- (1.) In this group of writ petitions, the petitioner's have challenged the validity and legality of the notice issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act). For facility, the facts of Writ Petition No.1366 of 2012 are being taken into consideration.
(2.) The petitioner is a Company incorporated under the laws of South Korea and is engaged in the business and manufacture of sale of refrigerators, washing machines, air conditioners and other household electronic appliances. The petitioner has a wholly owned subsidiary company in India known as LG Electronics India Private Limited (hereinafter referred to as LGIL) and has entered into several transactions relating to sale of raw materials finished goods and has received royalty income fees for technical services, etc. These transactions have been carried out between the two companies every year since its inception. For the assessment year 2004-05, the petitioner was in receipt of royalty income and fees for technical services of which the tax due was duly deducted and deposited. The petitioner, however did not file any return of income for the period under consideration since full tax as per the provision of Double Taxation Avoidance Agreement (DTAA) had been deducted by the Indian subsidiary on such payments.
(3.) On 24th June, 2010 a survey was carried out by the income tax department on the premises of the Indian subsidiary under Section 133A of the Act. In this survey statements of expatriate employees of the Indian subsidiary were recorded by the survey team. On the basis of the statement recorded, the Assistant Director of Income Tax (International Taxation), Noida formed a belief that the petitioners income was chargeable to tax in India and had escaped assessment and, accordingly, issued a notice dated 30th March, 2011 under Section 148 of the Act indicating that there was reasons to believe that the income of the petitioner had escaped assessment within the meaning of Section 147 of the Act.;