JUDGMENT :

N.J. JAMADAR, J.

1. Rule. Rule made returnable forthwith. With the consent of learned counsel for the parties, heard finally.

2. By virtue of this petition under Article 226 of the Constitution of India, the petitioner assails the notice dated 26th February 2019, under section 148 of the Income Tax Act, 1961 (‘the Act 1961’), issued by the respondent No. 2-Assistant Commissioner of Income Tax, Circle 13(1)(1) seeking to reopen the assessment for the assessment year 2014-15 and the order dated 18th October 2019 passed by respondent No. 2 (the Assessing Officer) rejecting the petitioner’s objection to reopening of assessment for assessment year 2014-15.

3. The petition arises in the backdrop of the following facts:

(a) The petitioner-company is engaged in the business of providing comprehensive information technology solutions to banks and other financial institutions globally. The petitioner develops and markets software products and operates primarily in two business segments:

(i) Products.

(ii) Services.

Under the product business, the petitioner markets its package application software and derives revenue from license fee, customization fee and annual maintenance charges. Under the Service business, the petitioner provides services to customers which include IT solutions and consulting and professional services according to customer's requirements and standards.

(b) For the said business, the petitioner has subsidiaries in different countries. The installation and implementation of the product at the location of the overseas customers requires the presence and supervision of technical personnel. These personnel are temporarily seconded by petitioner on employment basis to the overseas subsidiaries to perform such functions. During the period of secondment, the personnel are kept on employment and payroll of the overseas subsidiaries. Their salary and related expenses are subsequently reimbursed by the petitioner to the said subsidiaries, on a cost to cost basis.

(c) For the assessment year 2014-2015, the petitioner fled its return of income on 28th November 2014. The petitioner’s case was selected for scrutiny assessment under the Computer Aided Scrutiny Selection (CASS) and one of the stated parameters for selection of the petitioner’s case was “large outward remittances made to non-residents.”

(d) During the course of assessment, the petitioner fled, inter-alia, copies of its Audited Financial Statements, Tax Audit report in Form 3CD under section 44AB of the Act, 1961 and Accountant’s report in Form 3CFB under section 92E of the Act, 1961.

(e) The Assessing Officer, in a notice dated 14th November 2017, specifically stated that large outward remittances to foreign companies was the prime reason for scrutiny assessment and called upon the petitioner to furnish necessary details and explanation. It is the case of the petitioner that the petitioner explained that the foreign remittances were, inter-alia, towards reimbursement of expenses incurred by its overseas subsidiaries on its behalf. Necessary details including particulars in Form No. 15CA and Form 15CB were furnished. Copies of several invoices and debit notes raised by the overseas subsidiaries on the petitioner for reimbursing the employee cost were also fled alongwith letter dated 11th December 2017.

(f) During the course of assessment, the Assessing Officer made a reference to Additional Commissioner of Income Tax, Transfer Pricing Officer, 3(1) (‘TPO’) under section 92CA(I) of the Act, 1961. Thereupon the petitioner fled a copy of transfer pricing study report. The TPO, in turn, called upon the petitioner to submit details in respect of reimbursement of expenses to the overseas subsidiaries. The petitioner again furnished the requisite information along with entity-wise break-up and details of employee cost and other costs reimbursed by the petitioner, vide letter dated 21st July 2017. The TPO passed an order under section 91CA(3) of the Act, 1961 on 30th October 2