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TMI Blog2014 (9) TMI 171X X X X Extracts X X X X X X X X Extracts X X X X ..... aside of the impugned notice dated 07.02.2014 whereby the Assessing Officer has proceeded with the assessment proceedings pursuant to the rejection of the objections. 2. The main and primary plea of the petitioner is that the notice under Section 148 of the said Act was time-barred. The notice was issued in connection with the assessment year 2006-07. The maximum period of six years within which the notice could have been issued expired on 31.03.2013, whereas the notice was issued on 13.06.2013. It is the case of the petitioner that the initial notice dated 13.06.2013 did not have any reference to Section 149(1)(c) of the said Act but subsequently when the objection was taken by the petitioner that the impugned notice was time-barred, the respondent had placed reliance on the provisions of Section 149(1)(c) of the said Act in order to justify the issuance of the impugned notice under Section 148 beyond the period of six years. Before we go on with the discussion on the facts of this case it would be appropriate to set out the relevant provisions:- "147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return; (ba) where the assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E; (c) where an assessment has been made, but- (i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too low a rate; or (iii) such income has been made the subject of excessive relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed; (d) where a person is found to have any asset (including financial interest in any entity) located outside India. Explanation 3.- For the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, notwithstanding that the reasons for such issue have not been included in the reasons recorded under sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... years from the end of the relevant assessment year, further conditions are stipulated, inter alia, under the first proviso to Section 147 of the said Act. One of the conditions being that the assessee had not made a return either under Section 139 or in response to notice under sub-section (1) of Section 142 or Section 148. Another condition is that even if the assessee had made a return he has failed to disclose fully and truly all material facts necessary for his assessment pertaining to that assessment year. But, by virtue of the second proviso to Section 147, these conditions (prescribed in the first proviso) would not apply to a case where any income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment for any assessment year. It is also clear that while the first proviso stipulates that no action can be taken under Section 147 after the expiry of four years from the end of the relevant assessment year unless the conditions stipulated therein are not satisfied, there is no such time limit stipulated in the second proviso. In other words, if a case falls under the second proviso, action can be ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this context, it must be remembered that unless the second proviso to Section 147 applies, all cases beyond four years of the end of the relevant assessment year would have to satisfy the pre-conditions in the first proviso read with Section 149(1)(a) and (b) 6. In this backdrop, let us now return to the facts of the case. When the notice under Section 148 of the said Act was issued to the petitioner, the petitioner at the threshold sent a response dated 10.07.2013 wherein it was clearly stated as under:- "At the outset, it is submitted that the Notice has been issued without jurisdiction and is barred by limitation applicable under Section 149 of the Act. The Notice has been issued on 13.06.2013 for the AY 2006-07 which is beyond the period 6 years prescribed for the purpose of issuing a Notice under Section 148 of the Act. We are an Indian Company and have no foreign assets or income and the Notice is therefore, clearly beyond limitation and liable to be withdrawn. Further, in any event and without prejudice to the aforementioned, it is also pointed out that during the FY 2005-06, we did not undertake any activity and as such, did not have any income, for the purpose of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ltd. and Shri Sumesh sawhney Director of M/s. Deccan Digital Networks Pvt. Ltd., 13, Abul Fazal Road, Bengali Market, New Delhi-1, by the Special Director of Enforcement was received through Dy. Director of Income Tax (Investigation), Unit-1(2); New Delhi in the above mentioined case pertaining to this Ward for taking appropriate action, as per the report the facts mentioned in the show cause notice / complaint are as under: Copy of form FCGPR filed by M/s. Deccan Digital Networks Pvt. Ltd. (DDNPL) to RBI interaLia reveals that: i. M/s. Deccan Digital Networks Pvt. Ltd. is a recently formed company and activities are to hold investments. There was no description of NIC code. ii. On 21.03.2006, a sum of Rs. 11,828/- crore was received by Deccan from. M/ s. Global Comminication Services Holdings Ltd. (GCSHL), Mauritius and on the same day i.e., 21.03.2006, 11828440 equity shares were allotted to GCSHL Mauritius. iii. There was delay in reporting to RBI about receipt of FIX/ in submissions of form FCGPR within 30 days from the date of receipt of funds/date, of issue of shares to the foreign investor (GCSHL, Mauritius) (11828440 shares were issued on 21.03.2006 for Rs. 11,82,84,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad been accounted in the return of imameralediozAY.2017-2008 if any. 17. Please furnish proof of tilling of income tax return for A.Y. 2007-2008, 2008-2009, 2009-2010 with audit report of M/s. Deccan Digital. Networks Pvt, Ltd. 18. Please furnish proof of income tax return of directors for A.Y. 2006-2007, 2007-2008, and 2009-2010. 19. Please furnish name and address of directors with details of change if any, during the period relevant to A.Y. 2006-2007 and later on. 20. Please furnish computation of income for 2006-2007. Your reply should reach this office within seven days of the receipt of the receipt of this letter, statutory notice u/s 142(1) are enclosed herewith fixing the date of hearing on 28.10.2013. Yours faithfully (Bason Sanyal) Income Tax Officer Ward 10(1), New Delhi" 8. Thereafter, the petitioner submitted its objections dated 27.11.2013. In the said objections the petitioner reiterated its stand that the notice under Section 148 was barred by limitation. The stand taken by the petitioner was as under:- "a) The Notice under section 148 is barred by Limitation: The Notice is clearly time barred and is beyond the period of limitation prescribed under the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It has been informed that notice was issued u/s 149(1)(c) of the Act. As per provisions of Sec 149(1)(c) notice could be issued for 16 years. For your convenience and a ready reference relevant part of Sec 149(1)(c) is reproduced herewith. "149(1)(c)- No notice u/s 148 shall be issued for the relevant assessment year, if four years, but not more then 16 years have elapsed from the end of the relevant assessment years unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment." On the basis of above the objection raised may please be treated as settled." (underlining added) 11. Since there is a reference to the Assessing Officer"s earlier letter of 16.09.2013 in the above-mentioned extract, it would be pertinent to see as to what has been said in that letter by the Assessing Officer with regard to the plea of bar of limitation raised by the petitioner. In the letter dated 16.09.2013 this is exactly what the Assessing Officer had stated:- "Your query that the notice u/s 148 has been issued after lapse of statutory time I would like to draw your kind attention to Sec-149(1)(c) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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