TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1290
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....d the rival submissions and perused the materials available on record. The Assessee is a tax resident of Singapore. The Assessee has not filed its return of income in India for the assessment year 2014-15. Specific information was received that the Assessee company had received consideration amounting to Rs. 3,90,32,787/- from M/s. Vodafone Digilink Ltd and had not offered the same for taxation in India. Further, it was noticed that Assessee had also not offered Rs. 37,41,17,707/- as per Form 26AS for taxation in India. The learned AO accordingly concluded that the nature and taxability of amount received from M/s Vodafone Digilink and other parties remained unexplained and proceeded to entertain a belief that income of the Assessee had escaped assessment after passing an order under section 148A(d) of the Act on 27-7-2022 which is as under:- "Sir/Madam/ M/s, Subject: Proceedings u/s 148A(d) in consequence to Hon'ble SC Order dated 04.05.2022 - Order Order under clause (d) of section 148A of the Income Tax Act, 1961 In this case, specific information was received that the assessee company, M/s Huawei International Pte. Limited (hereinafter re....
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....03.2020 (i.e. which were earlier getting time barred on 31.03.2020) were extended to 31.03.2021, which was further extended to 30.06.2021. Hence, the case of the assessee was rightly reopened under section 148 of the Act as AY 2014-15 was falling within the six years as on 31.03.2020 from the end of relevant assessment year. Further, as far as date of issuance of notice u/s 148 of the Act dated 15.04.2021 is concerned, the Supreme Court vide its judgment dated 04.05.2022 (2022 SCC online SC 543) in the case of UOI Vs Ashish Aggarwal has reinstated the proceedings in which notices under section 148 of the Act were issued after 31.03.2021. Thereafter, following the directions as per CBDT's instructions No. 01/2022, the notice dated 27.05.2022 was issued to the assessee for necessary compliance. The relevant extract of CBDT's instructions No. 01/2022 is reproduced hereunder:- 1. AY 2013-14, 2014-15 and AY 2015-16: fresh notice under section 148 of the Act can be issued in these cases, with the approval of the Specified authority, only if the case falls under clause (b) of sub-section (1) of section 149 as amended by the Finance act, 2021 and reproduc....
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....se of the assessee had received consideration/remittance amounting to Rs. 3,90,32,787/- from M/s Vodafone Digilink Limited during the year under consideration and did not offer the same for taxation as the assessee failed to file its return of income Further, the tax authorities have stated it as one of the points for consideration. The said information is not the sole point of contention basis which the assessee can rely upon. The merits of the case are yet to be evaluated, which will be done separately in proceedings u/s 147 of the Act. The assessee will get ample opportunities to explain the case u/s 147 of the Act (during reassessment proceedings). Reliance is again placed on case of Raymond Mills (SC), where it was held that the AO just needs a prima facie satisfaction to reopen the case and other aspects of the case will be verified during the reassessment proceedings u/s 147 of the Act. Further, as mentioned above, the assessee did not file its ITR for the relevant assessment year, the revenue authorities were never given an opportunity to evaluate the claim of the assessee, on merits. The eligibility of claim of any exemption w.r.t. to any income received ....
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....o been fulfilled. Further, the CBDT in its instruction no. 01/2022 in para 8.1 stated that "the extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgement of Hon'ble Supreme Court. Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with." Hence, the objection raised by the assessee stands disposed off. B. Without prejudice to above, no escapement of income as per merits and facts of the case The Assessee is a company incorporated in Singapore and is engaged in the business of providing information and communications technology (ICT) infrastructure solutions. In this regard, it is submitted that during the subject AY, the Assessee has made telecom equipment supplies to various customers (including customers in India) on offshore basis. The sales were made from outside India and payments were also received outside India. Accordingly, in the absence of Permanent Establishment / business connection in India, no income accrued or arose in India which can be subjected to tax in India under the provisions of th....
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....tion without considering all the aspect of the case. The assessee has relied upon certain rulings, which are case specific and respectfully not followed here. Hence, this argument also fails. Further, it is again reiterated that the assessee did not file its ITR for the relevant assessment year, therefore, the revenue authorities were never given an opportunity to evaluate the claim of the assessee, on merits. Now, the assessee has submitted that the said receipts are on offshore basis, hence not taxable in India and also relied upon Hon'ble SC ruling in the case of Engineering Analysis Centre of Excellence Private Limited. Further, the assessee has claimed that it has not permannet establishment/busineess connection in India. The above contentions of the assessee were considered but not found acceptable as the claims of the assessee are not supported by any documentary evidence. The claims of offshore services, non existence of PE can be verified only after the detailed investigation which is not possible at this juncture as the assessee failed to provide copy of agreements, copy of purchase orders and copy of invoices to support its claim. The Revenue Depart....
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....ng made on this count deserve to fail. 4.2. From the perusal of the aforesaid order under section 148A(d) of the Act in page 7 last paragraph thereon where emphasis had been supplied by the Learned AO himself, it is very clear that the Learned AO through the garb of reopening was only trying to make detailed investigation on the claim of offshore services of the assessee and non-existence of Permanent Establishment (PE) in India of the assessee. This by any stretch of imagination cannot be construed as formation of belief warranting reopening of assessment. The Learned AO is only stating that he would like to make detailed investigation on the claims made by the assessee with regard to taxability of the receipts in India. This cannot be treated as a formation of belief. He is only trying to make fishing and roving enquiries through the reopening, which is not permissible in law. The Learned AO issued show-cause notice to the assessee under section 148A(b) of the Act after the issuance of initial notice under section 148 of the Act dated 15-04-2021. The material available with the Learned AO was indeed furnished to the assessee. The assessee had filed its objections in that regar....
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....eply to Show-Cause Notice under Section 148A(b) of the Act had clearly brought on record that it is a tax resident of Singapore engaged in the business of providing information and communications technology (ICT) infrastructure solutions ; that it had supplied telecom equipments to various customers including customers in India on offshore basis ; that the sales were made from outside India and payments were also received outside India ; that it has no permanent establishment (PE) or business connection in India and that no income accrued or arose to it in India either under the provisions of the Act or under the beneficial provisions of India Singapore Double Taxation Avoidance Agreement. It was specifically pointed out that software transferred by the assessee is in the nature of transfer of 'copyright article' and not transfer of 'a copyrighted right'. It was submitted that the payments made for acquiring the right to use the copyrighted product itself, without allowing any 'right to use the copyright' in the copyrighted product, are not covered within the scope of 'royalty' under the provisions of the Act and India Singapore Treaty. The assessee also placed reliance on the deci....
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....etition before the Hon'ble Delhi High Court. The said writ petition was disposed of by the Hon'ble Delhi High Court in WP (C ) 17561 / 2022 and CM APPL. 56083-84/2022 dated 22-12-2022, wherein it was held as under:- "9.1 Besides this, the charge levelled against the petitioner is, that it has received foreign remittances against the sale of software, and sale of communication equipment hardware and software. The amount received, which according to the respondents/revenue, has escaped assessment, is Rs. 41,31,50,494/-. 10. It is also not disputed, that the remitter i.e., Vodafone Digilink Ltd., has deducted tax at source qua the remittance made. 11. What is also not in dispute, is that the petitioner is located in Singapore. It is also an admitted position that the petitioner has not filed its returns. 12. According to Ms Jha, the impugned order does not advert to the nature of the remittance. 13. We may note, that Mr Hossain cannot but accept, that the notice issued under Section 148A(b) of the Act does not expound, as to what is the nature of the remittance. 14. However, Mr Hossain contends, that the fact that there is a refere....