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TMI Blog2015 (7) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... s of material, which he had before him, income had escaped assessment. The Assessing Officer had not even recorded his satisfaction about the correctness or otherwise of the finding given by the Hon’ble Tribunal. What is recorded by the Assessing Officer as his “reasons to believe” is nothing but reproduction of a portion of order of Hon’ble Tribunal. The provisions of sub-section (3) of Section 149 mandates that where the income escaping the assessment belongs to a non-resident, and the reassessment is to be made on agent of non-resident in accordance with the provisions of Sec. 163 of the Act, the notice u/s.148 should be issued only within the period of two years from the end of the relevant assessment year up to 30.06.2012 or within a period of six years subsequent to 30.06.2012. In this case, the relevant assessment year is 2006-07. Reassessment notice was required to be issued on or before 31.3.2008. Whereas, in the case on hand the reassessment notice was issued on 30.03.2013, which is clearly beyond the period of limitation prescribed under sub-section (3) of Section 149 of the Act. The amended period of six years is applicable only from the assessment year 2012-13 onwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to have seen that the amount represents part of the contract receipts and the rate of profit for the contractor is normally estimated at 8% to 12.5% and, therefore, the DRP erred in directing the Assessing Officer is to estimate the profit at 70% of the amount. (8) The learned DRP erred in confirming the action of the Assessing Officer in charging interest u/s. 234A, 234B and 234C of the I.T. Act. The Assessing Officer and DRP ought to have considered the fact that the assessee is an NRI and the amount is to be subjected to tax u/s. 195 of the I.T. Act and, therefore, the provisions u/s. 234B and 234C have no application. (9) Any other ground or grounds that may be urged at the time of hearing. 2. M/s. Madhucon Sino Hydro JV (the Appellant) had been declared as an agent of non-resident M/s. Sino Hydro Corporation, China, vide Order dated 30-03-2013 by the Assistant Director of Income Tax (International Taxation)-II, Hyderabad (hereinafter called Assessing Officer ). The Appellant had challenged this order before the Commissioner of Income Tax (Appeals), Hyderabad. While the matter stood thus, the Assessing Officer had proceeded with the reassessment proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cer of M/s. Sino Hydro Corporation. He informed that M/s. Sino Hydro Corporation does not have PAN and is not assessed to tax in India. 9. Therefore, based on this information, the Assessing Officer had come to the conclusion that payments made by the Appellant to M/s. Sino Hydro Corporation, China are assessable in the hands of the Appellant in the capacity of Representative Assessee. Therefore, we are called upon to examine whether the above information would constitute reasons as contemplated u/s. 148 of the Income Tax Act, 1961. The fact that the Hon ble Tribunal made observation that the Assessing Officer may take suitable action for bringing the amount to tax in accordance with the provisions of the Act cannot be construed to be a direction to reopen the assessment so as to issue reassessment notice even after expiry of period of four years from the end of the relevant assessment year. The above observation made by the Hon ble Tribunal can at best be said to be a suggestion made to the Assessing Officer to consider as to whether the addition of said sum can be made or not. Therefore, the contention of the Assessing Officer that the Hon ble Tribunal had directed the reasses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of B is an incidental finding only. It is not a finding necessary for the disposal of the case pertaining to A. As regards the expression direction in section 153(3)(ii) of the Act, it is now well-settled that it must be an express direction necessary for the disposal of the case before the authority or court. It must also be a direction which the authority or court is empowered to give while deciding the case before it. The expression finding and direction in section 153(3)(ii) must be accordingly confined. Section 153(3)(ii) is not a provision enlarging the jurisdiction of the authority or court. The Supreme Court remanded the case to the High Court for deciding the question whether section 147(a) was applicable to the case. 10. Therefore, we are of the considered opinion that the Assessing Officer is not bound to blindly follow the order of Hon ble Tribunal without applying his mind independently to the facts of the case, as to whether the ingredients that are required to be satisfied before initiation of reassessment proceedings are satisfied or not. The Assessing Officer, in this case, had not applied mind of his own at all and proceeded with reasse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the decision of Hon ble Supreme Court in CIT vs. Maharaja Pratap Singh (1961) 41 ITR 421. Accordingly, the present reassessment proceedings are also not valid in law, in as much as, the sanction of the concerned Commissioner of Income Tax is not obtained. 13. We also notice from the material on record, one more fundamental flaw in the reassessment proceedings of this case, which is not even pointed out by the Appellant, is barred by limitation prescribed under provisions of sub-section (3) of Sec. 149 of the Act. The provisions of sub-section (3) of Section 149 of the Act as they stood at the relevant point of time read as follows:- (3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of *[six] years from the end of the relevant assessment year. [Explanation.-For the removal of doubts, it is hereby clarified that the provisions of sub-section (1) and (3), as amended by the Finance A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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