TaxTMI 
TaxTMI 
2026 (9) TMI 127
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....e AO to pass a fresh assessment order. The learned CIT observed that, during the assessment proceedings, the assessee had not produced copies of the end-user licence agreement to establish whether copyright had been fully transferred to the Indian purchaser. On that basis, the assessment order was held to have been passed without the necessary enquiries and verification and was therefore considered erroneous and prejudicial to the interests of the Revenue. 2. The Assessee has raised the following grounds of appeal: 1. The Order under section 263 of the Indian Income Tax Act issued by the Learned Commissioner of Income Tax (International Taxation) [CIT (IT)], in so far as it is prejudicial to the interest of the Appellant is not justified under the facts and circumstances of the case and in law and prayed to be quashed. 2. The learned CIT (IT) has erred in issuing the order under section 263, beyond the limitation period under section 263(2). Hence, the order is bad in law, void ab initio and prayed to be quashed. The original assessment order under section 143(3) was passed on 6th June 2022 (FY 2022-23), and therefore the limitation expired on 31 March 2025. Th....
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....amined by the learned Assessing Officer during the assessment proceedings, and the impugned revision seeks to substitute the subjective opinion of the Commissioner for that of the Assessing Officer, which is impermissible in law. 9. The learned CIT (IT) failed to appreciate that if the assessment order u/s 143(3) is in accordance with the law and has been passed after conducting the necessary enquiries and verification, the same cannot be held to be 'erroneous in so far as it is prejudicial to the interests of the revenue' as given under Explanation 2 to section 263 of the Act. 10. The learned CIT(IT) erred in appreciating that the Appellant has duly submitted the details sought vide notice issued by the learned CIT(IT) and thereafter failed to form an opinion as to whether there is an error in the assessment order u/s 143(3) passed by the learned AO. The learned CIT(IT) erred in invoking section 263, Explanation 2, Clause (a) arbitrarily, without any cogent material, due to change of opinion, by way of rowing enquiries of the revenue. The Ld. Commissioner erred in directing to re-examine the issues without even making a clear direction. 11. The l....
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....ue earned by the assessee was taxable as royalty under Article 12 of the Double Taxation Avoidance Agreement and under the Income-tax Act. The assessee placed before the learned Assessing Officer the relevant contractual provisions, agreements with customers, and provisions of the Copyright Act. It was submitted that the issue was squarely covered in favour of the assessee by the decision of the Hon'ble Supreme Court in Engineering Analysis Centre of Excellence. The learned Assessing Officer accepted the assessee's contention and assessed the total income as returned. 5. The learned CIT thereafter revised the assessment order, holding that the learned Assessing Officer had not examined the end-user licence agreement between the assessee and its customers to verify whether the income was taxable as royalty under the Income-tax Act or the Double Taxation Avoidance Agreement. 6. In ground No. 2, the assessee challenges the revisionary order on the ground that it is barred by limitation. It submits that the assessment order was passed on 6 June 2022 and, under section 263(2), the learned CIT could revise that order only up to 31 March 2025. Since the revisionary order was passed ....
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....on period commenced from 31 March 2023 and expired on 31 March 2025. In the present case, the first notice itself was issued only on 3 September 2025, personal hearing was granted on 22 September 2025, and the revisionary order was passed on 9 October 2025. The revisionary order is therefore barred by limitation and is liable to be quashed. 12. The facts show that the assessee is domiciled in the United Kingdom and has no permanent establishment or liaison office in India. The assessee is engaged in supplying open digital technology and services to digital pay television platform operators and content providers. Under agreements with its customers, it supplies integrated hardware systems with embedded software. The assessee filed its return of income on 12 February 2021 declaring Nil income, which the learned Assessing Officer accepted, holding that the assessee was entitled to exemption under section 90(2) by applying the India-United Kingdom Double Taxation Avoidance Agreement. In its written submissions, the assessee explained that its income was not chargeable to tax in India because, under Article 12 of the Double Taxation Avoidance Agreement, the consideration received by ....