2026 (7) TMI 1405

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....eir return of income as Nil. The said return was processed and an intimation u/s. 143(1) was issued. The AO based on the Form 26AS, has alleged that the assessee had received interest income but not declared the same in the return of income. Similarly the AO found that the assessee had received a sum of Rs. 38,86,16,927/- from an Indian company but not offered the same for taxation. Therefore the return of the assessee was selected for scrutiny and notice u/s. 143(2) was issued. Subsequently, notices u/s. 142(1) were issued and show cause notice was also issued calling for the details. The AO had also issued notice u/s. 133(6) to the Indian company seeking some details to verify the claim made by the assessee. The assessee filed their submi....

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....s in the final assessment order. 3. As against the said final assessment order, the assessee is in appeal before this Tribunal. 4. At the time of hearing, the Ld.AR submitted that they are pressing ground nos. 3,4 and 5. The Ld.AR submitted that the AO's finding that the Indian company could be treated as Dependent Agent Permanent Establishment is not correct in view of the peculiar facts of the case and also relied on the order of the Coordinate Bench of this Tribunal dated 16/12/2024 in IT(IT)A No. 990/Bang/2023 in respect of the assessee's own case for the A.Y. 2021-22. The Ld.AR also submitted that the Indian entity was subjected to the transfer pricing adjustment by the Ld.TPO and found that the same is at arms length price an....

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....rder and therefore the said order of the AO is against the principles of natural justice. 6. The Ld.DR submitted that the ground nos. 3 and 4 are not sustainable and prayed to remit the interest issue to the AO for verification and thereafter pass an order accordingly. 7. We have heard the arguments of both sides and perused the materials available on record. 8. In respect of ground nos. 3 and 4, the main grievance of the assessee is that the AO could not estimate the business income of the assessee based on the understanding that the Indian company is acting as a Dependent Agent Permanent Establishment and therefore the income was earned by the assessee in India and liable to be taxed under the provisions of the Income Tax Act. It....

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.... of appeal of the assessee is hereby allowed for statistical purposes." 9. In the above said order, the Tribunal had remitted the issue for verification of the TPO order made on the Indian company. We have also noticed that the assessee had filed a miscellaneous application against the said order and prayed that the remitting the matter to the AO is not required when the Tribunal had given a finding that the Indian company does not constitute a DAPE. The Tribunal had also accepted the said plea and thereby modified the order in M.A. No. 06/Bang/2025 dated 22/05/2025. We have also noticed that, thereafter, the AO had also passed an order giving effect to the Tribunal's order on 08/07/2025 in which the AO had granted the relief insofar as ....