9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (10) TMI 1245 - AT - Income TaxValidity of reopening of assessment - non applicability of provisions of Section 44BB - Held that - As relying on assessee s own case for the assessment year 2002-03 the reasons recorded do not indicate that the assessee has failed to disclose fully and truly all material facts necessary for the assessment. Consequently, the notice issued under Section 148 of the Act cannot be sustained and is quashed. The proceedings initiated in pursuance of the notice under Section 148 of the Act are wholly illegal and without jurisdiction and cannot be executed since the final assessment order and the notice of demand under Section 156 of the Act was issued in gross violation of the interim order of this court. The same is a nullity in the eyes of law and cannot be enforced. PE in India - Held that - The Hon ble Delhi High Court for assessment year 2007-08 and 2008-09 2015 (8) TMI 1390 - DELHI HIGH COURT respectively has clearly held that assessee did not have a PE in India. - Decided in favour of assessee.
Issues:
1. Validity of jurisdiction under Section 148 of the Act 2. Assessment based on turnkey projects and gross turnover 3. Existence of Permanent Establishment (PE) in India 4. Applicability of Section 44BB of the Act 5. Levy of interest under Section 234D of the Act Issue 1: Validity of jurisdiction under Section 148 of the Act: The assessee challenged the jurisdiction under Section 148 of the Act, arguing that the notice issued was not valid. The Ld. DRP upheld the reopening of the assessment, stating that material facts were not fully disclosed by the assessee. The Ld. DRP observed that the original assessment did not cover all material facts, justifying the reopening. The Ld. DRP also rejected the contention that the reasons for reopening were recorded mechanically. However, the Tribunal quashed the reassessment proceedings, citing a previous High Court decision that the reasons recorded did not indicate failure to disclose all material facts. Issue 2-4: Assessment based on turnkey projects, gross turnover, and PE in India: The assessee's income assessment was based on turnkey projects, gross turnover, and the existence of a Permanent Establishment (PE) in India. The Ld. DRP upheld the Assessing Officer's findings, leading to the final assessment of total income at a higher amount. However, the assessee argued that the case was similar to previous years where the Hon'ble Delhi High Court had ruled in favor of the assessee, stating no PE existed in India. The Tribunal, considering the High Court's decision, ruled in favor of the assessee, quashing the reassessment proceedings and stating that the addition made based on attributing profit to the PE could not be sustained. Issue 5: Levy of interest under Section 234D of the Act: The issue of levying interest under Section 234D of the Act was raised by the assessee. However, since the Tribunal allowed the appeal and quashed the reassessment proceedings, the decision on the levy of interest became inconsequential. The Tribunal pronounced the decision in favor of the assessee, allowing the appeal on 6th Oct., 2017. In conclusion, the Tribunal's judgment in the case addressed various issues related to jurisdiction under Section 148, assessment based on turnkey projects and PE in India, and the levy of interest under Section 234D. The Tribunal ruled in favor of the assessee, quashing the reassessment proceedings and finding that the addition made based on attributing profit to the PE could not be sustained, aligning with previous High Court decisions in similar cases.
|
