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TMI Blog2020 (8) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... e the authority for advance ruling do not appear to be forming the subject matter of the said notice. This is also more so when the notice fails to satisfy the particulars of claim of loss, exemption, deduction, allowance or relief as mandated by Section 143(2)(i) The AAR has followed the above-noted decisions and held notice under section 143(2) merely asks the applicant to produce any evidence on which it may like to rely in support of its return. It does not even remotely disclose any application of mind to the return filed by the applicant. For this reason, AAR has held that that question cannot be said to be pending to attract the bar under clause (i) of the proviso to Section 245R(2) of the Act. - the issues of law and fact raised by the learned counsel for petitioners are no longer res integra. We do not any infirmity in the approach adopted by the AAR. Judgement in the case of Sudhir Chandra Nawn [1968 (4) TMI 1 - SUPREME COURT] is clearly inapplicable to the facts of the present case as it only states that even if the formula for calculation of tax liability under two different statutes enacted under different entries in List III of Schedule VII of the Constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s submits that the impugned order is liable to be quashed as the application of respondent No. 2 was not maintainable before respondent No. 1 because of non-existence of Jurisdictional Fact . He refers to the report under Section 245R(2) filed by the Deputy Commissioner of Income Tax to point out that the main issue before the Assessing Officer in the scrutiny proceedings is the same as before the Authority for Advance Rulings namely whether the royalty is taxable in the hands of the petitioners at the time of actual receipt or otherwise. He argues that since the questions raised in the Application before the Respondent No 1 were already pending before the Assessing Officer, the Respondent No 1 was barred from assuming jurisdiction in view of the threshold bar enshrined in clause (i) under Proviso to section 245 R (2) of the Act. 4. Learned counsel further submits that the Authority for Advance Rulings is bound to follow the mandatory statutory procedure and if the entire record and notice alone had not been examined by it, then the conclusion of the Authority would have been different. He states that though the notice under Section 143(2) is in a standard pre-printed format, y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y 49 List II the State Legislature may adopt for determining the incidence of tax the annual or the capital value of the lands and buildings. But the adoption of the annual or capital value of lands and buildings for determining tax liability will not, in our judgment, make the fields of legislation under the two entries overlapping. 5. Having heard learned counsel for the petitioners and having perused the records on record, this Court finds that the revised return has been selected for scrutiny under computer aided selection system (CASS) and a notice dated 16th August, 2018 under Section 143(2) of the Act had been issued to the petitioners. The admitted reason for selection of respondents case for scrutiny is taxable income shown in revised return is less than the taxable income shown in the original return and large refund has been claimed . In contrast the question admitted for Ruling is Whether on the facts and circumstances of the case and in law, the Royalty receivable by the Applicant from Crocs India Private Limited ( Crocs India ) for use of intellectual property rights ( IPR ) relating to design, development, marketing, distribution etc would be taxable in the h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erms of clause (i) to proviso to Section 245R(2) of the Act, on the AAR entertaining and allowing the applications. B) Sage Publication Ltd. Vs. Deputy Commissioner of Income Tax (International Taxation) It is evident on a plain reading of the notice that it does not address itself to any specific question; it does not even disclose application of mind to the returns save and except the fact that they conform to the instructions which compelled the Assessing Officer to issue a scrutiny notice on account of the international transaction reported by the assessee. The previous authority of this Court in Hyosung (supra) and L.S. Cable (supra) had the occasion to deal with identical notices. It was positively ruled that such notices ipso facto would be insufficient to attract the automatic rejection route under proviso to Section 245R(2) of the Act. Consequently, we have no hesitation in holding that the impugned order of the Ruling Authority in rejecting the application is untenable. Consequently, the order is quashed and set aside. The petitioner's application shall now be processed and independently dealt with on its merits in accordance with law by the Ruling Autho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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