2022 (12) TMI 1425

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....d to as 'The Act']. 2. Since common grievances are involved and the underlying facts are also identical, both these appeals were heard together and are disposed of by this common order for the sake of convenience and brevity. 3. In fact, the CIT, International Taxation - 2 has framed order u/s 263 r.w.s 163 of the Act in respect of both the appellants by a common order. For the sake of our convenience and with the consent of both the representatives, we are considering the facts of ITA No. 2022/DEL/2021. 4. Grievances raised by the assessee read as under: "The appellant objects to the order dated 31 March 2021 (received on 10 December 2021) passed under section 263 r.w.s. 163 of the Income Tax Act, 1961 ('the Act')....

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.... learned CIT erred in not serving on the appellant the notice issued under section 263 of the Act fixing the hearing on 26 March 2021. 7. The learned CIT erred in not serving on the appellant the show-cause notice issued under section 263 of the Act fixing the hearing on 30 March 2021. 8. The learned CIT erred in not providing/ serving the appellant with a copy of the document / information relied upon while passing the order passed under section 263 r.w.s 163 of the Act. The appellant therefore submits that the order passed by the learned CIT is violative of the principles of natural justice and therefore ought to be quashed. 9. The learned CIT erred in basing his conclusions on various erroneous assumptions and ....

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....quashed. 15. Each one of the above grounds of appeal are distinct and separate and without prejudice to the other. 16. The appellant craves leave to add, alter or delete any or all of the above grounds of appeal, at any time before or at the time of appeal hearing." 5. At the very outset, the ld. counsel for the assessee emphatically raised three issues for our kind consideration: (i) The ld. CIT has no power to pass order u/s 163 of the Act; (ii) When the principal has been assessed to tax by the Assessing Officer, can proceedings be initiated against the representative u/s 163 of the Act? (iii) When the principal has been liquidated and is no more in existence, can there be a representative ....

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....o notice u/s 263 of the Act. 10. Subsequently, an order u/s 163 of the Act was passed on 27.03.2021 holding Cairnhill CIPEF Limited and Cairnhill CGPE Limited as representative assessee /agent of Monet Limited for Assessment Year 2016-17 and once again, notice u/s 263 of the Act was issued to Cairnhill CIPEF Limited and Cairnhill CGPE Limited as representative assessee of Monet Limited fixing the date of hearing on 31.03.2021. 11. On receiving no plausible reply, order u/s 263 r.w.s 163 of the Act was framed u/s 31.03.2021. 12. Adverting to the issue raised by Shri Pardiwalla, the ld. counsel for the assessee that whether the CIT has power to pass an order u/s 163 of the Act, let us see the provisions of section 163 which reads as ....

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....by the Assessing Officer as to his liability to be treated as such." 13. A bare perusal of the aforementioned section does not show the authority as to who can pass the order u/s 163 of the Act. Though section 246 of the Act which contains the provisions relating to the appealable orders before the CIT at clause (d) which mentions "An order made u/s 163 of the Act treating the assessee as agent of the non agent" which means that the order u/s 163 of the Act is to be passed by an authority below the rank of a commissioner, because if the commissioner passes the order, then it cannot be appealed against before the ld. CIT(A). 14. Section 253 of the Act contains the provisions relating to appeals to the appellate Tribunal and in the said....

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....hen the alleged representative/agent are also non-residents. 19. Vide order dated 19.12.2018, Corporate and Business Registration Department of Port Louis ordered as under: "Take notice that the Category 1 Global Business Company Money Limited bearing File No. C60444 has been removed from the register u/s 308 of the Companies Act, 2001 as from today."  Sd/-  F. Sudally [Mrs]  For Registrar of Companies 20. By this order, it is clear that Principal Monet Limited has been extinguished. Then how can there be representative /agent of nonexisting company. Provisions of section 163 of the Act are not akin to that of section 159 wherein a legal heir is substituted in place of a deceased assessee. This answers....