TaxTMI 
TaxTMI 
2024 (8) TMI 1618
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....equently erred in passing the draft assessment order u/s 144C(1) and the final re-assessment order read with section 147 of the Act without assigning proper reasons and justification. 3. The ITO, International Taxation Ward, Tuticorin / Dispute Resolution Panel - 2 failed to appreciate that the draft assessment order u/s 144C(1) and the final re-assessment order under section 147 of the Act was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 4. The ITO, International Taxation Ward, Tuticorin / Dispute Resolution Panel - 2 failed to appreciate that the procedure prescribed under the new regime of re-assessment in terms of Section 148A of the Act having not admittedly followed, the consequential issuance of notice u/s 148 of the Act and issuance of draft assessment order u/s 144C(1) of the Act and the final re-assessment order should be reckoned as bad in law. 5. The ITO, International Taxation Ward, Tuticorin / Dispute Resolution Panel- 2 erred in adding back a sum of Rs.3,30,749/- being the credits in the Account No. 11017854454 as income of the appellant while computing the taxable total income witho....
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....ft assessment order, the consequential directions issued by them should accordingly be reckoned as bad in law. 13. The ITO, International Taxation Ward, Tuticorin / Dispute Resolution Panel- 2 failed to appreciate that the rejection of the computation adopted by the Appellant in his return of income as well as the computation of Assessing Officer in the draft assessment order was wholly unjustified and unwarranted and further ought to have appreciated that the recomputation of long term capital gains on various facets was wrong, incorrect, invalid, not sustainable both on facts and in law. 14. The ITO, International Taxation Ward, Tuticorin / Dispute Resolution Panel- 2 failed to appreciate that the entire re-computation of taxable total income in the impugned order on various facets was wrong, incorrect, erroneous, invalid, unjustified and not sustainable both on facts and in law. 15. The ITO, International Taxation Ward, Tuticorin / Dispute Resolution Panel - 2 failed to appreciate that there was no proper / effective opportunity granted before passing the impugned draft order as well passing of the final re-assessment order and ought to have appreciate....
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....the Assessing Officer. Thereafter, the Assessing Officer has passed final assessment order u/s.147 r.w.s. 144C(13) of the Act on 19.01.2024 and determined the total income at Rs.1,43,66,879/- as detailed below: Total Income returned 52,740 Add: 1. Income from other sources 3,30,749 2. Addition under the head Business 2,08,713 3. Long-Term capital Gain on sale of third property 3,10,742 4. Short Term Capital Gain on sale of property I & II 1,34,63,935 1,43,14,139 Total Assessed Income 1,43,66,879 Aggrieved by the final assessment order, the assessee is in appeal before us. 5. The learned AR for the assessee submitted that legal grounds are purely issues concerning the limitation prescribed u/s.153(2) of the Act. The learned AR for the assessee referring to the legal ground of appeal filed by the assessee submitted that in the present case, notice u/s.148 of the Act was issued on 31.03.2022. As per the provisions of section 153(2) of the Act, the assessment order should be passed on or before one year from the end of the relevant A.Y. i.e....
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.... Department submits that provisions of section 153 determines the time limit for passing the draft order only. 4.2) The Department submits that in the below mentioned cases, it has been held that draft order must be passed within the time limit of section 153. a) Tally India Pvt. Ltd. 435 ITR 137 (Kar.) b) Lionbridge Technologies 260 Taxman 273 (Bom.) 4.3) The Department respectfully submits that it is a fact that the assessee preferred an appeal before the Ld. DRP against the additions made by the Assessing Officer. 4.4) The Department prays to draw attention of the Hon'ble Bench to the provisions contained in section 144C(13) of the Income Tax Act. The usage of the phrase 'notwithstanding anything contrary contained in section 153 or section 153B' conveys that the general time limits provided u/s. 153 are not applicable for those assessees who have opted to proceed with the DRP route. 4.5) The Department submits that provisions of the income tax act 1961 sets out a special scheme for the assessment of non-resident in terms of section 144C (1) to section 144C (14) of the income tax act. According to the provisions o....
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....of the draft assessment order. 4.7) The Department humbly submits that Assessing Officer also cannot initiate any further penalties which are attached to the assessment order if same are not initiated in the draft order. The rights of the variation to the income of the assessee are solely rest with the dispute resolution panel. Therefore the dispute resolution panel has a correcting power to the draft assessment order. AO does not have any power to do so. Therefore it is apparent that on the plain reading of the above provisions for all practical purposes the role of the assessing officer comes to an end the moment he passes the draft order. He is only authorized to pass the final assessment order which is according to the directions of the learned dispute resolution panel. The above provisions also contained the separate time limits and it has its own timelines which binds the revenue as well as the assessee. The honourable Madras High Court in 398 ITR 645 (2017) CIT vs. Sanmina SCI India private limited in para number 7 has held that provisions of section 144C is a self-contained code in itself. Thus, the provisions contained therein only determine the timelines of the p....
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....t is not subject to the time limit u/s. 153 and 153B as mentioned in the provisions above. 4.11) The Department submits that in this case, the Ld. DRP had passed order u/s.144C(5) on 27/12/2023, and hence the Assessing Officer had time to pass the final order by 31/01/2024. Accordingly, the Assessing Officer had passed final order on 19/01/2024, which is well within the time limit u/s. 144C(13). Hence, the contention of the assessee is without any basis and is against the clear provisions of the Income tax Act, 1961. The Hon'ble Bench is requested to dismiss the same. 4.12) Without prejudice to the above, the Department would like to submit that if the time limit u/s. 153 is considered, the very purpose of including non-resident Indian u/s.144C(15)(b)(ii) as "eligible assessee" would get defeated because the time limit for the Assessing Officer to draft the order gets restricted and it will be less than the time limit available in other cases. If time limit u/s. 153 is considered in the instant case then time available to assessee for making submissions and also for Assessing Officer for passing draft assessment order will be only one month as under: ....
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....effect from 1st April, 2020. Thus, if the AO proposed to make any variation after this date, in case of eligible assessee, which is prejudicial to the interest of the assessee, the above provision shall be applicable. It can be inferred from the above amendment that the legislative intent is to provide expeditious resolution of the dispute between the non-resident taxpayer and the Department. If time limit u/s.153 is considered, it will be against the interest of non-resident assessees in general, as it will severely restrict the opportunities that could be available to make submissions before the Assessing Officer, as the total time limit for passing draft order will be substantially reduced unlike the assessee who gets further time for assessment order. Thus any such interpretation will go against the legislative intent of providing expeditious resolution of the dispute between the non- resident taxpayer and the Department. Without prejudice to the above, it is humbly submitted that section 144C(1) deals with passing of draft assessment order in respect of eligible assessee as per 144C(15)(b)(ii). The Final order has to be passed as per the provisions of section....
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.... acceptance is received. In case an 'eligible assessee' files objection before the DRP, then the DRP shall issue its direction within 9 months from the end of the month in which the draft order is forwarded to the assessee. Thereafter, the Assessing Officer shall pass his final assessment order within one month from the end of the month in which such direction is received. 8. In the present case, there is no dispute with regard to the fact that the appellant has filed his objection against the draft assessment order passed by the Assessing Officer before the DRP. Therefore, in ordinary course, the extended time limit for completion of the assessment should be available to the Assessing Officer as per section 144C r.w.s.153C of the I.T. Act, 1961. But, the argument of the learned Counsel for the assessee is that as per section 153(4) of the Act, the extended period of 12 months for completion of assessment is available only where a reference under sub section (1) of section 92CA is made during the course of the assessment or re-assessment, but not in a case where there is no reference to the TPO. We find force in the argument of the learned Counsel for the assessee for th....
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....gible assessee shall within 30 days file its acceptance of the variations to the Assessing Officer or file his objection, if any, to such variation with the DRP. If the eligible assessee file his acceptance to the Assessing Officer, then the Assessing Officer shall complete the assessment within one month from the end of the month in which the acceptance is received. In case an eligible assessee files objection before the DRP, then the DRP shall issue its direction within 9 months from the end of the month in which the draft order is forwarded to the assessee. Thereafter, the Assessing Officer shall pass his final assessment order within one month from the end of the month in which such direction is received. 9. In the present case, there is no dispute with regard to the fact that the appellant has filed his objection against the draft assessment order passed by the Assessing Officer before the DRP. Therefore, in ordinary course, the extended time limit for completion of the assessment should be available to the Assessing Officer as per section 144C r.w.s. 153C of the I.T. Act, 1961. But, the argument of the learned Counsel for the assessee is that as per section 153(4) of....
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....,75,000/-on 5.10.2016 to the vendors by way of cash, that the vendors have admitted and acknowledged the same and the assessee could not explain the source of such payment made for purchase of the immovable property. While doing so, he further held that the sale deed in itself is conclusive evidence and the contents of the same could not be proved further and a civil suit filed by the 3rd party claiming the title to the said property after the registration of sale deed between the assessee and the vendors will not negate the contents of the sale deed. 23.1 It is the submission of the learned Counsel for the that the assessment order passed by the Assessing Officer is barred by limitation. It is also his submission that the assessee being an NRI and settled in UAE does not have any economic activities in India, therefore, there cannot be any addition of unexplained investment in the hands of the assessee as these falls under article 22 of Indo-UAE DTAA which makes such income taxable in the country of residence i.e. UAE unless these investments are proved to be made out of income generated in India. 24. We find some merit in the above argument of the learned Counse....