[2023] 148 taxmann.

com 185 (Bombay)[08-03-2023]

INCOME TAX : Where assessment was sought to be reopened in case of assessee on

ground that assessee was charging lower commission rates to its sister concern /
related party, thereby resulting in lesser revenues and leading to lower tax liability and
eventually resulting into escapement of income, however, issue with regard to
transactions with all parties had been gone into by Assessing Officer and there was
no new tangible material to justify reopening, reassessment proceedings being a case
of change of opinion were not justified

■■■

[2023] 148 taxmann.com 185 (Bombay)

HIGH COURT OF BOMBAY
Jetair (P.) Ltd.
v.
Deputy Commissioner of Income-tax, Central Circle-5(2)
DHIRAJ SINGH THAKUR AND KAMAL KHATA, JJ.
WRIT PETITION NOS. 1901, 1996, 2393, 2828 AND 3446 OF 2022
MARCH 8, 2023

Section 36(1)(ii), read with section 148, of the Income-tax Act, 1961 - Bonus or commission -
(Reassessment) - Assessment years 2013-14 - 2015-16 - Assessee was sole General Sales
Agent (GSA) for Jet Airways as also sales agent for various other airline companies for which
assessee received commission on domestic and international ticket sales for passengers and
cargo transport - Assessment was sought to be reopened by Assessing Officer in case of
assessee by issue of notice under section 148 on basis that there was huge variation between
average rates at which Commission had been fixed for related party (lower rates) and
unrelated parties (higher rates) and assessee was charging commission at lower rate from its
related party Jet Airways, thereby resulting in lesser revenues and leading to lower tax
liability and eventually resulting into escapement of income - However, there was no new
material which had come to notice of Assessing Officer and entire reference in reasons
recorded was only to material on record - In garb of reopening assessment, Assessing Officer
was reviewing earlier order of assessment as issue with regard to transactions with all parties
including Jet Airways had been gone into by said Assessing Officer - Further, assessee was
right in charging lower commission rates to its sister concern / related party on account of it
being a sole selling agent as well as client giving more than 98 per cent of its total turnover -
Whether therefore, there being no new tangible material to justify reopening, reassessment
proceedings were nothing but a case of change of opinion, hence, not justified - Held, yes
[Paras 22, 23, 24 and 26][In favour of assessee]
Ms. Aasifa Khan for the Petitioner. Suresh Kumar for the Respondent.
JUDGMENT