AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 404
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.... That impugned final assessment order is illegal , beyond jurisdiction and void ab initio since the ACIT, Circle-1, Moradabad (the jurisdictional Assessing officer) erred in transferring the case of the appellant without serving any notice under section 127 of the Act or providing copy of order, if any, passed under that section for transfer of case of the appellant. Assessment concluded pursuant to draft assessment order passed contrary to mandate of section 144C - impugned order is void ab initio and liable to be quashed. 3. That on the facts and circumstances of the case, the impugned final assessment order passed under section 147 r.w.s. 144C(13) of the Act is illegal , beyond jurisdiction and void ab initio and ex-facie contrary to the mandate of provisions of section 144C read with section 143(3) of the Act and consequently, deserves to be quashed in toto. 4. That on facts and circumstances of the case and in law, the assessing officer erred in passing a draft assessment order under section 144C(1) without appreciating that the appellant does not qualify as an 'eligible assessee' under section 144C(15) of the Act in the absence of any variat....
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....which is the actual proof of exit from the country. 8.4 That on the facts and circumstances of the case, the assessing officer/DRP erred in not appreciating that while computing number of stay days in India "from the date of arrival" "to the date of departure" of an assessee, the first date i.e. , the date of arrival is to be excluded. 9. That on the facts and circumstances of the case, the DRP erred on facts and in law in passing revised directions under Rule 13 of Income Tax (Dispute Resolution Panel) Rules 2009, withdrawing the exemption of salary income arising under employment contract with Singapore Company from taxation in India under Article 15 of Double Taxation Avoidance Agreement ("DTAA') and holding that salary income to be taxable in India on the ground that the appellant was held to be resident in India and thus, global income ought to be taxed in India, without appreciating that the said benefit under the DTAA was available even if appellant was considered to be a resident in India. 10. That on the facts and circumstances of the case, the DRP erred on facts and in law in exercising the power under Rule 13 of Income Tax (Dispute Resoluti....
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.... 5. The Bench had asked the ld. DR to clarify as to whether any transfer order u/s 127 of the Act was passed for transferring the case of the Assessee. In response, vide revised written statement dated 20.01.2023, reiterated in her arguments by the ld. DR, it has been submitted that vide jurisdiction order No. 2/2020, dated 22.12.2020, passed by the ld. Principal Chief Commissioner of Income Tax (International Taxation), New Delhi, the ADIT / DDIT (International Tax), Lucknow held concurrent charge over all persons / class of persons who are assessed / assessable within the jurisdiction of the Principal CIT/CIT, Bareilly; that since the Assessee had filed return of income claiming status of non-resident , the jurisdictional Assessing Officer had no jurisdiction over the case and the correct jurisdiction vested with the ADIT/DDIT (International Tax), Lucknow; that as such, this was not a normal case where the PAN was transferred from the AO of one PCIT's jurisdiction to the AO of another PCIT's jurisdiction, requiring an order u/s 127 of the Act to be passed; that rather, it was a case of concur rent jurisdiction which Assessing Officers of International taxation charge have over....
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....127 of the I.T. Act :- "127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the Assessing Officer or Assessing Officers to whom the case is to be transferred are not subordinate to the same Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner,- (a) where the Principal Directors General or Directors General or Principal Chief Commissioners or Chief Commissioners or Principal Commissioners or Commissioners to whom such Assessing Officers are subordinate are in a....
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....d that the transfer of the case suo motu by the Assessing Officer at Agra to the Assessing Officer at Delhi , both Assessing Officers being subject to jurisdiction of different Commissioners, was unsustainable, since there was no transfer order u/s 127 of the I.T. Act, rendering the assessment order passed by the AO at Delhi void ab initio. 9. In 'Ajantha Industries Vs. CBDT', (supra), it was held that while making an order of transfer u/s 127 of the Act, the requirement of recording reasons is a mandatory direction under the law and non-communication thereof to the Assessee was a serious infirmity in the order, for which, the order was invalid. 10. In 'Vinay Kumar Jaiswal Vs. CIT', (supra), it was held that wherever it is proposed to transfer a case from one Assessing Officer to another, a notice has to be given u/s 127, indicating the reasons for the proposed transfer; that mere filing of objections by the Assessee does not comply with the requirement of section 127, unless the Assessees know the reasons for the proposed transfer, they will not be able to properly meet the basis of the proposed transfer; and that even non-communication of the transfer order is a serious inf....
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....Et Compagnie Vs. ACIT', 437 ITR 1 (Delhi). 16. It has been pointed out that the provisions of section 144 C (15) (b) of the Act have been amended vide the Finance Act, 2020, w.e.f. 1.4.2020, to enlarge the definition of 'eligible essessee' to include any 'non-resident (not being a Company) '. It has been submitted that the amendment is applicable prospectively from assessment year 2020-21 and, therefore, not for the year under consideration, i .e. , assessment year 2016-17. Reliance in this respect has been placed on 'IPF India Property Cyprus. (No.1) Ltd. Vs. DCIT (IT)', 183 ITD 46 (Mumbai), 'Dy. Commissioner of Income Tax (International Taxation) Vs. Pramerica ASPF II Cyprus', 137 taxmann.com 380 (Mumbai), 'Silver Bella Holdings Ltd v ACIT (international Taxation) ', 189 ITD 678 (Delhi) and 'Superbrands Ltd. [U.K.] Vs. ACIT , Circle 1(1)(2)(International Taxation), New Delhi', ITA No. 3315 / Delhi /2009, for assessment year 2005-06 and other appeals, order dated 20.09.2022. 17. It has been contended, apropos ground No.5, that as a sequitur, if the provisions of section 144C of the Act are not applicable, the present assessment is time barred, the extended limitation of nine....
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....son is proposed to be made by the AO, which variation arises in consequence of the TPO's order, and any foreign company. Section 144(1) requires a draft of the proposed assessment order to be forwarded by the AO to such eligible assessee. 24. In the present case, vide the assessment order dated 28.6.2022, the Assessee has been held to be a resident in India, as a consequence whereof, salary income earned by the Assessee in Singapore has been taxed in India. 25. Then, in the Assessee's case, no variation prejudicial to his interest, at the hands of the AO, has arisen as a consequence of the order passed by the TPO under section 92CA(2) of the Act , nor is the Assessee a foreign company. Therefore, neither of the conditions prescribed by section 144C (15) (b) stands fulfilled and as such, the Assessee is not an 'eligible assessee' within the meaning of section 144C (15). Hence, as correctly contended, there was no question of the AO passing a draft proposed assessment order under section 144C(1). 26. Further still, the Assessee being an individual , even in case he were to be held to be a non-resident , he would not fall within the definition of 'eligible assessee', as presc....
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....s a resident and no dispute against this has been raised before us, and then, no case of retrospective applicability of the amended provisions of section 144C(15)(b) has also been pleaded. 31. Accordingly, Ground Nos. 3 and 4 are accepted. 32. This takes us to Ground No.5, with regard to which, it has been pleaded that the provisions of section 144C of the Act being not applicable in the present case, there was not requirement to pass draft assessment order, due to which, the extended limitation of nine months u/s 144C(12) was not available and that the assessment order ought to have been passed within the time limit provided for u/s 153(2) of the Act. 33. We have held the provisions of section 144C of the Act to be not applicable to the case of the Assessee. Section 144C(12) provides that no direction u/s 144C(5) shall be issued by the DRP for the guidance of the AO to enable him to complete the assessment , after nine months from the end of the month in which the draft order is forwarded to the 'eligible assessee'. The Assessee was not an 'eligible assessee' and no draft order was to be forwarded to him, as observed by us herein-before. Therefore also, the requirement of....