2024 (5) TMI 500 - HC - Income Tax

Assessment completed u/s 144C against a petitioner/Non-Resident Indian - definition of an eligible assessee - HELD THAT - Section 144 C is not a substantive provision. It is machinery provision which has been incorporated for the benefit of the assessees including the eligible assessee. The NRI has been included in the definition of eligible assessee under Section 144C (15) (b) (ii) w.e.f. 01.04.2020 and, therefore, the assessment proceedings in respect of an NRI undertaken after the said date are to be governed under the provisions of Section 144C. The objection of the petitioner that the petitioner ought not to have been proceeded under Section 144 C does not have merit. The assessment proceedings have been finalised u/s 144 C which is a machinery provision and in fact beneficial to the assessee. Therefore, find no substance in the 1st objection raised by the petitioner. Question of limitation - timeline has been given in the statement which would clearly state that the final order of assessment has been passed strictly in accordance with the provisions of Section 144C and the general provision of Section 153 or 153B would not be applicable in the present case . Therefore, the 2nd objection also does not have merit and substance. Further, the petitioner has never raised objection in respect of the petitioner not being covered within the provisions of Section 144C before the assessing authority, which is evident from the assessment order itself. WP dismissed.

Summary

Issues involved:
The issues involved in this case are (1) Jurisdiction of assessment under Section 144 C of the Income Tax Act, 1961 for a Non-Resident Indian (NRI) for the assessment year 2018-19, and (2) Barred by limitation assessment order dated 22.07.2022.

Jurisdiction of assessment under Section 144 C:
The petitioner challenged the assessment order dated 22.07.2022, arguing that as an NRI, the assessment should not have been completed under Section 144 C for the assessment year 2018-19. The petitioner contended that the final assessment order was beyond the limitation prescribed under the statute, as it was dated after the 18-month period from the end of the assessment year. However, the Senior Standing Counsel for the Income Tax Department argued that Section 144 C is a procedural provision introduced from 01.04.2020, including NRIs as "eligible assessees" and providing a machinery for faceless assessment. The legislation's intention was clarified in the Explanatory Memorandum of the Finance Bill, 2020, stating that any variation after 01.04.2020 affecting the assessee's interest would be applicable.

Barred by limitation assessment order:
The Revenue's counsel provided a timeline indicating that the assessment process was duly followed, with notices issued, personal hearings conducted, objections filed, and the final assessment order passed within the prescribed time frame. The Taxation and Other Laws Amendment Act extended the limitation for finalizing the assessment order for the assessment year 2018-19 up to 30th September 2021. The final assessment order was passed within the extended timeline, complying with the provisions of Section 144 C. The court found that Section 144 C is a machinery provision beneficial to assessees, including NRIs, and dismissed the petitioner's objections regarding jurisdiction and limitation, as they lacked merit and substance.

Separate Judgment by Judge:
No separate judgment was delivered by the judge in this case.