TaxTMI 
TaxTMI 
2024 (8) TMI 55
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....ioner cannot be accorded relief which would result in the assessed income falling below that which was disclosed in the Return of Income. It has, in the aforesaid context, also sought to draw sustenance for the aforesaid view by relying upon the judgment of the Supreme Court in Commissioner of Income Tax vs. Sun Engineering Works (1992) 4 SCC 363. 2. This becomes evident from a reading of the following paragraphs as forming part of that draft order:- "14. The detailed contentions on various aspects are considered. However, it should be noted that while the formula was agreed for AY. 1998-99 to Α.Υ. 2004-05, the assessee on its own offered its income based on formula in A.Υ. 2005-06. Thereafter, additional claims are being filed requesting to reduce the income below returned income of the assessee is not tenable as per CBDT Circular No. 549 dated 31-10-1989, wherein it is held that assessed income shall not be less than returned Income. Reference can also be placed on the SC judgment the in case of Commissioner of Income-tax vs Sun Engineering Works (P.) Ltd (Civil Appeals No. 3251-52 of 1979) wherein in context of s. 147, the SC held as under: "The assess....
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....ned demand notices as well as penalty notices are stayed. It is clarified that the final assessment order dated 30th November, 2021 shall be subject to the final outcome of the accompanying writ petitions." 4. For the purposes of disposal of the present writ petitions, we take note of the following essential facts. The petitioner is an incorporated company and is a tax resident of Japan. For Assessment Year [AY] 2005-06, it filed its Return of Income on 31 October 2005, declaring an income of INR 4,18,98,800/- A revised return thereafter came to be submitted enhancing the declared income to INR 61,05,41,430/-. The aforesaid revision, according to the petitioner, was on the basis of a sum of INR 53.82 crores being attributable to activities of its Liaison office in India and INR 3.06 crores in respect of actual sales made to the Delhi Metro Rail Corporation. These revisions, according to the writ petitioners, were necessitated in light of the settlement which had been arrived at with the respondents in earlier years. However, the AO while framing an order of assessment on 31 December 2008 refused to accept the aforesaid declarations and thus chose not to proceed in accordance with ....
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....4.2 That on the facts of the case and in law, the Assessing Officer ought to have appreciated that the Indian subsidiary does not constitute a PE for the assessee in India and the observation/passing reference made by the AO in earlier years order was without examining any facts in relating to the Indian Subsidiary; 4.3 Without prejudice to the Ground Nos. 4, 4.1 and 4.2 above, the Assessing Officer ought to have appreciated that since the Indian subsidiary is remunerated on arm's length, any PE which is constituted of the appellant on account of the activities of the Indian subsidiary, gets extinguished. 5. That on the facts of the case and in law, the Assessing Officer erred in allowing the deduction for the expenses incurred in relation to the operations of the La only to the extent of 50% inspite of the facts that as per the provisions of the law such expenses should be allowed to the extent of 100%. 6. That on the facts of the case and in law, the Assessing Officer erred in applying the rate of 50% for the purpose of attributing income to the operations of La without considering the fact that the major revenue generating activities were performed outside India and no....
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....ns of sub-section (i) of the new section 143, an assessment is not to be made now, the provisions of sub-sections (2) and (5) have also been recast and are entirely different from the old provisions. A notice under sub-section (GBP) which will be issued only in cases picked up for scrutiny, is now issued only to ensure that the assessee has not understated his income or has not computed excessive loss or has not underpaid the tax in any manner while furnishing his return of income. This means that, under the new provisions, in an assessment order passed under section 143 (3) in a scrutiny case, neither the income can be assessed at a figure lower than the returned income, nor loss can be assessed at a figure higher than the returned loss, nor a further refund can be given except what was due on the basis of the returned income, and which would have already been. allowed under the provisions of section 143 (1) (a) (ii)." 9. It is in the aforesaid backdrop that learned counsel drew our attention to some of the significant amendments introduced in Section 143 (3) of the Income Tax Act, 1961 [Act] as was applicable for AY 2005-06 and constituting the year under consideration. The amen....
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....standing the above, learned counsel for the petitioner submitted that since the additional grounds had come to be accepted by the Tribunal and peremptory directions framed for the issue being re-examined, the AO was clearly unjustified in taking the view that those aspects could not be considered. Learned counsel for the petitioner further submitted that while ordinarily an assessee may be bound by a return as submitted and stand restrained from advocating any deviations therefrom, except by way of filing of a revised return, that restriction would have no application when an assessment is liable to be undertaken pursuant to a direction framed by a Court or a Tribunal. 12. It was contended by Mr. Nagi, learned counsel for the petitioner, that the decision of the Supreme Court in Goetze (India) Ltd. Vs. Commissioner of Income Tax 2006 SCC OnLine SC 1446 itself recognizes this position as would be evident from the following passage: - "4. The decision in question is that the power of the Tribunal under section 254 of the Income-tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal....
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....stant Commissioner, the Supreme Court observed that (page 386 of 229 ITR) : "An appellate authority has all the powers which the original authority may have in deciding the question before it subject to the restrictions or limitations, if any, prescribed by the statutory provisions. In the absence of any statutory provision, the appellate authority is vested with all the plenary powers which the subordinate authority may have in the matter. There is no good reason to justify curtailment of the power of the Appellate Assistant Commissioner in entertaining an additional ground raised by the assessee in seeking modification of the order of assessment passed by the Income-tax Officer. This court further observed that there may be several factors justifying the raising of a new plea in an appeal and each case has to be considered on its own facts. The Appellate Assistant Commissioner must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. The Appellate Assistant Commissioner should exercise his discretion in permitting or not permitting the assessee to raise an additional ground in accordance with law and reason. Th....
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.... appeal against the order is pending before the AAC, and (ii) when the order has been subject to an appeal to the Income-tax Appellate Tribunal. Subject to the above limitation, the revisional powers conferred on the Commissioner under s. 264 are very wide. He has the discretion to grant or refuse relief and the power to pass such order in revision as he may think fit. The discretion which the Commissioner has to exercise is undoubtedly to be exercised judicially and not arbitrarily according to his fancy. Therefore, subject to the limitation prescribed in s. 264, the Commissioner in exercise of his revisional power under the said section may pass such order as he thinks fit which is not prejudicial to the Assessee. There is nothing in s. 264 which places any restriction on the Commissioner's revisional power to give relief to the Assessee in a case where the Assessee detracts mistakes on account of which he was over-assessed after the assessment was completed. We do not read any such embargo in the Commissioner's power as read by the Commissioner in the present case. It is open to the Commissioner to entertain even a new ground not urged before the lower authorities whil....
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....ssioner of Income Tax (supra) held that while the AO could not permit a claim to be made after the filing of the return without the Assessee revising it prior to the assessment order, it did not impinge on the scope of the revisionary jurisdiction of the CIT." 16. Any doubt which could have possibly been harboured in this respect in any case stands laid to rest bearing in mind the recent judgment rendered by the Supreme Court in Wipro Finance Ltd. v. CIT (2022) 443 ITR 250. As would be evident from a reading of paragraph 10 of the report, an identical objection appears to have been raised on behalf of the Revenue with it being contended that since the assessee had taken a particular position with respect to an item of expenditure in the return, not only was the Tribunal disentitled in law to entertain a fresh claim, the same in any case could not have been taken into consideration for the purposes of according relief to the assessee. 17. The aforesaid contention came to be negated by the Supreme Court in the following terms:- "10. The learned Additional Solicitor General appearing for the Department had faintly argued that since the appellant in its return had taken a conscious....