TaxTMI 
TaxTMI 
2025 (9) TMI 1582
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....essment Year [A.Y.] 2022-23. 2. The assessee has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the learned Assessing Officer ('AO') erred in finalising the assessment without appreciating the fact that the directions given by the Hon'ble Dispute Resolution Panel ('DRP') are irrelevant to the issues of the Appellant and are ultra vires the scope of the reference made by the Appellant. 2. On the facts and circumstances of the case and in law the learned AO/DRP decided the issue which was neither raised by the Appellant nor applicable in the case of the Appellant. The assessment order passed based on such directions of the DRP is bad in law and liable to be qu....
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....ion or otherwise the above Grounds of Appeal before or during the hearing of the Appeal." 3. Brief facts of the case are that the assessee is a non-resident company registered in the British Virgin Island (BVI). It is a tax resident of BVI for the year under consideration. The assessee filed its return on 31.12.2022 declaring income of Rs. 89,64,307/- u/s. 44BB of the Act. The case was selected for scrutiny and, vide draft assessment order, the Ld. AO proposed to tax the receipts of Rs. 8,96,43,062/- as income from Royalty. Ld. AO observed that the receipts from providing the right to use the commercial equipment to Afcons is covered under clause (iv a) of Explanation 2 to section 9(1)(vi) r.w. sub clause (vi) of the same section and the....
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....ter by deletion, substitution or otherwise the above Grounds of Appeal before or during the hearing of the Appeal." 5. After hearing the assessee, Ld. DRP issued the following direction to the Ld. AO: "5.4 Discussion & Direction of DRP: 5.4.1 The issues as raised by the appellant are summarised and discussed below Assessee contended that the income is not accrued or justifiably sourced in India an laid down in Section 9 of the Income Tax Act, 1961 or escaping under the effective provisions of the DTAA. Section 9(1) of the Income Tax Act provides that income will be deemed to accrue or arise in India if it is received from any source or business connection or property in India. The AO has established a ....
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....inciples of natural justice. In the assessment proceedings, the AO issued numerous notices and called for the replies. Simply put, the assessee's argument is unsustainable unless the assessee can show concrete instances of procedural lapses resulting in prejudice. It is contended by the assessee that the AD has contravened the procedural law as enshrined under sections 147, 148 and 144C of the respective Income Tax Act which invalidates reassessment proceedings The AO reopened the assessment on the basis of tangible and specific material which alleged that income had escaped assessment. This is sufficient to satisfy the "reason to believe" test laid down. The notice under Section 148 was issued after obtaining....
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....s of reassessment was tangible and was in compliance with the requirements of the procedural prerequisites as per the provisions of Sections 147 and 148." 6. Accordingly, Ld. AO passed the assessment order u/s. 143(3) r.w.s. 144C (13) dated 09.01.2025 determining the total income of Rs. 8,96,43,062/- from royalty taxable @ 10%. Aggrieved with the order of AO/DRP, the assessee has preferred an appeal before the Tribunal. 7. Before us, Ld. AR has argued that the AO/DRP have decided the issue which was not raised by the assessee and the directions issued by DRP show clear non-application of mind. Specifically, with regard to Ground No. 1,2 & 3 raising legal issues, Ld. AR has argued that the AO/ DRP have not addressed the issues raised b....