Meinhardt Singapore Pte Ltd and Another v. Assistant Director of Income Tax, Circle 3(1) International Taxation New Delhi

SANJIV KHANNA, J.: For detailed order see WP(C) No. 14076/2009 titled Meinhardt SingaporePte Ltd. vs. AssistantDirector of Income Tax, Circle 3(1), International Taxation, New Delhi pronounced today. December 4"', 2012 NA/kkb (SANJIV KHANNA) JUDGE f •. (R.V. EASWAR) ,IUDGE Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. IN TIrlE HIGH COURTOFDELHIATNEW DELHI Reserved on : 2'"'November2012 o/y Dateof))ecision: December,2012 •I WRIT PETITON rCIVIL^NQS. 14076/2009 MEINtlAKDTSINGAPOREPTE LTD. . Petitioner Through Mr. C.S. Aggarwal,Sr. Advocate with Mr. Prakash Kumar, Advocate. VERSUS ^SSISTANTDIRECTOR01-INCOMETAX, CIRCLE3(1), INJTiRJNATIONALTAXATION,NliWDELHI Respondent Through Mr. Sanjeev Sabharwal, Sr. Standing Coimsel & Mr. Puneet Gupta, Standing Counsel. -1 WRIT PETITON ("CIVIL)NQS. .14.077/2j)09ji METNIIARDTSINGAPORIiPTE LTD. Petitionec Through Mr. C'.S. Aggarwal,Sr. Advocate with Ml'. Prakash Kumar Advocate. VERSUS ASSIS'lANT DIRECl'OROF INCOMETAX, C-aICLE3(1), INTERNATIONALTAXATION,NEW DELHI Respomtcnt Through Mr. Sanjeev Sabliarwal. Sr. Standing Counsel & Mj. Punect Gupta, Standing Counsel. ,I. WRIT PETITON rCIVIL)NQS. 14085/2009 MEINHAWTFSlNGAPORl-:PTE LTD. Petitioner Through Mr. C.S. Aggarwal,Sr. Advocate with M.r. Prakash Kumar, Advocate. VERSUS ASSISTANTDIW.tCTOROF INCOMP:TAX, CIRCUI3(1), INTin^ATIONALI'AXA'llON,NEV\/ DELHI Rci^pondcnt Throug]) Mr. Sanjeev Sabharwal, Sr Standing • Coun;;cl & Mr. Puneet Gupta. Standing Counsel. W.P.(C)l4076,/2n09,i'1077/2009,1-108.v'2009&14096/2009 1C'f 25 I-WRIT PETITON (CIVIL) NQS. 14096/2009, MEINI-IARDT SINGAPORE PTE LTD. Petitioner Through Mr. C.S. Aggarwal, Sr. Advocate . with Mr. Prakasli Kumar, Advocate. VERSUS ASSISTANT DIRECTOR OF INCOME TAX; CIRCLE 3(1), INTERNATIONAL TAXATION, NEW DELHI Respondent Tlirough Mr. Sanjeev Sabharwai, Sr. Standing Counsel & Mi". Puneet Gupta, Standing Coimsel. • COl^M: HON'BLE MR. JUSTICE SAMJW KHANNA HON'BLE MR. JUSTICE R.V. EASWAR SANJIV KHANNA, J.: ' The present judgment will decide the challenge to the reassessment proceedings initiated against the petitioner Meinhardt Singapore Pte Ltd. for the assessment 3'ears 2002-03 to 2005-06 vide reasons recorded on 25"'-26"^ March, 2009. The said reassessment proceedings have been initiated by the Deputy Director of Income Tax, Circle-3(1), New Delhi.

¶2Reasons have been separately recorded for each assessment year, but they are virtually identical. For the sake of convenience, we are reproducing the reasons recorded in the assessment year 2002-03, vdiich read as under "Assessee filed its return of Income declaring an income of Rs.74,77,927 on 26-02-2004. The assessment was completed under section 143(3) on the Returned income on 23 •03-2005.

¶2The assessee is a Singapore based company, having a Branch Officer (B.C.) in India and is engaged in providing technical consultancy in the area of road construction in hidia. V\/.P.(C)14076/2009. 14077/2009,14085/2009&14096/2009 It has offered the income out of its activities in India for tax as Feefor Technical Services(FTS) under section 44D of the Act.

3.1 During the year, the assessee was indulged in providing technical consultancy services to National Highway Authority of India (NHAI) in respect of NHAI Allahabad project, the contract in respect of which was signed on January 30, 2001. In terms of provisions contained under section 44D read with II5A of the Act, the receipts from this project are taxable as FTS on gross basis @ 20%.

3.2 From the Profit & Loss account filed during the assessment proceedings, it is noticed that the Assessee declared total receipts of Rs.74,77,925/- under secticm 44D. which were offered for tax @ 15%. However, in the assessment order u/s 143(3) dated 23-03-2005 the same was taxed @ 20%.

4.1 It is observed that the assessee entered into a Sub-consultancy contract dated February 01, 2001 with respect to the same NHAI Allahabad project with one M/s Quest International Consultants, a copy of which was submitted during the assessment proceedings for the A.Y. 2006-07. It has been the assessee claim that it had only provided team leader to the project whose salary was added back in computation of Income; while other expenses were borne by the Sub-consultants, which were reimbursed directly to it by the NHAI. Enquiries have been conducted with M/s Quest International Consultants and it is seen that following payments have been received directly by the Sub-consultants from the NHAI in various financial years; Sr. No. Financial Year Amount Received by M/s Quest International Consullants directly from NHAI 2001-02 Rs. 1,16,76,611/- 2002-03 Rs.2,38,07,150/- 2003-04 Rs. 1,61,24,993/- 2004-05 Rs.2,46,36,754/- "5" ' 2005-06 Rs. 1,32,26,105/- Copies of Form I6A issued by the NHAI to the Quest International Consultants have also been placed on record.

4.2 During the assessment proceedings for the A.Y. 2006-07, the taxability of payments, received by the Quest International directly from the NHAI, in the hands of M/s Meinhardt (Singapore)Pte. Ltd. was examined. It was seen that the NHAI entered into a contract witn the assessee in respect of certain technical services to be provided by latter for its Allahabad W.P.(C)14()76/2009,14077/2U09,14085/2009& 14096/2009 project. There is no agreement/contractbetweentheNHAl and ^ M/s Quest International.

4.3 At page 14of the contractbetweenNHAl and the assessee. Sub-consultant is defined as any entity to which the Consultants subcontract any part of the services in accordance with GC 3.7, as quoted above. The purpose for including, in clause 3.7, provision for prior approval of NHAI before appointingKey Personnel and entering into any sub-contract was merely to ensure quality control. The ultimate responsibilityof the assessee towards satisfactorycompletion of contract is ensured by way of inserting sub clause (b). As can be seen from the text of GC 3.7(b), it is the assessee which is completelyliablefor the performanceof the Servicesby the Sub-consultant. !t clearly shows that the assesee was to assume all the risk in respect of the contract, even in respect of the portion of servicesto be rendered by the Sub-consultantsand, in the event of failure on latter's part to fulfill its obligations satisfactorily, was to face the consequences.

4.4 The above conclusion is reinforced by clause 1.2 of the contract. As can be seen, it declares that the Consultants (i.e. , the assessee) have complete charge of Personnel and Sub-consultants performing the services; and shall be fully responsiblefor Services performedby thern or on their behalf 'fhis shows that the fetters placed on the power of the assessee to appointpersonneland Sub-consultantsare only to the extent so as to ensure the desired quality and by no means could it be interpretedas proofofan independentrelationshipbetweenthe NHAI and Quest International.

4.5 Clause 4.1 of the contract requires the assessee to employ ' and provide for qualified and suitably experienced personnel and sub-consultants to carry out the Services. Had there been an independent relationship between the NHAI and Quest International,this clause would have been meaningless. It clearly shows that it was the assessee who had to decide its> team infulfillingthe contract, and role of NHAI was limitedto assess their quality only. As per clause 4.3, certain Key Personnel and Sub-consultants, including Quest International are approved by NHAI. If assessee'sargumentthat there was an independentcontractualrelationshipbetweenthe NHAI and the Sub-consultant is accepted, it would also infer that the Key personnel by the assessee were also independent, which obviously is ridiculous.

4.6 As per clause 5..5, the NHAI was required to make payments to the assessee in lieu of services rendered. Nowhere, the contract mentions that the .payments shall be made,to the Sub-consultants. Again in clause 6.2, it is the consultants,i.e. the assesseewho is to receiveremunerationand W.P.(C)14076/2009,14077/2009,'14085/2009&14096/2009 Page4of 25 i/ reimbursable expenditure. The import of ail this is that the entire payment/receipt shall be accrued to the assessee only, irrespective of who actually receives the payments based on assessee's authorization. During the assessment proceedings, the assessee itself submitted copies of bills raised by Quest International, duly countersigned by the assessee. It clearly shows that for the Client, i.e. the NHAl it is the assessee which matters, and not its sub-consultants. It expects proper fulfillment of contractual obligations from the assessee and releases payments only on assessee's authorization.

4.7 Moreover, in clausc 6.4(GC) it is the Consultants i.e. the assessee which is saddled with the responsibility of fulfilling various procedural requirements in order to make a claim of payments due. Nowhere the contract recognizes rights of the Sub-consultantsi.e. Quest-Internationalof getting paid. As per clause 6.4 (e), all the payments were to be made by the Client in designated accounts, which are listed in Special condition .

(SC) 6.4 (e). The list indeed includesa local account of Quest International and the Ld. A.R. during the assessment proceedingsplaced enormousrelianceonthis'fact. However,if one reads all the clauses related to payments in unison (GC 5.5 and 6-page 29 to 32-the relevant extracts of which are reproducedabove in para 5.2), the conclusioncan't escapethe notice that the accounts mentioned in SC 6.4 (e) do not, per se, confer any rights to earn income to the Sub-consultants; and insteadjust a tool of conveniencefor the operationalbenefitof the assessee. It is the assessee who, in the eyes of NHAI is rendering services, and as per'the contract, it is the assessee only who is getting paid. Character of income cannot change by mere directionto deliver the paymentsto a third person.

4.8 The fact that the contract is between the assessee and Quest International and not between the NHAI and Quest International, in itself, supportsthe conclusions drawn in above paragraphs.- Itdoesn'theld assessee'scase-thatthe relationship between the NHAI and Quest International is independent-one bit. Once a contract is signed between the NHAI and the assessee, no matter how much work the assessee sub-contracts, the contractualresponsibilitiesand consequentbenefitsshall be with the assessee only. Contract between the Quest International and the assessc

4.8 The fact that the contract is between the assessee and Quest International and not between the NHAI and Quest International, in itself, supports the conclusions drawn in the above paragraphs. It doesn't help assessee's case that the relationship between the NHAI and Quest International is independent-one bit. Once a contract is signed between the NHAI and the assesse, no matter how much work the assessee '\A/.P.(C)14076/2009,14077/2009,14085/2009&14096/2009 Page 5of25 sub-contracts, the contractual responsibilities and consequent benefits shall be with the assessee only.

4.9 It can be seen that the contract was entered into after the, assessee has already signed a contract with NHAI and the assessee was merely sub-contracting its obligation to the sub-consultants. The sub-contracting cannot possibly be construed as a separate contract between the NHAI and the Sub-consultants; 4, lOFurther, the true character of the contract comes out clearly if one analyses clause 7. It stipulates that the assessee shall not be liable to pay the Sub-consultants i.e. Quest International in the event that NHAI did not fulfill their obligations to pay the assessee. It clearly shows that it is the assessee who is rightful owner of alj the monetary consideration to be received from NHAI under-the contract, and the Sub-consultant was to get its share only when the assessee receives its due. Had there been an independent contract between the NHAI and Quest International in respect of payment to be received by Quest International, there was absolutely no need to insert clause 7 in the contract.

4.11 The contract between the NHAI and the assessee was entered into on January 30, 2001. According to the assessee's own admission the services rendered are in the nature of Technical Services under the relevant provisions of Income-tax Act, 1961 and the relevant DTAA. The assessee itself has admitted that the receipts in respect of NHAI Allahabad project are taxable as FTS under Section 44D read with section 115A of the Act on gross basis @ 20%. Under these circumstances, when there was no extra benefit of expenses available to the assessee, the claim of payment of a substantial amount of receipt directly in the hands of the Sub-consultants is nothing but a ploy to avoid payment of taxes by the assessee. Rightfully, entire receipts arising on account of the said contract are'taxable in the hands of the assessee on gross basis @,20% under section 44D read with section 115A of the Act.

4.12There can be no denial to the fact that Contract was awarded to the assessee only and not the assessee and Quest International. After signing the contract with NHAI, the assessee entered into a sub-consultancy agreement with Quest International, but the responsibility for the total performance from start to successful completion and full compliance with the specification for the performance remained with the assessee. Also, it was the assessee, and not the Sub-consultant, who was asked vide GC 6.4 (a) to provide a bank guarantee. •4.13In the eventuality of any unforeseen event which might have, prevented .the Sub-consultant from fulfilling its obligations, responsibility was on the assessee to execute the contract. The overall picturewhich emerges makes it clear that W.P.(C)14076/2009, 14077/2009,14085/2009& 14096/2009 though contract was later on sub contracted in part, the intention of parties was very clear that the entire gamut of services were to be rendered on the pattern of one composite x;ontract.

4.14The mere fact the Quest International Consultants was assessed to tax is not a reason alliunde to which assessee could be exonerated from the payment of rightful tax dues. Hon'ble Supreme Court in the cases of ITO v. Ch. Atchaiah (218 ITR 239) (SC) and S.P. Jaiswal v. CIT (224 ITR 619)(SC) has held that the right person has to be assessed even if some other person has already filed returns and paid taxes thereon.

4.15For the purpose of ascertaining the intention of parties, regard shall be had to the terms of the contract, the conduct of the parties and the circumstances of the case. It is the duty .to construe the contract according to the intention of the parties. The law of contract is intended to ensure that what has been , promised shall be performed, and in the event of breach, party at default shall compensate the other. To achieve this task a contract must be capable of being executed independently. The factual details of the contract have been examined. The above analysis clearly shows that the Contract is basically one consolidated contract only. Clause in respect of bank guarantee makes it abundantly clear that the entire responsibility of execution of contract was vvith the assessee only from beginning to end. Assessee was required to ensure the quality of local manpower, and by mere sub-contracting, it-would not take the position that it was not responsible for the execution of the project in Toto. Taking into consideration the entire conspectus of the case, the conclusion can't escape that the ploy of direct payments to Quest International was a fagade created for the purpose of taxation, ex consequenti and therefore, veil has to be lifted to tax the correct amount of receipt as FTS under section 44D read with 115A of the Act @ 20% on gross basis.

4.16. During the year, the Quest International received an amount of Rs. 1,16,76,6 i 1/- directly from the NHAI on behalf of the assessee. As discussed above, this amount should have been taxed in the hands of the assessee. Therefore, I have reasons to believe that an amount of Rs.1,16,76,611/- has escaped assessment. ^ Approval of the DIT (International Taxation-I), New Delhi is solicited in terms of the proviso to section 151(1) of the Act. Deputy Director of Income Tax . Intl. Tax. Circle 3(1), New Delhi Dated;26-03-2009" W.P.(C)14076/2009,14077/2009,14085/2009& 14096/2009

¶3We may note that the proceedings for the assessment year 2002-03 and 2003-04 are beyond the period of four years and, therefore, the firstprovisoto Section147 ofthe IncomeTaxAct, 1961 (Act, for short) is apphcable. The notices for these two assessmentyears have been issued after obtaining approval under the proviso to Section 151(1) of the Act from the DIT (International Taxation-1).

¶4With regard to the assessment years 2004-05 and 2005-06, we accept that the petitioner-assesseeis entitled to succeed and the reassessmentproceedings are liable to be quashed on the ground of 'change of opinion'. However, for the assessmentyears 2002-03 and 2003-04, we have come to the conclusion that the reassessment proceedings have been rightly initiated and accordingly the writ petitionsforthe saidyears areliableto be dismissed.

¶5Whiie decidingthe writ petitions,we have kept in mind that each assessmentyear is separateand independent. It may be appropriateto reproduce the following observationsof the Bombay ffigh Court in Income Tax Reference No. 2/1995 titled M/s Unitech Products Ltd. Vs. CommissionerofIncomeTax, decidedon 30"^ July, 2012:- "21. Once the absence of the relevant material before the AO is established, the burden is on the assessee to establish that the AO in some manner and for some reason had • knowledgeof such materialand consideredit while making the assessment orders. There may well be circumstances \vhich would lead to such an inference. That, however, would depend on the facts of each case. In the facts of this case, we are not inclined to speculate in the respondent's favour. )

¶22An AO is not concerned with only one assessee or three assessment orders. If judicial notice may be taken it must be .of the fact that an AO has considerable other work including the assessment proceedings of several assessees. We see no reason to presume that the AO would remember all the material and all the facts in respect of the assessment proceedings for a particularyear while dealing with the assessmentproceedingsof anotheryear even in respect of the same assessee. There is nothing to suggest that the AO VV.P.(C)14076/2009, 14077/2009,14085/2009& 14096/2009 Page 8 of25 while making the assessment orders meach of the Sc ] years in fact, consideredthe material available in lespect _/ of the other years'. That the assessmentorders were niade in different dates albeit within a gap of only ew days indicatethe contrary. The exigenciesand the burdenof he work may well result in his inabihty to conelate the material betAveen various assessment proceedings even though made only within afew days of each othei The burden would rest heavily upon the assessee to establish otherwise. There is nothingon record that persuadesus to come to a conclusion that the AO while ^e assessmentorders for the A.Ys. 1981-82 and 1982J9 3 recollected Note 16 to its Accounts for

31.12.1982included in the return of income loi the A.Y. 1983-1984."

¶6At the same time, we ai-e cautiousof tlie fact tliat if the issue m questionpermeates,is agermaneand live,issue for all the .issessment yeai-s,it ean be overlapping.Therecan be caseswhen an issue/quest,on may have been examined even when the Assessing Officer had not raisedawrittenquery etc. especiallywhen assessmentproceedingsfor two or more years are pending or have been decided by the same Assessing Officer or tire questioiVissuewas raised/examinedmthe immediatelyprecedingyeai'. In spiteofthesaidposition,for tliereasons set out below, we have reachedtwo differentconclusionsby applymg tlie legalprinciplesapplicableto Section147/148ofthe Act. 7 "We have alreadyset out in detailtire reasonsfor reopening,tor ay 2002-03 The petitioner.a.s notedin the said reasons,is aSingapore based company having a branch office in India, and during the assessmentsyears in question, it had providedtechnical consuh^rcy sei-vices to National Highway Authority of India (NHAI) under a contract dated 30"' January. 2001. For each assessment year, the assesseehad filed returnsdeclaringtotal receiptsfrom NI-[AI. For first wo yeas, the gross receipts ftom NIIAI were offered to tax @15% under Section44D of the Act. For the assessmentyears 20024)3 and 2003-04, tire Assessing Officer,mthe assessmentorders dated 23 w.p.iciiM76/2(i09,\mnnm.imsmn&laossnoov March, 2005 and 22"^' February, 2006 passed under Section 143(3), observedand held that the gross receiptswere taxable@20%. For the assessmentyear 2004-05, the assessee had declared total receipts of Rs.1,61,24,993/-under Section44D, which was offeredto tax @20%, whereas the remaining receipts of Rs.65,48,410/-were oftered to tax under Section44DA on net basis. For the same assessmentyear, i.e. 2004-05, the petitioner-assesseehad also claimed indirectexpenses ol Rs.1,11,65,895/-against the receipts offered for tax under Section 44DA. Similarly,for the assessmentyear 2005-06, the petitionerhad declared total receipts of Rs.1,08,96,441/-under Section 44D, which were offeredto tax @20%. The remainingreceiptsofRs.3,45,30,515/- were offeredto tax under Section44DA on net basis. The assesseehad claimed indirect expenses of Rs.3,83,31,294/-against the receipts offeredfor taxationunder Section44DA. On this amount,the assessee had itselfdisallowedRs.51,18,679/-being expensesincurredin relation to projectstaxableunderSection44D. The assessmentsfor AY 2004-05 and 2005-06 were completed under Section 143(3) on the returned incomeon 5''^ December,2006 and 24"VDecember,2007,respectively.

¶8From the reasons recorded, it is apparent that the Assessing Officerwas of the opinion that payments made to Quest International Consultants(Quest, for short), a sub-contractor,should be included ni the receiptsor the taxableincomeunder Section44D read with Section 115A of the Act and have to be taxed in the hands of the petitionei@ 20%. In the assessment years in question. Quest had received Rs.f,16,76,611/-, , Rs.2,38,07,150/-, Rs.1,61,24,993/- and Rs.2,46,36,754/-respectively from NHAI. This, according to the AssessingOfficer,is the escapedincome and is taxablemthe hands of the assessee. The AssessingOfficer,in this connection,has referredto the clauses of the contractbetweenNHAI and the petitioneras well as W.P.(C)14076/2009,14077/2009,14085/2009&14096/2009 the contractbetweenthe petitionerand Quest. He has quoted,examnied and interpreted the said agreements to justify initiation of the reassessment proceedings. For the assessment year 2006-07, the Assessing Officer has held in the assessment proceedings that the amounts receivedby Quest from NHAI are taxable in the hands of the asscssee. It is apparentthatthe assessmentorderfor the assessmentyear 2006-07 became the starting point for initiation ot the reassessment proceedings.

¶9For the sake of convenience,we will first deal with W.P.(C) Nos.14085/2009and 14076/2009,which relate to the assessmentyears 2004-05 and 2005-06. As observed above, as far as the assessment years 2004-05 and 2005-06are concerned,the petitioner'scase falls in the category of 'change of opinion'. It is an accepted and admitted position that in the assessment year 2004-05, both, the agreement between the petitioner and NHAI, and the agreement betAveen the petitioner and Quest, are available on the records of the Assessing Officer. Therefore,the AssessingOfficerwas awareand had loiowledge of the said agreements. From the reasonsquoted above, it is clearthat the AssessingOfficerhas referredto the clauses of the two agreements and has interpretedthem to holdprimafacie and tentativelythat receipts by Quest from NHAI were taxable in the hands of the assesse, and should be included in the net income of the asscssee. Once the two agreementswere with the AssessingOfficer, during the course of the assessmentproceedingsfor the assessmentyear 2004-05,the said aspect as asequitorwould have been examinedand dealt with by him. Ihe respondentsin their additionalaffidavitfiled on 19"^ April, 2012, have accepted the position that the agreement between the petitionerand Questis availablein the records for the assessmentyear 2004-05.'fhey cannot question their own records and state that they do W.P.(C)14076/2009,14077/2009,M085/2009&14096/2009 the contractbetweenthepetitionerand Quest, He has quoted,examined • and interpreted the said agreements to justify initiation of the reassessment proceedings. For the assessment year 2006-07, the Assessing Officer has held in the assessment proceedings that the amounts received by Quest J:rom NHAI are taxable in the hands of the assessce. It is apparentthat the assessmentorder for the assessmentyear 2006-07 became the starting point for initiation of the reassessment proceedings.

¶9For the sake of convenience, we will first deal with W.P.(C) Nos. 14085/2009 and 14076/2009, Avhich relate to the assessment years 2004-05 and 2005-06. As'observed above, as far as the assessment years 2004-05 and 2005-06 are concerned,the petitioner's case falls in the category of 'change of opinion'. It is an accepted and admitted position that in the assessment year 2004-05, both, the agreement between the petitioner and NFIAl, and the agreement bet-ween the petitioner and Quest, are available on the records of the Assessing Officer. Therefore, the AssessingOfficerwas aware and had knowledge of the said agreements. From the reasons quoted above, it is clear that the Assessing Officer has referred to the clauses of the two agreements and has interpretedthem to hold primafacie and tentativelythat receipts by Quest from NFIAI were taxable in the hands of the assesse, and should be included in the net income of the assessee. Once the two agreementswere with the AssessingOfficer, during the course of the assessmentproceedingsfor the assessmentyear 2004-05,the said aspect as a sequitorwould have been examinedand dealt with by hiiii. The respondentsin their additionalaffidavitfiled on 19"^ April, 2012, have accepted the position that the agreement between the petitioner and Quest is availablein the recordsfor the assessmentyear 2004-05.They cannot question their own records and state that they do W.P.(C)14076/2009, 14077/2009,14085/2009&14096/2009 not know how the agreement is available on record for the said yeai", without valid, good reason and justification. The onus is on them. It is claimed and stated that this by itself does not show that the Assessing Officer had applied his mind to the said question of taxability of receipts of Quest in the hands of the assessee. It is not possible to accept the statement made by the learned counsel for the Revenue. There are a number of reasons for the same. Firstly, the fact that the contract between Quest and the petitioner is available on record shows that the Assessing Officer must have called for the same. Secondly,there is correspondence,in the fomi of a letterdated 30"' October, 2006, written by the petitioner to the Assessing Officer in the AY 2004-05 on the issue in question. The petitioner, -in paragraph 4 of the said letter, had stated as under:- "4. Copy of the Audited accounts of M/s Quest hnternational, Allahbad and the certificate for them certify that M/s Quest International are raising bills directly to NHAI, Allahabad and getting payments directly from NHAI, Allahabad."

¶10Thereafter,in the letterdated 14^'^ November,2006, again for the AY 2004-05, the petitioner had stated as under;- "1. During the year under assessment company has paid the total salary of Rs.31,88,801.82 to the staff working at New Delhi for the various projects except project at NHAI, Allahabad. The Head Officer has simply remitted certain funds . to the branch office in India for maintajning various expenses in India, 'fhe Delhi Branch office staff has been engaged for the functioning of Indian branch. The details of salary paid by the India branch and by the Quest International is enclosed which establishes the fact that staff at Delhi are not attending any work for NHAI project. These are two different staffs having different duties and nature of, work. ' TDS of Rs.507223/- has been deducted and TDS returns have been filed by the company. The amount so paid has been debited to Profit & Loss account and has been claimed as deduction being an expenditure incurred or execution of contracts entered after April 2003. :

¶3Copy of NHA project, Allahabad is .enclosed for your ready reference and record. From this agreement with the National Highway Authority' of India, you will observe that the provisions of sub-consultancy in the name of Quest W.P.{C)14076/2009, 14077/2009,14085/2009& 14096/2009 InternationalConsultants is given under the organizationchart at page no.54 of the contract. The organizationchart clearly defines and establish the fact that the Quest hiternational has been appointed as sub-consultantfor undertakingday to day work as directed by NHAl.

¶5Every month company is raisingprofessionalbill in hidian currency. As informed to your earlierthat Quest hiternational has been appointedby NHAI as sub-consultantfor undertaking • local work as per the requirementof NHAI from time to time. Accordingly, Quest hiternational is raising bill in hidian Currency. The Indian currency bill consist of manpower provided by Quest Internationaland otherexpensesincurredby Quest International. The bill relatingto supply of man-power is being shared between Meinhardt Singapore and Quest Internationalas per their mutual agreementAvhich work out to be at 25% of the bill related to providing of manpoAver. Reimbursementof expenses are not shared between Quest International and Meinhardt Singapore Pte. Ltd."

¶11Thirdly, the order sheet entry dated 30"' December,2005 for the assessment year 2004-05 reads as under;- "30/12/05 Sh Saxena appeared and discussed the case'. The counsel contends that in the profit & loss a/c no expenses have been claimed for NHAI-Allahabad project as this project agreement was entered into before 31/3/03. Proof in respect of this is to be given as the expensesappearto be common. Also, detailsof contract between M/s Meinhardt Singapore and M/s Quest Internationalare to be given. Since the counsel has stated that -M/s Quest International is handling the NHAI project and bearing all expenses. , Fixed for 6/1/06"

¶12It may be relevanthere to referto the questionnaireservedon the petitioner on 20"' November, 2006, in which the petitioner was questioned "1. Please refer to the computationof income & documents ' filed during the asstt. proceedingsofthe case. Please submit the following:- The copy of agreementsentered into with the South city Projects Calcutta Ltd., Bengal silver spring project, Queens Park Estate Pvt. Ltd. & NHAI, New Delhi to show that these agreementsare enteredafter 31^' March,2003.

¶2Pleaseexplain as to why not the paymentsmade to Quest Internationalconsultantsbe consideredas expenseswith W.P.(C)14076/2009, 14077/2009,14085/2009&14096/2009 Page 13 of Z5 r/l sub-contract and the same be treated as receipt for the purpose of computing tax u/s 44D r/w s 115A of IT 1961; This is in view of the fact that the company is raising invoices to NHAI.

¶2From the audited a/cs of the branch it is seen that during F.Y. 02-03 the company has incurred •expenses of Rs.322662/-. The company has also submitted that it has PE in the form of branch^office in India. These expenses were not claimed as deduction during A.Y. 03-04. Considering the provisions of S. 44D, please state on what a/c the expenses are made What were the such expenses in F.Y. 2000-01, 2001-02 also considering the fact that the B.O. didn't have any project other than NHAI in earlier years it can be said that these expenses were incurred in connection with NHAI project Allahabad due to this please also explain as to why an expense of Rs.3226621/- be reduced from the current year expenditure also treating the same as incurred for NHAI Allahabad project.

¶4Please explain on what a/c the advance to Quest International and Arch Consultancy be made since when the advance was made submit the copy of documents in this regard."

¶13Similar^, the order sheet entry dated 7"^ November, 2006 reeords:- "2. Why the total receipt from NHAI in respect of Allahabad project in Indian currency be treated as a receipt and taxed as per provision of Section 44D read with 115A of the Act".

¶14The letters/responses of the petitioner, when read with order sheet entry dated 30"' December, 2005 and questionnaire dated 20"' November, 2006, gives a clear indication that the Assessing Officer was aware that payments had been made by NHAI to Quest. Secondly, both the agreement between NHAI and Quest, as well as the agreement between the petitioner and NHAI were on record.

¶15In the assessmentyear 2005-06 vide order sheet entry dated 14"' December, 2007, the petitioner was asked the following question:- "Please explain how have you confirmed that no expenses have been incurred for the services offered to tax under Section 44D read with Section 115A, except the salary paid to the Headquarter? W.P.(C)14076/2009,14077/2009,14085/2009& 14096/2009

¶16Relevantportion of the earlierquestionnairewith respect to AY 2005-06 dated 19^''November, 2007 was as under:- "2. Please furnish copies of all the agreements contractswith the hidian parties, if notfurnishedalongwiththe returned of income. Also furnish copies of invoices raised on these parties.

¶3Detailsof your employeesand the employeesof the associated enterprises (AEs) who visited India during the financial year 2004-05, purpose of their visit and duration of stay in India(supportwith documentaryevidence).

¶4Name and address of the AE in India and details oi transaction with such AE." Ill

¶17The petitioner claims that it had filed replies dated 29.' November, 2007, 6"' December, 2007 and 20"' December, 2007. However, the same are not on records/filesof the respondents. Order sheet entries dated 30^''November,2007, 6"' December,2007 and 20"' December, 2007 state that letters were filed. The questionnaireand order sheet entries themselves disclose that the issue in question was examinedby the AssessingOfficer. In the letter dated 17"^ December, 2007,the petitionerin responseto one ofthe querieshad stated:- "1. XX, XX XX

¶2Explain the two contracts Avith NHAI a) We have entered in the first contractwith NHAI in January' 2001 for supervision of National Highway ConstructionSupervision for 4 Laning and Strengthening of ExistingTwo Lane Stretchesfrom KM, 115 to 158 KM and from KM245 to kM3 17 on NH 2. (Copy of agreement is attached for your reference). The above said contract was in association with local consultant namely M/s Quest hiternational,the work was distributedas Meinhardthas to provide expat Team leader and Quest to provide all the • local staff All the expensesexceptsalary of Team Leader is being paid by Quest International.On the similarpattern NHAI pays Team Leader's remuneration direct to Meinhardt and fee for local staff and expenses is paid to Quest International. The above said income to Meinhardt has been offered for tax under section 115A read with section 44DA as the contractwas signed before T' April' 2003." W.P.(C)14076/2009,14077/2009,14085/2009&14096/2009 • Page 15 ot 25

¶18It is the contentionofthe petitionerthat the contractwith Quest \)^ dated 1'^ February, 2001 was furnished and, therefore,the query was raised. We agreeas it is obviousand it wouldbe incongruousto hold to the contrary. That the contractdated 1'' February,2001 is on record in the immediateprecedingyear 2004-05 is accepted. The answer given was pertinentand specific. It is indicativeofthe applicationofmind on the factual matrix.

¶19Consequently,the respondent'sclaimthat these lettersare not on record, and thereforeshould not be taken into consideration,cannotbe accepted. This cannot be a ground to reject, and to not take into consideration,the letters. Record maintenance of the respondents leaves much to be desired. Departmentalfiles and records are neither page numberednor in seriatim. There is no conceptofafiling counter and issuanceof a proper receipt. The petitioner-assesseehas taken a categoricalstandthatthese letterswerewrittento the AssessingOfficer. The respondentscannot deny receipt of the said letters merely on the basisthatthey are now not on record,oncethe order-sheetsrecordtiling by the petitioner.We, therefore,opt and accept the statementof the petitionerthat the agreementbetweenthem and Quest was furnishedto the Assessing Officer. Time has come for the respondent to start digitization,and to have properDak receiptcountersand registers.The denial by the respondents that the agreement with Quest was not furnished in the proceedingsfor AY 2005-06 is rejected. Without the letters,the respondentscannotdeny the existenceand availabilityofthe agreementbetweenthe petitionerand Quest,on theirrecoid.

¶20Thus, for the assessment years 2004-05 and 2005-06, the AssessingOfficer in the originalproceedingshad examined and was aware of the two agreements. He was also aware that Quest had receivedpaymentsfrom NHAI and that these were not includedin the W.p.(C)14076/2009, 14077/2009,14085/2009&14096/2009 Page16 of 25 taxable income or receipts oi the income. lie was also aware that the petitioner'sincome was taxed on the gross receiptbasis under Section ]151. Therewas no lapse or fault on the part ofthe assessee. Full facts were on record and the AssessingOfficeracceptedthe returns. li at all, there was a lapse on the part ofthe AssessingOfficerto understandthe legal position. At best the case of the Revenue can be that the AssessingOfficerhad wronglyapplied,and did not appreciatethe legal position. This cannot be a ground to reopen finalised regular assessmentsfor the said years. The Supreme Court in the case of LIT Vs. KelvinatorIndia Ltd. (2010)2SCC 723 has heldhas undei.- "5. On going tlirouglitiie changes, quoted above, made to Section 147 of the Act, we find that, prior to the Direct Tux Laws (Amendment)Act, 1987, reopeningcould be done undei tlie above two conditionsand fulfillmentof the said conditions alone conferredjurisdictionon the assessingofficer.tomake a back assessment, but in Section 147 of the Act (with effect from 1-4-1989),they are given a go-by and only one condition has remainedviz. that where the assessingofficerhas reason to believe that income has escaped assessment, conleis jurisdictionto reopenthe assessment.Therefore,post-1-4-1989, powerto reopen is much wider. However, one needs to give a schematicinterpretationto the words"reasonto believe"failing which, we are afraid. Section 147 would give arbitrarypowers to the assessingofficer to reopen assessmentson the basis ol "mere change of opinion", which cannot heper se reason to reopen.

¶6We must also keep in mind the conceptual difference between power to review and powerto reassess.The assessing officer has no power to review; he has the power to reassess. But reassessm.enthas to be based on fulfillment of ceitain preconditionsand if the concept of "change of opinion is removed, as contended on behalfof the Department,then, in the garb ofreopeningthe assessment,reviewwould take place.

¶7One must treat the conceptof "changeof opinion"as an in-builttest to check abuse of power by the assessingofficer. Hencc, after 1-4-1989, the assessing officer has power to reopen, provided there is "tangible.material"to come to the conclusionthatthere is escapementof income from assessment. .Reasonsmust have a live link with the formationofthe belief Our view gets supportfrom the changesmade to Section 147 of W.P.(C)14076/2009, 14077/2009,14085/2009&14096/2009 ' Page " wV the Act, as quoted hereinabove.Under the Direct Tax Laws - \ c (Amendment)Act, 1987, Parliamentnot only deletedthe woids \jV "reason to believe" but also inserted the word opmion in Section 147 of the Act. However, on receiptof representations from the companiesagainst omission of the words "reason to believe" Parliament reintroduced the said expression anc deleted the word "opinion" on the ground that it would,vest arbitrarypowers in the assessingofficer."

¶21For the assessmentyears 2002-03 aird 2003-04, the agreement between tlie petitioner-assesseeand Quest is not in the assi^ssment reeords. The petitioner,however,contendstliattlie agreementbetween them and Quest was filed before tire AssessingOffieer. However,no letter endosing the said agreement has been placed on record, and neitheris tliere any ordersheet enhry on the basis of whieh it cm.ld be statedthat tlie agreementbetweenthe petitionerand Questwas filed on record. There is odierwiseno material or evidence to show that the agreement between the petitioner and Quest was filed with the AssessingOffieer in the said two assessmentyears. The Assessing Offieervide letterdated 27'" December,2004 for the AY 2002-03 had calledupon tlie assesseeto givethe detailsoftheirbusinessrelationship with M/s QuestInternationalConsultants,Faiidabadalongwitli copy of agreementwith this concern,if any. The petitionerwas also asked to confirmwhetherany supplieswere made by the petifioneror any of its associateentity,to any otherconcernin India. Ifyes, detailswere asked to be provided.

¶22By its response dated 24'" .Tanuary, 2005, the petifioner had categoricallystated that "Mfe Quest InternationalCon.siiltantis asub i-.nnsnll:antof M/s NHAI andlhe^mranvis not havine^_busiil<as ..iMiionshinwith them." It was also statedthat the petitionerhad not made supplies in India, and the petifioner did not have any other businessassociatesin India. The contentionofthe petitioner,that they W.P.(C)14076/2009,'4077/2(109,14085/2009&14096/2009 acccptedand admittedcontractualrelationshipand businessassociation with Quest in this letter, is playing and hedgmg with words. Ihe queries raisedwere simple and straight-forward,and aclear reply was mandated. The contentionof the petitioner,at best, shows adeliberate and intentionalattemptto concealand not statetrue and correctrelevant facts. For the sakeofcompleteness,the queryraisedand the reply given are reproducedbelow j "11. Give the detailsof businessrelationshipwith M/s Quest InternationalConsultants,Faridabadalong with copy ofagreementwith this concernifany.

¶12Please confirm whether any supplied were made by you or any of your associate entity to any concern in India. Ifyes, give detailsthereof" IU;PL.Y "With referenceto your notice dated 27.12.2004and as desired by you pleasefind enclosedherewiththe followings:- a) X X X X X X b) xxxxxx c) XXX XXX I, . r d) M/s Quest InternationalConsultantis a sub Consultanto M/s "NHAI and the company is not'having any business relationship with them. e) It is clarifiedthat the Company has not made any suppliers in India and further it may be inform to you that the Company does not have any other business Associates in India."

¶23Anotherquery.inthe aforesaidletter,dated27.12.2004,asked for acopy of the contractbet^/eenthe petitionerand NHAI, and with any other entity for whom services were rendered by the petitionerfor utilisationin India. In the response, dated 24.01.2005,a copy of the agreementbetAveenthe petitionerand NI-IAI was enclosed,and it was furtherclarifiedthatthe petitionerhad not enteredinto any contractwith any other,organization/companyfor renderingprofessionalservices in .India. W.P.(C)14076/20n9.14077/2009,14085/2009&14096/2009 Page" of 25

¶24It is clear from the aforesaid reply that the petitioner had denied any contract or business relationship between them and Quest. This is in spite of the fact that diey had an agreement, and it is an accepted and admitted position that they had entered into an agreement with Quest dated 1^^ February,2001. The aforesaidfact was clearlyconcealed,and incorrect factual information was circulated to the Assessing Officer. Learned counsel for the petitioner in this connection has drawn our attention to the various clauses of the agreement between the petitioner and NITAI, and submitted that these clauses refer to Quest as a sub contractor. The agreement between the petitioner and NHAI does refer to, and state that. Quest is the sub-contractor. This became the basis, or the stalling point, from which the Assessing Officer made a query from the petitioner regarding their association or business relationship with Quest, The petitioner, however, took an affirmative and categorical stand that they had no business relationship with Quest. The Assessing Officer, therefore, did not examine the said question. The present case would, therefore, be one where there has been concealment of fact, and the Assessing Officer has proceeded on the basis of the wrong factual statement made by the assessee. The plea, and submission, that the agreement with Quest was filed, is not correct. There is no proof or letter filing the agreement. The reply dated 24.1.2005 does not state that agreement with Quest was being filed. The agreement is not on record. In this situation the following obsei-vations of the Full Bench in TfA No. 2026/2010 titled CIT Vs. Usha International, decided on 21"" September, 2012 are apposite and applicable:- "16. Here we must draw a distinction between erroneous applicalion/interpretation/undei'standing of law and cases where . fresh or new factual information comes to the knowledge of the Assessing Officer subsequent to the passing of the assessment order. If new facts, material or information comes to the knowledge of the Assessing Officer, which was not on record and available at the lime of the assessment order, the principle W P.(C)14076/2009,14077/2009,14085/2009& 14096/2009 of- "change of opinion" will not apply. The reason is that \\ "opinion" is formed on facts. "Opinion"-formedor based on wrongand incorrectfacts or which are belied and untruedo not get protection and cover under the principle of "change ol opinion". Factual informationor material which was incorrect or was not availablewith the AssessingOfficerat the time of original assessment would justify initiation of reassessment proceedings. The requirement in such cases is that the information or material available should relate to material facts."

¶25The conditionofthe first proviso is also squarelysatisfied,as the petitionerhad failed to fully and truly disclosesuch material facts. In the-case of Usha International{supra), the terra "material fact" has been elucidated and explainedas under;- "Theexpression'materialfacts' meansthose facts which if taken into account would have an adverse affect on the assessee by a higher assessmentof income than the one actually made. They should be proximateand not have remote bearingon the assessment. The omission to disclose may be deliberate or-inadvertent.The questionofconcealmentis not relevantand is not a precondition which confers jurisdictionto reopen the assessment."

¶26We may also refer to the decision in the case of Calcutta DiscountCompanyLtd. Vs. JTO (1961) 41 ITR 191, whereinthe terra "material facf was examined and it was held;- "The words used are "omission or failure to disclose fully and truly all materialfacts necessaryfor his assessmentfor that year". It postulatesa duty on every assesseeto disclose fully and truly all materialfacts necessaryfor his assessment.What facts are material,and necessaryfor assessmentwill differ from case to case, hi every assessment proceeding, the assessing authoritywill, for the purposeofcomputingor determiningthe proper tax due from an assessee,require to know all the facts which help him in coiningto the correctconclusion.From the primary facts in his possession,whether on disclosureby the assessee, or discovered by him on the basis of the facts disclosed,or otherwise— the assessingauthority has to draw inferencesas regards certain other facts; and ultimately,from the primary facts and the fiirtherfacts inferred from them, the authorityhas to draw the proper legal inferences,and ascertain on a correct interpretationof the taxing enactment,the proper J W.P.(C)14076/2009,14077/2009,14085/2009&14096/2009 tax leviable. Thus, when a question arises whether c'ertain income received by an assessee is capital receipt, or revenue receipt, the assessing authority has to find out what primary facts have been proved, what other facts can be inferred from them, and taking all these together, to decide what the legal inference should be."

¶27The positionin the assessmentyear 2003-04is that the agreement betweenthe petitionerand Quest is not on reeord. The petitioneragain claims that they had filed a copy of the said agreement with the AssessingOfficer,but they do not have any letter, or any other proof, that they had filed the same. The Order sheet entries also do not make any referenceto the filing of the agreementbetweenthe petitionerand Quest. The petitionersquarelyrelies upon the questionnairewritten by the Deputy Director of Income Tax, the Assessing Officer.- The aforesaidquestionnairedoes not make any referenceto the agreement betweenthe petitionerand Quest. In fact, the said questionnairecan be used against the petitionerfor concealingand not stating the true and Iiill materialfacts, as the AssessingOfficerhad asked the petitionerto state how the taxable income under Section 115J had been computed. Jhe petitionerhad also been asked to furnishall invoicesofconsultancy incomeof Rs. 2,26,73,403/-.From the aforesaidposition,it is clearand apparentthat the petitionerhad not furnisheda copy of the agreement betweenthem and Quest and the AssessingOfficerdid not go into the said question and examine the same.

¶28Learned counsel for the petitioner in these circumstances submittedthat the reasonsto believerecordedby the AssessingOfficer •on 26.03.2009 do not record or state that the agreement between the petitioner and Quest was not on record, and that there was failure on the -part of the assessee to fully and truly disclose the material facts. We feel that the contention, though attractive, must fail for various reasons. Whether or not the agreement between the petitionerand Quest was W.P.(C)14076/2009,14077/2009,14085/2009& 14096/2009 Page 22of25 availablewith the AssessingOfficer is amatter of record and when ^ disputed, must be examined and decided on preponderance of probabilities. Factually, it is correct that, as per the record, the agreementis not on record. On examinationofthe said dispute on the preponderanceof probabilitieswith referenceto the evidence/material available,we have to hold that the agreementwith Quest was not filed with the assessingofficerin the assessmentyears.2002-03and 2003-04. Secondly,we have quoted abovethe reasonsto believerecordedfor the assessmentyear 2002-03,which are similarto the reasons recordedfoi the assessmentyear 2003-04. In paragraph4.1 it is recordedthat a copy of the agreementbetween the assessee and Quest dated 1'^ February, 2001 was submittedduringthe courseof assessmentproceedingsofAY 2006-07. Thereafter,the AssessingOfficerhad made queries and came to loiow about the payments received by Quest directly as a sub contractorfrom NFIAI. CopiesofForm 16A for AYs 2002-03 to 2005-06 were also placed on record i.e. on record for the assessmentyear '2006-07. Thereafter,the AssessingOfficerhas referredto the contract betweenQuestand the petitionerin paragraph4.8 onwards. The reasons to believe have to be read holisticallyand in a pragmatic manner. No doubt the reasons to believe should be clear and not ambiguous and should show a nexus between escapement of income and under assessment,but it is not just and fair to read the reasons to believe in such as manner as to examine them under a magnifying lens, with a view to find fault. Some latitude and play in the language can be granted,when it is justifiedand required. Dogmaticapproach should not be adopted. The assessment records are also required to be examined and considered,along with the reasons to believe. Read in this manner, we do not think that the Revenue is tiying to build up a new case, or is supportingthe reasonsto believeon the basis ofgrounds W.P.(C)14076/2009,14077/2009,14085/2009&14096/2009 Page 23 of25 which are not statedor recordedin the reasonsto beheve. ihe decision in the case of Mohinder Singh Gill and Another Vs. ChiefElection Commissioner1978 (1) SCC 405, is, therefore,not applicable.

¶29Lastly, it was submitted on behalf of the petitioner that the reasons to believe do not show any nexus, or formation of belief, that income had escaped assessment. It is not possibleto accept the said contention. At this stage, only a prima facie or tentativeview has to be formed by the AssessingOfficer,that income has escaped assessment. The prima facie view must have some foundation or basis. fhe AssessingOfficerhas formedsuchtentativeopinion. He has interpreted the clauses of the two agreements to reach a prima facie opinion. Whether or not, ultimately, the addition is sustained, is a different matter,and neednot be examinedat this stage.

¶30Several issues/contentionsraised could have been answered by mere examination/verificationof the documents on record/filesof the Revenue. Unfortunately,the respondentconcede and do not rely upon their own records/files.This is seriousand requireseffectiveand urgent remedial and corrective action by the Board.

¶31In view of the aforesaidfindings,we allow Writ Petition(Civil) Nos. 14085/2009 and 14076/2009, which pertain to assessment years 2004-05 and 2005-06. The reassessmentproceedingsfor the said years are quashed and subsequentlythe assessment orders passed shall be treated null and void. Writ Petition (Civil) Nos. 14077/2009 and 14096/2009 pertainingto the assessmentyears 2002-03 and 2003-04 are dismissed. As assessmentordershave been passed,thepetitioneris at libertyto file appealsbeforethe appellateauthoritywithinaperiodof one month from today. In case appeals are filed within the said period, they will not be dismissedon the groundot limitation. However,in the appellateproceedings,the petitionerwill not be entitledto challengethe W.P.(C)14076/2009,14077/2009,14085/2009&14096/2009 reopening of the assessments. As both the parties have partly succeeded, there will be no orders as to costs. December 2012 NA/kkb W.P.(C)14076/2009,14077/2009,14085/2009&14096/2009 (SANJIVKI-IANNA) JUDGE (R.V. EASWAR) JUDGE Page Z5 of 25

r * IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on : 2"^November 2012 % Date of Decision; 4"' December, 2012 + WRIT PETO ON (CIVIL) NQS. 14077/2009, MEINHARDT SINGAPORE PTE LTD. Petitioner Through Mr. C.S. Aggarwal, Sr. Advocate with Mr. Prakash Kumar, Advocate. VERSUS ASSISTANT DIRECTOR OF INCOME TAX, CHICLE 3(1), INTERNATIONAL TAXATION, NEW DELHI Respondent Tln'ough Mr. Sanjeev Sabharwal, Sr. Standing Counsel & Mr. Puneet Gupta, Standing ^ Counsel. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE R.V. EASWAR