Assessment order invalidated due to late notice, rendering proceedings illegal. Appeal allowed, assessment quashed.

The Tribunal found that the assessment order dated 27.10.2010 was invalid as the notice under Section 143(2) was served beyond the prescribed time limit. Consequently, all proceedings stemming from the notice were deemed illegal. The appellant's appeal was allowed, and the assessment was quashed.

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Issues Involved:

1. Validity of the assessment order dated 27.10.2010.
2. Limitation period for serving notice under Section 143(2).
3. Attribution of income to the appellant.
4. Permanent Establishment under Article 5(1) of the Indo-Belgium Double Taxation Avoidance Agreement.
5. Principles of natural justice regarding information gathered ex-parte.
6. Charging of interest under Section 234B of the IT Act.

Detailed Analysis:

1. Validity of the Assessment Order:
The appellant challenged the assessment order dated 27.10.2010, arguing it was barred by limitation and void ab initio. The appellant contended that the notice under Section 143(2) was served beyond the prescribed time limit, making the assessment order invalid. The Tribunal examined the provisions of Section 144C read with Section 143(3) and concluded that the assessment order was indeed barred by limitation.

2. Limitation Period for Serving Notice under Section 143(2):
The appellant argued that the notice under Section 143(2) was served beyond the prescribed time limit. The Tribunal discussed the relevant legal provisions, including the Proviso to Section 143(2)(ii) and the General Clauses Act, 1897. The Tribunal emphasized that the amended Proviso to Section 143(2)(ii), effective from 01.04.2008, was applicable, which required the notice to be served within six months from the end of the financial year in which the return was furnished. The Tribunal held that the notice issued on 30.09.2008 and served on 01.10.2008 was beyond the limitation period, rendering the assessment invalid.

3. Attribution of Income to the Appellant:
The appellant contested the attribution of taxable income of Rs.33,97,361 by the Assessing Officer and the Dispute Resolution Panel (DRP). The Tribunal noted that the appellant argued no sale had been concluded or supplies made during the relevant year, and the amount received was only an advance. The Tribunal did not delve into this issue further, as the assessment itself was held invalid due to the time-barred notice.

4. Permanent Establishment under Article 5(1) of the Indo-Belgium Double Taxation Avoidance Agreement:
The appellant argued that the Indian Liaison Office of the non-resident foreign company did not constitute a Permanent Establishment (PE) in India. The Tribunal noted the appellant's contention that the Assessing Officer and DRP erred in deeming the Liaison Office as a PE without sufficient evidence. However, this issue was not adjudicated upon separately, as the assessment was already held invalid.

5. Principles of Natural Justice Regarding Information Gathered Ex-parte:
The appellant contended that the Assessing Officer and DRP violated the principles of natural justice by drawing adverse inferences based on ex-parte information from Indian customers without providing an opportunity to rebut the same. The Tribunal acknowledged this contention but did not address it in detail due to the invalidity of the assessment.

6. Charging of Interest under Section 234B of the IT Act:
The appellant challenged the charging of interest under Section 234B. The Tribunal did not specifically address this issue as the primary ground of the time-barred notice rendered the assessment invalid.

Conclusion:
The Tribunal concluded that the notice under Section 143(2) was served beyond the prescribed time limit, making the assessment order dated 27.10.2010 invalid. Consequently, all proceedings pursuant to such notice were held to be illegal. The appeal of the assessee was allowed, and the assessment was quashed. The order was pronounced in the open court on 20.12.2013.

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