TaxTMI 
TaxTMI 
2015 (7) TMI 840
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....alid and further erred in holding that the assessment made by the Assessing Officer is valid. (4) The Assessing Officer and the DRP are not justified in treating the amount paid by the Joint Venture to Sino Hydro Corporation as the business income assessable u/s. 44DA of the Act. (5) The learned Assessing Officer and the DRP ought to have seen that the provisions contained in Article XII of the DTAA between India and China would apply to the payments made and the appellant deducted tax at source correctly in accordance with the provisions of the DTAA. Both the Assessing Officer and DRP ought to have seen that the correct amount of tax was deducted at source in view of Article 12 of the DTAA between India and China and, therefore, no further assessment is required to be made on the appellant treating it as an Agent. (6) Without prejudice to the contention of the appellant that no part of the amount paid by the Joint Venture is assessable as the business income, the Assessing Officer and the DRP are not justified in holding that 70% of the amount paid is taxable as the business income of the foreign company. (7) The learned Assessing Officer and the DRP ought to have seen tha....
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....of the Act with the stamp of "YES" on 30.03.2013. He submitted that there was no approval given by the concerned C.I.T., in the case. Therefore, he submitted that the reassessment proceedings were null and void ab initio. 6. On the other hand, the learned CIT DR placed reliance on the orders of the lower authorities. 7. We heard the rival parties and perused the material on record. A mere perusal of the reasons recorded by the Assessing Officer reveals that the basis for initiating the reassessment proceedings is the order of this Hon'ble Tribunal in I.T.A.Nos.646&701/Hyd/2010 dated 27.11.2012 in the case of M/s. Madhucon Sino Hydro JV, at para `12, which reads as under: "However, it has to be verified whether the Chinese concern has offered this income for tax in India. If the Chinese concern has not filed Income Tax return and offered this amount as part of their income in computing their taxable income in India the Assessing Officer may take suitable action for bringing the amount to tax in accordance with provisions of the I.T. Act, 1961." 8. The ITO, Ward-6(3), Hyderabad had passed on this information to the Assessing Officer of M/s. Sino Hydro Corporation. He informed th....
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....y the Hon'ble Supreme Court in the case of Rajinder Nath vs. CIT 120 ITR 14 as follows:- "The expression 'finding' and 'direction' in section 153(3) are limited in meaning. A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year. To be a necessary finding, it must be directly involved in the disposal of the case. It is possible in certain cases that in order to render a finding in respect of A, a finding in respect of B may be called for. For instance, where the facts show that the income can belong either to A or B and to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A's income. A finding respecting B is initially involved as a step in the process of reaching the ultimate finding respecting A. If, however, the finding as to A's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only. It is not a finding nece....
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....ercise of jurisdiction u/s. 147 of the Act is not fulfilled. 12. We further notice that this order of assessment also suffers from the vice of illegality for want of sanction from the competent authority. Admittedly, in this case, the reassessment notice was issued after the expiry of 4-years from the end of the relevant assessment year and, therefore, as per provisions of Section 151 of the Act; the sanction of the Commissioner of Income Tax is required before issue of the notice u/s. 148 of the Act. Whereas in the present case, it is only the Addl. Commissioner of Income-tax (International Taxation), Hyderabad, who accorded sanction vide proceedings No.ADIT(IT(I)/AAMFM1451G/2012-13, dated 30.03.2013, that too, without there being a satisfaction, application of mind on his part. Therefore, the requirements of Section 151 of the Act were not complied with by the Assessing Officer. There is long line of authorities in support of the proposition that non-compliance of the provisions with Sec. 151 of the Act would vitiate the notice issued u/s. 148, as well as the resultant reassessment proceedings, relying on the decision of Hon'ble Supreme Court in CIT vs. Maharaja Pratap Singh (19....