2022 (4) TMI 1527 - AT - Income Tax

Tribunal upholds CIT(A)'s decision to quash assessment order for 2014-15 under Income Tax Act

Deputy Commissioner of Income Tax (IT) -3 (3) (2) Mumbai Versus M/s Pramerica ASPF II Cyprus

The tribunal upheld the CIT(A)'s decision to quash the assessment order for the assessment year 2014-15 under the Income Tax Act. The tribunal found that ... Applicability of provisions of section 144C - whether no variation in the income returned and the income assessed and accordingly the impugned assessment order was time barred? - HELD THAT:- This issue is covered in favour of the assessee by a series of order of the coordinate benches including in the cases of IPF India Property Cyprus Ltd. 2020 (2) TMI 1667 - ITAT MUMBAI], Cupiono Ltd. [2021 (4) TMI 1357 - ITAT MUMBAI], Mausmi SA Investments LLC [2019 (4) TMI 2079 - ITAT MUMBAI], Mosbacher India LLC. [2016 (12) TMI 235 - ITAT CHENNAI], DCIT vs. Magna International Inc [2019 (1) TMI 1199 - ITAT PUNE] AND Regen Renewable Energy Generation Global Limited [2020 (1) TMI 1632 - ITAT CHENNAI], even though learned Departmental Representative vehemently relied upon the stand of the Assessing Officer as embedded in the grounds of appeal set out herein above. Thus provisions of section 144C did not apply to the fact of this case as there was no variation in the income returned and the income assessed and accordingly the impugned assessment order was time barred. Decided in favour of assessee. Issues involved:1. Challenge to the correctness of the order dated 27th August 2019 passed by the CIT(A) in the matter of assessment u/s. 143 (3)/144C(3) of the Income Tax Act, 1961 for the assessment year 2014-15.2. Justification of quashing the assessment order by CIT(A) and its impact on the assessee's interest.3. Grave error in law by CIT(A) regarding variation in income and tax liability.4. Failure to decide the issue of 'beneficial ownership of interest' by the assessee.5. Error in quashing the assessment order by CIT(A) and its curability under section 292B of the IT Act.6. Interpretation of the provisions of section 144C and the time bar on the assessment order.Detailed Analysis:1. The Assessing Officer challenged the correctness of the order dated 27th August 2019 passed by the CIT(A) for the assessment year 2014-15. The main issues raised included the justification of quashing the assessment order, the impact on the assessee's interest, and the legality of enhancing the tax liability by two times.2. The first issue revolved around whether the CIT(A) was justified in quashing the assessment order passed by the AO under various sections of the IT Act. The appellant argued that enhancing the tax liability was prejudicial to the assessee's interest. The second issue concerned the application of different tax rates on interest income, leading to a higher tax liability for the assessee.3. The third issue highlighted the error in law by CIT(A) regarding the variation in income resulting in a higher tax liability for the assessee. The AO increased the tax rate on interest income, impacting the assessee's tax liability significantly.4. The fourth issue pointed out the failure of the CIT(A) to decide the issue of 'beneficial ownership of interest' by the assessee on its merits. The appellant contended that this issue was crucial and should have been adjudicated properly.5. The fifth issue addressed the error in law by CIT(A) in quashing the assessment order without considering the curability under section 292B of the IT Act. The appellant argued that the draft assessment order was in conformity with the Act and the mistake was curable.6. The final issue involved the interpretation of the provisions of section 144C and the time bar on the assessment order. The tribunal analyzed the applicability of section 144C and upheld the conclusion arrived at by the CIT(A) based on the views of coordinate benches, dismissing the appeal and declaring the assessment order as time-barred.