TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 346
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....the adjustment proposed by the Commissioner in the order dated 26.03.2025 was legally unsustainable and erroneous. Hence, the order dated 26.03.2025 passed by the Commissioner may be set aside. 3) The Commissioner erred in observing that the Assessing Officer failed to conduct proper enquiry without appreciating that the Assessing Officer had duly conducted the requisite enquiries before passing the assessment order dated 26.03.2025." Brief facts of the case are as under: 2. The assessee is a company incorporated in Mauritius and is registered as foreign portfolio investment in India by SEBI. It is engaged in investment activities in India through FPI. It is submitted that the assessee invested in the Indian capital markets and the any debt securities and earns income by way of interest and capital gains. During the year under consideration the assessee filed its return of income on 04/02/2021 declaring total income at Rs. 100,36,28,180/- The case was selected for scrutiny and notice u/s. 142(1) of the Act was issued along with questioner from time to time. In response to the said notice, the assessee furnished details as called for which is placed on record. The Ld.....
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....ssing officer failed to make inquiries and verifications that should have been made. The assessment order was passed in a summary manner. The A.O. failed to utilise the guidelines laid down in CBDT circulars on this subject before deciding on DTAA benefits. Thus, A.O. has failed to apply his mind on the facts before him. The assessee's submissions on this issue lacked clarity or legal arguments. In absence of any specific reply, the A.O's order becomes erroneous. This is a case to which Explanation 2 sub-clause (a) to section 263(1) is applicable. Consequently, the assessment order dated 20.09.2022 is deemed to be erroneous in so far as it is prejudicial to the interests of the revenue in my opinion for the reasons discussed above. 6.1. The undersigned would like to rely upon a few landmark judgments by the Honourable Supreme Court and the jurisdictional Bombay High Court on section 263. The Courts have deliberated on the issue and held that once the order is found to have been passed without conducting a necessary enquiry the CIT is correct in -invoking the powers under section 263. 6.2 In the case of Malabar Industrial Co. Ltd. v. Commissioner of Income-....
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....nity of being heard to the Assessee. The ITAT too upheld the order u/s 263 considering the fact that the assessee can take up objections, if any, before the AO. Thus, several notices u/s 263 on the grounds of facts that the AO did not enquire during assessment were raised by the CIT and covered under his order u/s 263. This order was upheld by the ITAT and also by the Bombay High Court. 6.4. In another case, KEC International Ltd vs DCIT reported in [2025] 171 taxmann.com 541 (Bombay), the Bombay High Court has upheld the order by the CIT u/s 263. In this case, the AO had accepted the assessee's Book profit computation under section 115J without examining the issue of decapitalization of interest. The notice and order u/s 263 on this issue by the Commissioner was upheld by the learned Bombay High Court. The learned High Court noted that during the course of the original assessment proceedings, deduction under section 32AB was also not examined by the AO. It also held that merely because the Assessing Officer reproduces the computation of income under section 115J made by the assessee, it cannot be said that the AO has examined the issue of computation of book profit un....
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....red identical issue on merits. "i. Indium IV (Mauritius) Holdings Ltd. Vs. Deputy Commissioner of Income-tax (International Taxation), ITAT MUMBAI - [2023] 155 taxmann.com 336 ii. IBM World Trade Corpn. vs. Deputy Director of Income-tax, International Taxation, Circle 1(1), ITAT Bangalore -[2012] 20 taxmann.com 728 iii. Director of Income Tax, (International Taxation) vs. IBM World Trade Corporation, High Court of Karnataka - [2020] 120 taxmann.com 151 iv. Matrix Partners India Investment Holdings, LLC vs. Deputy Commissioner of Income-tax, ITAT Mumbai - [2025] 173 taxmann.com 727" 3.2 The Ld.AR thus emphasised that, the Ld.AO accepted the return of income filed by the assessee, after through verification of the claim relating to long term capital loss/gain earned by the assessee during the year and thus the explanation offered by the assessee was accepted. He thus submitted that, the notice issued u/s. 263 of the holding assessment order to be erroneous and prejudice to the interest of the revenue is not correct in the present facts and circumstances. 3.3 On the contrary, the Ld.DR relied on the orders passed by the authorities below. W....
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....judice to the income-tax administration as a whole. Section 263 is to be invoked not as a jurisdictional corrective or as a review of a subordinate's order in exercise of the supervisory power, but it is to be invoked and employed only for setting right distortions and prejudices to the revenue, which is a unique conception, which is to be understood in the context of and in the interests of the revenue administration. We therefore of the opinion that the notice issued u/s. 263 dated 17/03/2025 is void-ab-initio. As a consequence of which the order passed u/s. 263 dated 26/03/2025 has to be declared to be bad in law. Accordingly, the grounds raised by the assessee stands allowed. In the result, the appeal filed by the assessee stands allowed. Order pronounced in the open court on 18/08/2025 ============= Document 1 GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT CIT (IT), MUMBAI-4 To. STEADVIEW CAPITAL MAURITIUS LIMITED UNIT 3, 4C 4TH FLOOR 19 BANK STREET . CYBERCITY EBENE 72201 EBENE , FOREIGN Mauritius DIN & Notice No : ITBA/REV/F/REV1/2024- 25/1074554389(1) PAN/TAN: AY: Dated: AAQCS1253G 2020-21 17/03/2025 ....
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.... of Section 263 of the Income Tax Act, 1961 are clearly attracted to the facts of this case. 5 Accordingly, you are hereby requested to show cause as to why the Assessment Order dated 20.09 .2022 in your case be not cancelled /revised within the meaning of 263 of the I. T. Act, 1961. You may file your reply to this show cause on or before 24.03.2025 either through tapal or through e-mail. Personal hearing will be granted on the same day i.e. 24.03.2025 (12:45 PM) where the matter can be represented either personally or through any person duly authorized in this regard. SANJAY VISHWASRAO DESHMUKH CIT (IT), MUMBAI-4 (In case the document is digitally signed please refer Digital Signature at the bottom of the page) Document 3 Sudit K. Parekh & Co. LLP Chartered Accountants 20 December, 2021 Te Deputy Commissioner of Income Tax (DCIT), Int Tax Circle 4(2)(2), Mumbai. Dear Sir / Madam, Re: STEADVIEW CAPITAL MAURITIUS LIMITED(now referred as 'Assessee' or 'the Company') Assessment Year (AY): 2020-21 PAN: AAQCS1253G Notice no .: ITBA/AST/F/142(1)/2021-22/1037144542(1) Sub: Reply to notice u/s 142(1) of the Income-tax Act, 1961 ('the Act'). Our client is in r....
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....10. Details of various bank accounts maintained during the previous year and as on date indicating names and addresses of the Bank, Account No., type of Account and names of the persons authorized to operate the accounts. If there is any change as on today, details thereof should also be furnished. The assessee has an INR bank account with Kotak Mahindra Bank, Account Number: 6611488541. Bank Statement for AY 2020-21 is enclosed herewith (marked as Exhibit -7). 11. With reference to the additions/disallowances made in the earlier assessments, furnish the details of similar claims liable for disallowance for similar grounds. Relevant details of outcome or stage of appeal may also be submitted. Kindly note that there was no scrutiny assessments in earlier years except for AY 2015-2016 in which the Return of Income (ROI) submitted was accepted in the assessment order and there was no demand raised. 12. Please submit copy of audited Balance- Sheet, Profit & Loss A/c., as applicable with the annexure and 3CEB. Not Applicable. 13. Computation of Total Income/ Loss for the year under consideration. Document 5 Sudit K. Parekh & Co. LLP Chartered Accountants Computa....
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....ward foreign remittances received during the year in the following format : Please refer Bank Statement for AY 2020-21 is enclosed herewith (marked as Exhibit -7). 26. Whether the above remittances received by you have been offered for taxation? If no give reasons. Yes, All the outward remittances made from the account are after considering necessary tax discharged to be if any. 27. Furnish sample documentary proof w.r.t. above remittance e.g. extract of bank statement highlighting the receipt or any other documentary evidence. Not Applicable. 28. Furnish details of scrutiny assessments done in your case in the past 3 AYs in the following format : S NO AY Returned income Assessed income Brief description of additionsmadeer with quantum Wheth in appeal Status of ppeal 1. AY 2019-20 Scrutiny for the said Assessment Year is not Initiated 2. AY 2018-19 Scrutiny for the said Assessment Year is not Initiated 3. AY 2017-18 Scrutiny for the said Assessment Year is not Initiated Brief description of additionsmadeer with quantum Wheth in appeal Document 7 Sudit K. Parekh & Co. LLP Chartered Accountants 29. Reconciliation of the party....
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....of the details submitted above, our client will be pleased to submit the same upon hearing from you. Thanking you, Yours faithfully, For SUDIT K PAREKH & Co. LLP Chartered Accountants Anita Pravin Basrur Authorized Signatory Encis: As above Document 9 Acknowledgement Number : 305849631211221 e-Proceedings Response Acknowledgement INCOME TAX DEPARTMENT PROCEEDING DETAILS PAN/TAN AAQCS1253G Name STEADVIEW CAPITAL MAURITIUS LIMITED Financial Year 2019-20 Assessment Year 2020-21 Proceeding Name Assessment Proceeding u/s 143(3) Notice/Communication Reference ID 100040428134 Notice Section 142(1) Description [ITBA]Notice u/s 142(1)of Income Tax Act 1961. Notice Issue Date 23-Nov-2021 Due Date for Submission 08-Dec-2021 Communication Sent date Document Reference ID ITBA/AST/F/142(1)/2021-22/1037144542(1) RESPONSE SUBMITTED Remarks Refer Attached Hash * Value Of Remarks 700087d5a568b32be17393b6f879a4ce51876f04bea58654aed9d d413f98f90e SI No Attachment Name Description Size(bytes) Hash * value of Attachment 1 Exhibit-2.pdf Exhibit 2 - Letter of Authority 965260 69dbc83220e0781f9 5b5ffdaaf842eea21 603affd5923acd93....
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....thority Exhibit-2.pdf @ (943 KB) SCML _AY 2020-21_Reply notice us 142(1) SCML _AY 2020-21_Reply notice us 142(1).pdf @ (295 KB) Exhibit 1 - Notice undersection 142(1) Exhibit-1.pdf - (205 KB) Exhibit 7 - Bank Account Statement for A.Y.2020-21 Exhibit-7.pdf @ (115 KB) Exhibit 3 - ITR Form 6 A.Y. 2020-21 Exhibit-3.pdf @ (778 KB) Exhibit 4 - Tax Residency Certificate (TRC) Exhibit-4.pdf @ (443 KB) Exhibit 5 - SEBI Registration Certificate Exhibit-5.pdf : (318 KB) Exhibit 6 - Letter of Incorporation Exhibit-6.pdf = (72 KB) Exhibit 8 - Computation of Income for A.Y.2020-21 Exhibit-8.pdf A (153 KB) Acknowledgement Document 12 Sudit K. Parekh & Co. LLP Chartered Accountants 21 March 2022 To Assistant Commissioner of Income Tax, Int Tax Circle 4(2)(2), Mumbai. Dear Sir / Madam, Re: STEADVIEW CAPITAL MAURITIUS LIMITED (now referred as 'Assessee' or 'the Company') Assessment Year (AY): 2020-21 PAN: AAQCS1253G Notice no .: ITBA/AST/F/143(3)(SCN)/2021-22/1040802926(1) Sub: Reply to notice u/s 143(3) of the income-tax Act, 1961 ('the Act') . Our client is in receipt of a notice u/s 143(3) of the Act dated 15 March 2022 enclosed her....
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....6,00,07,726 4,76,27,54,170 Less : Grandfathering as per the Treaty included above (Exhibit 2) 2,06,68,40,563 Net Taxable Long Term Capital Gain/ (Loss) (7,31,02,42,336) We request you to kindly take this letter and submissions along with on record and oblige. In case you do not view this submission favourably, we request you to grant us an opportunity of personal hearing without passing an order which will be detrimental to the interest of the assessee. Thanking you, Yours faithfully, For SUDIT K PAREKH & Co. LLP Chartered Accountants Marius Authorized Signatory Encls: As above Document 14 Acknowledgement Number : 398180061210322 Acknowledgement e-Proceedings Acknowledgement Response INCOME TAX DEPARTMENT PROCEEDING DETAILS PAN/TAN AAQCS1253G Name STEADVIEW CAPITAL MAURITIUS LIMITED Financial Year 2019-20 Assessment Year 2020-21 Proceeding Name Assessment Proceeding u/s 143(3) Notice/Communication Reference ID 100045871343 Notice Section 143(3) Description [ITBA]Show Cause Notice for Proceedings u/s 143(3)of Income Tax Act 1961. Notice Issue Date 15-Mar-2022 Due Date for Submission 21-Mar-2022 Communication ....