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"Reasons recorded for issue of Notice u/s 148 of the Income Tax Act, 1961 in the case of M/s. Alcatel-- Ay 2003-04 (Sic 2004-05) 29.03.2011 The assessee is a company incorporated under the laws of France and is the supplier of hardware and software products for GSM cellular radio telephone system. During the relevant year it had supplied telecommunication hardware and software to various customers in India. The assessee had filed return of income claiming that the assessee does not have a permanent establishment in India. In the assessment order passed on 23.03.2010 it is held that the assessee had a PE in India and the profits are attributable to the PE in India and the software income earned by the assessee was taxed as royalty income under the provisions of the Act and the tax treaty.

"The assessee is a company incorporated under the laws of France and is the supplier of hardware and software products for GSM cellular radio telephone system. During the relevant year it had supplied telecommunication hardware and software to various customers in India. The assessee had filed return of income claiming that the assessee does not have a permanent establishment in India. In the assessment order passed on 30.03.2006 it is held that the assessee had a PE in India and the profits are attributable to the PE in India and the software income earned by the assessee was taxed as royalty income under the provisions of the Act and the tax treaty.

As required by section 151 of the income-Tax Act 1961, the reasons are hereby put up for the kind perusal and recording of satisfaction."

17. The objections of ALF to the above notice dated 31 st March 2010 were rejected by an order dated 5th December 2011. Both the above notice and the order were challenged by ALF in W.P.(C) No. 8739 of 2011 in this Court. In a judgment dated 15th May, 2012 in the said writ petition (Alcatel-Lucent France v. ADIT), this Court concluded that in the original assessment proceedings under Section 143(3) of the Act (i.e. for AY 2003-04) the question of taxability of income as well as the rate of tax had been specifically examined. The Court held that ALF disclosed the said income in its revised return. In the assessment order dated 30th March 2006, it had been held that the fee for licensing of the software to the Indian customers was taxable as royalty/FTS under Article 13 of the DTAA and Section 9(1)(vi) and (vii) of the Act, and that income was subjected to tax @ 10%. As already noticed, the said order of the AO was reversed in appeal before the CIT(A) whose order has been affirmed both by the ITAT as well as by this Court. The Court further held that "no new fact had come to the knowledge of the Assessing Officer after completion of the original reassessment proceedings" and the mere reconsideration of the some facts would not justify initiating the reassessment proceedings. Accordingly, the notice dated 31st March 2010 under Section 148 of the Act for AY 2003-04 as well as the order dated 5th December 2011 rejecting ALF's objections thereto were quashed by the Court. The aforementioned judgment dated 15th May 2012 in W.P.(C) No. 8739 of 2011 does not appear to have been challenged by the Revenue.