TaxTMI 
TaxTMI 
2024 (8) TMI 352
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....ircle 1(1), Chennai ('Ld. AO') under section 143(3) r.w.s 147 r.w.s 144C(13) of the Income-tax Act, 1961 ('the Act') is bad in law and is contrary to the facts and circumstances of the present case. The detailed grounds of appeal being independent and without prejudice to one another, including the position in law and facts is set out in the ensuing paragraphs. 2. Ground 2 Addition of Guarantee Fees received from Hyundai Transys Lear Automotive India Private Limited ('Indian Subsidiary') amounting to INR 3,908,249 (Tax effect-INR 1,641,465) 2.1. The Ld. AO and Dispute Resolution Panel ('DRP') has failed to appreciate the facts of the case and has erroneously concluded that the guarantee fees received by the Appellant amounting to INR 3,908,249 accrues and arises in India and is liable to tax in India under section 5(2) r.w.s section 9(1)(i) of the Act at the rate of 40 percent plus applicable surcharge and cess. 2.2. The Ld. AO and DRP erred on facts and in law in holding that the situs of issue of guarantee in respect of loans availed by Indian subsidiary is in India and therefore, guarantee fees was considered as income in India in terms of....
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....Tax Appellate Tribunal Rules 1963: '3. Ground 3: Reassessment Proceedings initiated is barred by limitation 3.1 The Ld. AO erred in facts and law without appreciating the fact that the Guarantee fee received by the Appellant amounting to INR 3,908,249 is less than the threshold limit of INR 5,000,000 prescribed under section 149(1)(b) of the Income-tax Act, 1961 ('the Act') as amended vide Finance Act, 2021, read with CBDT Instruction No. 01/2022 and as a result the case cannot be subjected to reassessment proceedings and such proceedings conducted by the Ld. AO is barred by limitation and liable to be quashed. 3.2 The Ld. AO erred in facts and law in initiating reassessment proceedings by issuing a notice under section 148 of the Act on 15 April 2021 without taking cognizance of the amended provisions of sections 148 to 151 of the Act as it existed as on the date of issuance of such notice, and the procedures prescribed thereunder are mandatory in nature and binding on the Ld. AO to follow in letter and spirit. 3.3 The Ld. AO has erred by not obtaining sanction for issuance of notice under section 148 of the Act as contemplated under section 151 of the Act''. 4. L....
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.... that question in order to correctly assess the tax liability of an assessee. 8. The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits''. 9. Similarly, the Hon'ble Jurisdictional High Court of Madras in the case of CIT Vs Indian Bank [(2015) 230 Taxman 635 (Madras)] held as under: ''4. The appellant /Revenue has challenged that portion of the order of the Tribunal allowing the raising of additional grounds contending that additional grounds ought not to have been raised before the Tribunal on the plea which was not adjudicated before the CIT (Appeals). 5. Heard learned Standing Counsel appearing for the Revenue and perused the materials placed before this Court. 6. Rule 11 of the Income Tax Appellate Tribunal Rules provides for raising of additional grounds, which reads as follows: "Grounds which may be taken in appeal. 11. The appellant shall not, except by le....
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....ed assessment is a jurisdictional fact and only on its satisfaction does the Assessing Officer acquire jurisdiction to issue notice. Thus this lack of satisfaction of jurisdictional fact can never confer jurisdiction and an objection to it can be raised at any time even in appeal proceedings. The mere fact that no objection is taken before the Assessing Officer would not by itself bestow jurisdiction as the Assessing Officer. Such an objection can be taken in appeal also. Moreover, the Apex Court in its recent decision in Kanwar Singh Saini v. High Court of Delhi [2012] 4 SCC 307 has held that it is settled position that conferment of jurisdiction is a legislative function and cannot be conferred by consent of petitioner. An issue of jurisdiction can be raised at any time even in appeal or execution. Reliance in this regard could usefully be made to Indian Bank v. Manilal Govindji Khona [2015] 3 SCC 712. Paras 22 of the said judgment read as under: "22. In Sushil Kumar Mehta case [Sushil Kumar Mehta v. Gobind Ram Bohra, [1990] 1 SCC 193] this Court has elaborately considered the relevant factual and legal aspect of the case and has laid down the law at para 10, after referring to....
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....Therefore, in the light of above settled position of law and respectfully following the Hon'ble Supreme Court and Hon'ble High Courts judgments referred supra , we admit the additional grounds of appeal raising validity of jurisdictional notice dated 15.04.2021 u/s 148 of the Act on the anvil of limitation which goes root of the matter. 12. By preferring petition for additional ground of appeal No.3 (3.1 to 3.3), inter alia, the assessee company has challenged in this case, the jurisdiction of the AO to have issued notice dated 15.04.2021 u/s. 148 of the Act as per sec.149(1)(b) of the Act (as amended by Finance Act, 2021), no notice for re-assessment could have been issued to assessee for AY 2015-16 as the time limit for issuing proceedings had expired on 31.03.2019 and the guarantee fee received by the appellant amounting to Rs. 39,08,249/- is less than the threshold limit of Rs. 50,00,000/- (Rupees fifty lakhs). In other words, according to the assessee, in this case, the AO had issued notice to assessee company dated 15.04.2021 u/s. 148 of the Act under the erstwhile Sec.148 of the Act (as it stood prior to its amendment by the Finance Act, 2021). The action of the AO was to b....
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.... for taxation as income for the AY 2015-16 and on verification with the Indian entity it was noted that the Indian entity had booked expenses to the tune of Rs. 19,23,72,397/- towards payment to the assessee company in the FY 2014-15 relevant to the AY 2015-16. Hence created difference of guarantee fee of Rs. 39,08,249/- which was not offered for taxation by the appellant. 15. Before us ld.Counsel contended that the guarantee fee received by the appellant amounting to Rs. 39,08,249/- is less than the threshold limit of Rs. 50,00,000/- (Rupees fifty lakhs) prescribed under section 149(1)(b) of the Income Tax Act, 1961 ('Act' in short) as amended vide Finance Act, 2021 read with CBDT Instruction No.01/2022, therefore, the case cannot be subjected to reassessment proceedings and is barred by limitation. 16. The ld.Counsel further AO initiated reassessment proceedings without taking cognizance of the amended provisions of section 148 to 151 of the Act as it existed on the date of issuance of impugned notice. The ld.Counsel has referred following case law citations to bolster his arguments: 01 Union of India. Vs. Ashish Agarwal (2022) 138 taxmann.com 64 ) (SC) 02 Instruction No.01....
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.... Act is issued. At every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per Section 148- A(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under Section 148-A(b) and an opportunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment''. Substituted Section 149 is the provision governing the time-limit for issuance of notice under Section 148 of the IT Act. The substituted Section 149 of the IT Act has reduced the permissible time-limit for issuance of such a notice to three years and only in exceptional cases ten years. It also provides further additional safeguards which were absent under the earlier regime pre-Finance Act, 2021." 19. The Hon'ble High Court of Allahabad in the case of Ajay Bhandari Vs Union of India [(20....
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.... apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of six years from the end of the relevant assessment year. Explanation.-For the removal of doubts, it is hereby clarified that the provisions of sub-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012. 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession bo....
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....2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It is true that due to a bonafide mistake and in view of subsequent extension of time vide various notifications, the Revenue issued the impugned notices under section 148 after the amendment was enforced w.e.f. 01.04.2021, under the unamended section 148. In our view the same ought not to have been issued under the unamended Act and ought to have been issued under the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021. There appears to be genuine non-application of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some leeway must be shown in that regard which the High Courts could have done so. Therefore, instead of quashing and setting aside the reassessment notices issued under the unamended provision of IT Act, the High Courts ought to have passed an order construing the notices issued under unamended Act/unamended provision of the IT Act as t....
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....pproximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA. 27. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and shall be governed by the present order and shall stand modified to the aforesaid extent. The present order is passed in exercise of powers under Article 142 of the Constitution of India so as to avoid any further appeals by the Revenue on the very issue by challenging similar judgments and orders, with a view not to burden....
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.... has directed Assessing Officers to follow the procedure with respect to such notices. It has also held that all the defences available to assessees under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available. Hon'ble Supreme Court has passed this order in exercise of its power under Article 142 of the Constitution of India. 4. The implementation of the judgment of Hon'ble Supreme Court is required to be done in a uniform manner. Accordingly, in exercise of its power under section 119 of the Act, the Central Board of Direct Taxes (hereinafter referred to as "the Board") directs that the following may be taken into consideration while implementing this judgment. 5.0 Scope of the judgment: 5.1 Taking into account the decision of the Hon'ble Supreme Court in various paragraphs, it is clarified that the judgment applies to all cases where extended reassessment notices have been issued. This is irrespective of the fact whether such notices have been challenged or not. 6.0 Operation of the new section 149 of the Act to identify cases where fresh notice under section 148 of the Act can be ....
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....hority under section 151 of the new law in this case shall be the authority prescribed under clause (ii) of that section. (ii) AY 16-17, AY 17-18: Fresh notice under section 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub-section (1) of new section 149 of the Act, since they are within the period of three years from the end of the relevant assessment year. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (i) of that section. 7.0 Cases where the Assessing Officer is required to provide the information and material relied upon within 30 days: 7.1 Hon'ble Supreme Court has directed that information and material is required to be provided in all cases within 30 days. However, it has also been noticed that notices cannot be issued in a case for AY 2013-14, AY 2014-15 and AY 2015-16, if the income escaping assessment, in that case for that year, amounts to or is likely to amount to less than fifty lakh rupees. Hence, in order to reduce the compliance burden of assessees, it is clarified that information and material may not be provided in a case for AY 2013-14....
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....nth from the end of the month in which the reply is received by him from the assessee. In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires. If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. - If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee. Tanay Sharma DCIT(OSD), ITJ-I Copy to: 1. Chairman, Members and all other officer in CBDT of the rank of Under Secretary and above. 2. All Pr. Chief Commissioner of Income Tax and all Directors General of Income tax with a request to bring to the attention of all officers. 3. ADG(PR. P&P), Mayur Bhawan, New Delhi for printing in the quarterly Tax Bulletin and for circu....
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....of Ganesh Dass Khanna Vs Income Tax Officer [(2024) 460 ITR 546 (Delhi) / (2023) 156 Taxmann.com 417 (Delhi) has considered the entire conspectus of legal arguments contended by the both sides, in similar situation held as under: ''53.1 As would be evident from the extracts set forth above, both from the Finance Minister's speech and the Memorandum, the time limit for reopening under the new regime was reduced from six (06) years to three (03) years and only in respect of "serious tax evasion cases", that too, where evidence of concealment of income of Rs. 50 lakhs or more in a given period was found, the period for reopening the assessment was extended to ten (10) years. In order to ensure that utmost care was taken before invoking the extended period of limitation, the proposal was that approval should be obtained from the Principal Chief Commissioner of Income Tax, at the highest hierarchical level of the department. Likewise, the Memorandum emphasized that the new regime was forged with the hope that it would result in less litigation and would provide ease of doing business to tax payers, as there was a reduction in the time limit by which notice for assessment, reassess....