is contemplated with reference to the final orders to be passedby the Transfer Pricing Officer. However, in the present case,the Transfer Pricing Officer passed an order on 29.10.2010itself. It was forwarded to the Assessing authority forincorporation in the order of assessment and the process wascompleted, the Assessing authority also passed the final orderof assessment on 25.02.2011. Thereafter, the Assessing Officerhad a reason to believe that the income chargeable to tax hasescaped assessment for the assessment year. Thus, the AssessingOfficer has initiated re-opening proceedings under Section 147and issued notice under Section 148 of the Act on 29.03.2012.Thus, a reference made by the Assessing Officer to the TransferPricing Officer, seeking certain informations would not fallunder the purview of the suo-motu power conferred to theTransfer Pricing Officer under Sub-Sections 2B and 2C of Section92CA of the Income Tax Act. 10. Considering the arguments as advanced on behalf of therespective parties to the lis on hand, this Court has toconsider the scope of Sub-Sections 2B and 2C of 92 CA of theIncome Tax Act. 11. Sub-Section 2B of Section 92 CA of the Act enumerates“Where any other international transaction [other than aninternational transaction referred under sub-section (1)], comesto the notice of the Transfer Pricing Officer during the courseof the proceedings before him, the provisions of this Chaptershall apply as if such other international transaction is aninternational transaction referred to him under Sub-Section(1)].” Therefore, in respect of an international transaction, ifthe assessee has not furnished the report under Section 92-E andany such transaction comes to the notice of the Transfer PricingOfficer during the course of the proceedings, then he caninitiate suo-motu proceedings. 11. Sub-Section 2B of Section 92 CA of the Act enumerates“Where any other international transaction [other than aninternational transaction referred under sub-section (1)], comesto the notice of the Transfer Pricing Officer during the courseof the proceedings before him, the provisions of this Chaptershall apply as if such other international transaction is aninternational transaction referred to him under Sub-Section(1)].” Therefore, in respect of an international transaction, ifthe assessee has not furnished the report under Section 92-E andany such transaction comes to the notice of the Transfer PricingOfficer during the course of the proceedings, then he caninitiate suo-motu proceedings. 12. Sub-Section 2C of 92 CA of the Acct contemplates that“Nothing contained in Sub-Section (2B) shall empower theAssessing Officer either to assess or reassess under Section 147or pass an order enhancing the assessment or reducing a refundalready made or otherwise increasing the liability of theassessee under Section 154, for any assessment year, proceedingsfor which have been completed before the 1[st] day of July, 2012.”Thus, it is clear that the Assessing Officer is not empowered toassess or re-assess by invoking Section 147 and pass an order,enhancing the assessment or reducing a refund already made withreference to Sub-Section 2B. Therefore, the Assessing Officercannot invoke the powers contemplated under Sub Section 2B forassessment or re-assessment under Section 147 of the Act andpass an order, enhancing the assessment or reducing a refundalready made or otherwise increasing the liability of theassessee under Section 154 for the Assessment Year proceedingsfor which have been completed before the 1[st] day of July 2012.Thus, Sub-Section 2C of Section 92CA is related to Sub-Section2B of Section 92CA. In other words, if the assessee has notfurnished the Audit report under Section 92-E in respect of aninternational transaction, if any such international transactioncomes to the notice of the Transfer Pricing Officer, during thecourse of the proceedings, then he can initiate Suo-motuproceedings to pass final orders in the Transfer Pricing. 13. Sub-Section 2C of Section 92 CA contemplates that “Nothing contained in Sub-Section (2B) shall empower theAssessing Officer either to assess or reassess under Section147.” It is pertinent to note that the Assessing Officer in thepresent case has not invoked either Sub-Section 2B or Sub-Section 2C of Section 92 CA. The Assessing Officer re-opened theproceedings by invoking Section 147 and a notice was issuedunder Section 148 of the Act and thereafter, the AssessingOfficer sought for certain informations from the TransferPricing Officer, who in turn, sent a letter to the petitioner /assessee on 02.04.2013 to clarify certain queries. Based on theinformation collected from the assessee / petitioner, theTransfer Pricing Officer passed an order on 29.01.2014 and sentthe same to the Assessing Officer. Therefore, the entireexercise done by the Transfer Pricing Officer and the AssessingOfficer are not within the scope of Sub-Section 2B of Section 92CA. Sub-Section 2B is specifically applicable only in cases,where the assessee has not furnished the Audit report underSection 92-E and any transaction comes to the notice of theTransfer Pricing Officer. However, in the present case,admittedly, the petitioner had filed the Audit Report underSection 92-E, which was considered by the Transfer PricingOfficer, who in turn, passed the final order and the final orderwas communicated to the Assessing authority, who in turn, alsopassed an assessment order. Therefore, the clarifications or further informations sought for by the Assessing Officer in re-opening proceedings under Section 147, to cull out certain truthor to understand transactions, if any escaped, the same cannotbe construed as falling within the ambit of Sub-Section 2C ofSection 92 CA, wherein a limitation is prescribed. When theactions initiated by the Assessing Officer and the informationssought for from the Transfer Pricing Officer would not fallunder the scope of Sub-Section 2B or 2C of Section 92CA and thelimitation contemplated under Sub-Section 2C would not beapplicable in the present case. Thus, the arguments advanced bythe petitioner in the present case deserves to be rejected. 14. Section 147 of the Act though referred under Sub-Section2C, the same must be read along with Sub-Section 2B of Section92CA of the Act. Sub-Section 2C cannot be read independently forthe purpose of understanding the difference between re-openingof assessment contemplated under Section 147 and the suo-motupowers conferred to the Transfer Pricing Officer under Sub-Section 2B of Section 92 CA. Section 147 is a special provisionfor re-opening of assessment regarding the income escapedassessment. Various circumstances are contemplated for re-opening of assessment. The very concept of “reason to believe”inserted by way of an amendment would provide wider scope to theAssessing Officer to re-open the assessment, in the event ofidentifying any income escaped assessment. While re-opening theassessment, the Assessing Officer is of an opinion that furtherclarifications or informations are required from the TransferPricing Officer or from any other authority, he is empowered toseek any such clarifications, informations or details for thepurpose of effective adjudication of re-opening proceedingsinitiated under Section 147 of the Act. Thus, the very spirit ofSub-Section 2C must be read along with Sub-Section 2B of Section92 CA, which contemplates only in cases, where the assessee hasnot furnished Audit report under Section 92-E of the Act and ifthe Transfer Pricing Officer identified any transaction, heshall initiate suo-motu proceedings for Transfer Pricing. Thus,the letter sent by the Assessing Officer, seeking informationsand details would not fall under Sub-Section 2B. The TransferPricing Officer for the purpose of collecting informations anddetails, provided an opportunity to the writ petitioner,received reply, documents and thereafter, passed an order andcommunicated the same to the Assessing Officer. The said processundertook by the Assessing Officer on re-opening of assessmentproceedings would not fall under Sub-Section 2B or Sub-Section2C of Section 92 CA of the Act. 15. Section 147 of the Act contemplates that if theAssessing Officer “has reason to believe” that any incomechargeable to tax has escaped assessment, he can assess orreassess. 15. Section 147 of the Act contemplates that if theAssessing Officer “has reason to believe” that any incomechargeable to tax has escaped assessment, he can assess orreassess. 16. Section 2 of the Income Tax Act provides 'Definitions'.Sub-Section 8 of Section 2 defines the word “Assessment”, whichincludes reassessment. Thus, when the assessment includesreassessment, the reassessment proceedings can be undertaken byseeking further clarifications or informations from theconcerned authorities of the Department. When the assessmentincludes reassessment, the Assessing Officer while conductingthe reassessment proceedings, is undoubtedly empowered to seekfurther informations or details to cull out the truth and thevery purpose and object of reassessment contemplated underSection 147 of the Act is to ensure that the assessee pay thetax as applicable. The original assessment is made pursuant tothe return of income filed by the assessee. The scope ofscrutiny or enquiry at the time of original assessment isentirely different. Thus, in the event of re-opening ofassessment and during re-assessment, the authorities competentnecessarily have to cull out more details and informations fromthe authorities concerned for the purpose of ascertaining thetruth regarding the tax escaped assessment. Therefore, thepurpose of Section 147 for re-opening of assessment cannot berestricted nor the power of reassessment of the Assessingofficer for collecting the evidences or materials orinformations from the authorities concerned cannot be crippleddown by wrongly interpreting the other provisions of the IncomeTax Act. Constructive interpretation is imminent in suchcircumstances in order to ensure that the purpose and object ofthe Act is met with in its letter and spirit. 17. This apart, the impugned order is not a suo-motuproceedings initiated by the Transfer Pricing Officer under Sub-Section 2B of Section 92CA of the Act and therefore, Sub-Section2C of Section 92CA of the Act would not be applicable. Thecircumstances contemplated under Sub-Section 2B of Section 92 CAis not applicable in the present case, in view of the fact thatthe petitioner admittedly submitted the Audit Report underSection 92-E of the Act. 18. In this view of the matter, this Court is of theconsidered opinion that there is no infirmity or perversity assuch in respect of the order impugned passed by the TransferPricing Officer with regard to the reference made by theAssessing Officer regarding certain international transactionsor otherwise. 19. Thus, the petitioner has not established any acceptableground for the purpose of considering the relief as such soughtfor in the present writ petition and consequently, the writpetition in W.P.No.7689 of 2014 is to be dismissed. W.P.No.7690 of 2014 20. The Writ Petition is filed, challenging the order dated21.02.2014, disposing of the objections filed by the petitioner. 21. The return of income for the Assessment Year 2007-08 wasfiled by the petitioner on 31.07.2007. It was taken up fordetailed scrutiny by the respondent. Reference under Section92CA of the Act was issued to the Transfer Pricing Officer fordetermination of Arms Length Price with reference to variousinternational transactions entered into by the petitioner withAssociated Enterprises. Subsequently, upon assignment of theassessment by the Commissioner of Income Tax to the AdditionalCommissioner of Income Tax, notices were issued by theAdditional Commissioner of Income Tax for completion of theassessment. The particulars sought for and the materialsrequired were submitted by the petitioner. In addition, noticesunder Section 143(2) and questionnaire in terms of Section 142(1) were issued. The petitioner also responded to the same. 22. The petitioner challenged the initiation of proceedingsunder Section 147 of the Act on the ground that it is nothing,but change of opinion and reassessment proceedings amount toassumption of jurisdiction. Reassessment proceedings are basedon different view adopted by the Income Tax Department forsubsequent periods and thus, evidently not based on any new ortangible material. Thus, the reassessment proceedings are bad inlaw and contrary to the statutory provisions. The assessment inrespect of the Assessment Year 2007-08 was completed and anorder was passed on 25.02.2011, after taking detailed scrutiny.Issue of grant of tax credit has been considered in detail and aview taken by the Assessing Officer became final. Thus, theimpugned proceedings for reassessment are based on change ofopinion and therefore, not in consonance with the requirementscontemplated under Section 147 of the Act. 23. This Court is of the considered opinion that aquestionnaire under Section 142(1) of the Act was issued.Questions were asked to prove how each loan has been utilized(End utilization of fund) for the purpose of 14 A disallowance.Further, to show cause and prove the foreign currency payments(as per notes to accounts) TDS has been remitted. The petitioneralso furnished all the details along with the documents to provethe same. The assessment order was passed during the year 2011with reference to the Assessment Year 2008-09 and a final orderof assessment was passed on 25.02.2011 in respect of theAssessment Year 2007-08. 24. The learned counsel for the petitioner contended that adetailed scrutiny was conducted. The FCCB issue expenses wereelaborately considered by the Assessing Officer in the original assessment order and income from other sources were alsoconsidered and therefore, the Assessing Officer, after scrutiny,formed an opinion and made a finding with reference to thepoints now raised for re-opening of assessment. Thus, the entireexercise of initiation of proceedings under Section 147 ischange of opinion and therefore, contrary to the requirementscontemplated under the Act. After passing such an elaborateorder in proceedings dated 29.03.2012, notice under Section 148of the Income Tax Act was issued. Thereafter, the petitionerrequested for reasons. The reasons for re-opening of assessmentwas communicated to the petitioner in proceedings dated26.12.2013. The petitioner filed objections and in the saidobjections, the petitioner has categorically stated that thereason for re-opening of assessment is based on change ofopinion as the entire details and the issues were adjudicated bythe Assessing Officer and the assessment order was passed andthere is no tangible materials made available for the AssessingOfficer for re-opening the assessment by invoking Section 147 ofthe Act. However, the respondents disposed of the objections inproceedings dated 21.02.2014 without assigning proper reasons.Thus, the petitioner is constrained to move the present writpetition. 25. The learned Senior Standing counsel raised an objectionby stating that the procedures contemplated under Section 147 ofthe Act has been scrupulously followed by the respondents. Thereasons furnished for re-opening of the assessment is not basedon change of opinion, but based on certain informations,inferences and materials. Thus, there is no impediment for theAssessing Officer to re-open the assessment and passreassessment order. The production of account books, particularsor informations by the petitioner is insufficient to prevent theAssessing Officer from re-opening of the assessment proceedings.The re-opening of assessment shall be done on various groundsand the 'Phraseology' “has reason to believe” is interpreted,so as to cover numerous possible circumstances, wherein anyincome chargeable to tax escaped assessment. Therefore, mereproduction of account details, scrutiny during the originalassessment are insufficient nor such a finding in the originalorder is an impediment for the Assessing Officer to re-open theassessment under Section 147 of the Act. 26. This Court is of the considered opinion that Explanation1 to Section 147 enumerates that 'Production before theAssessing Officer of account books or other evidence from whichmaterial evidence could with due diligence have been discoveredby the Assessing Officer will not necessarily amount todisclosure within the meaning of the foregoing proviso.'Explanation 2, Sub Clause (c) of Section 147 states that wherean assessment has been made, but income chargeable to tax has been underassessed, then also re-opening is permissible.Therefore, even in such cases, where the Assessing Officerformed an opinion in respect of particular issue and an underassessment is identified, then also, the power conferred underSection 147 of the Act shall be invoked. 27. However, all these facts and circumstances are to beadjudicated before the Assessing officer, and a Roving Enquirycannot be conducted in a writ proceedings, with reference todocuments and evidences. However, High Court has to ascertain,whether there is a prima-facie case for re-opening of assessmentby invoking Section 147 of the Income Tax Act. In the presentcase, the reason stated for re-opening of assessment reads asunder: “Meanwhile, the relevant assessment record wasrequisitioned by the CBI, Chennai and the file wassent to them by April, 2013 and is still in theircustody. Hence, your request vide letter dated15.04.2013 could not acted upon in the absence of therelevant file. A request was made to the CBI to makeavailable the relevant file for continuation of theproceedings and the CBI has now sent a copy of theentire file. As such, the reasons recorded forreopening of assessment is extracted as under: The assessment for the AY 2007-08 hasbeen completed u/s.143(3) r.w.s.144C on25.02.2011. It is found from records that theassessee company has claimed credit for anamount of Rs.2,10,90,680/- being withholdingtax deducted by Singapore Tax authorities inrespect of the interest income ofRs.21,12,56,136/- earned by the assessee fromM/s.Aban Holdings Pte Ltd, a Singaporeregistered company. In the order u/s.143(1)as well as 143(3), the amount ofRs.2,10,90,680/- has been given credit asTDS. The claim of the assessee for credit forwithholding tax paid in Singapore cannot beallowed as TDS. It is apparent that theamount lent to the Singapore company wasactually borrowed by the assessee company andinterest expenditure on money borrowed hasalso been claimed resulting in no realinterest income on netting. Hence, in theabsence of real interest income offered inIndia, relief u/s.90 of the I.T.Act, 1961 onthe tax withheld at Singapore may also be notavailable. As such, I have reason to believethat the income has escaped assessment andhence the assessment needs reopened u/s.147.” 28. Pertinently, the reason for re-opening reveals that theclaim of the assessee for credit for withholding tax paid inSingapore cannot be allowed as TDS. It is apparent that theamount lent to the Singapore company was actually borrowed bythe assessee company and interest expenditure on money borrowedhas also been claimed resulting in no real interest income onnetting. Hence, in the absence of real interest income offeredin India, relief under Section 90 of the Income Tax Act, 1961 onthe tax withheld at Singapore may also be not available. Thus,the Assessing Officer has reason to believe that the income hasescaped assessment. Such a finding is relevant for the purposeof constituting a Prima-facie case for re-opening of assessmentby invoking Section 147 of the Act. The petitioner has to defendhis case by availing the opportunities to be provided by theDepartment in this regard. 29. As discussed above, during the process of re-opening,the Assessing Officer requested details and informations fromthe Transfer Pricing Officer and the report in this regardfurnished by the Transfer Pricing Officer is also to beconsidered and a final order of assessment is to be passed asexpeditiously as possible by following the procedurescontemplated and by affording opportunity to the petitioner /assessee. 30. This being the factum established, the writ petitionerhas not made out any acceptable ground for the purpose ofassailing the order impugned passed by the respondent andconsequently, the writ petition in W.P.No.7690 of 2014 is to bedismissed. 31. In the result, both the writ petitions filed inW.P.Nos.7689 & 7690 of 2014 stand dismissed. No costs. Connectedmiscellaneous petitions are closed. Sd/- Assistant Registrar(CS VII) //True Copy// Sub Assistant Registrar Kak To1.The Additional Commissioner of Income Tax, Transfer Pricing I, Room No.C-420, IV Floor, Main Building, No.121, Mahatma Gandhi Road, Nungambakkam,Chennai – 600 034. 2.The Deputy Commissioner of Income Tax, Company Circle I (1), VI Floor, New Block, No.121, Mahatma Gandhi Road, Nungambakkam, Chennai – 600 034. +2ccs to Mr.G.Basker, Advocate SR.No. 28684, 28686+1cc to Ms.Hema Murali Krishnan, Standing Cousel SR.No. 28691W.P.No.7689 & 7690 of 2014GPL(CO) B.VC(16.07.2021)