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TMI Blog2024 (1) TMI 420X X X X Extracts X X X X X X X X Extracts X X X X ..... iew has been expressed by the coordinate Bench in case of M/s. Worldpart Limited vs. DCIT ( 2022 (12) TMI 921 - ITAT CHENNAI ). No contrary decision has been brought to our notice by learned counsel for the assessee. Finance Act, 2020 has amended the provisions of section 144C (1) of the Act by omitting the words in the income or loss returned w.e.f. 01.04.2020. Thus, by virtue of the aforesaid amendment, any variation, which is prejudicial to the interest of the assessee, can lead to assumption of jurisdiction under section 144C(1) of the Act. However, this is a case relating to a period prior to the aforesaid amendment. Therefore, the amendment, being prospective in nature, would not apply. Thus, respectfully following the decisions of the coordinate Benches, we hold that the Assessing Officer has rightfully proceeded to assess assessee s income under section 143(3) of the Act. Additional grounds are dismissed. Nature of receipt - FIS or business receipts - whether the fees received would amount to fees for included services (FIS) under Article 12 of India-USA Double Taxation Avoidance Agreement (DTAA)? - HELD THAT:- FAA himself is of the opinion that the entire skill ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts and circumstances of its case and the law prevailing on the subject, a draft Assessment Order ought to have been passed u/s. 144C(1) of the Act, and hence the impugned Order passed without a draft Assessment Order is incorrect, illegal and void ab-initio and the CIT(A) ought to have held as such. 1 : 3 The Appellant submits that the impugned Order be struck down void ab initio and bad in law. 3. Since the issue raised in the additional grounds is purely legal and jurisdictional issue going to the root of the matter, which can be disposed of based on facts and materials available on record without requiring investigation into fresh facts, we are inclined to admit the additional grounds for adjudication. In sum and substance, the issue raised in additional ground is whether, the assessee, being an eligible assessee in terms of section 144C(15) of the Income-tax Act, 1961, the Assessing Officer should have passed draft assessment order in terms of section 144C(1) of the Act before passing the final assessment order. For deciding this issue, few relevant facts are required to be gone into. 4. Briefly stated, the assessee is a non-resident corporate entity incorporated in U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order. He submitted, since the Assessing Officer has not followed the mandate of section 144C(1) read with section 144C(15) of the Act, the assessment order is void ab initio. Learned Commissioner (Appeals), however, was not convinced with the submissions of the assessee. He was of the view that since the Assessing Officer has not made any variation in the income returned, which is prejudicial to the assessee, there was no requirement for passing any draft assessment order under section 144C(1) of the Act. 6. Before us, learned counsel appearing for the assessee submitted that in the return of income filed for the impugned assessment year, though, the assessee has returned income of Rs. 4,49,20,980/-, however, it has offered to tax only the royalty income of Rs. 25,39,132/-. Drawing our attention to a sample copy of return form ITR-6, learned counsel submitted, since there is no specific column for claiming exemption under DTAA, the assessee did not claim exemption under DTAA in respect of the fee received towards provision of marketing, support and research services. He submitted, though, technically the Assessing Officer has not made any variation to the income returned, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer, there is no requirement for passing draft assessment order in terms of section 144C (1) of the Act. Same view has been expressed by the coordinate Bench in case of M/s. Worldpart Limited vs. DCIT (supra). No contrary decision has been brought to our notice by learned counsel for the assessee. 9. We may further observe that Finance Act, 2020 has amended the provisions of section 144C (1) of the Act by omitting the words in the income or loss returned w.e.f. 01.04.2020. Thus, by virtue of the aforesaid amendment, any variation, which is prejudicial to the interest of the assessee, can lead to assumption of jurisdiction under section 144C(1) of the Act. However, this is a case relating to a period prior to the aforesaid amendment. Therefore, the amendment, being prospective in nature, would not apply. Thus, respectfully following the decisions of the coordinate Benches, we hold that the Assessing Officer has rightfully proceeded to assess assessee s income under section 143(3) of the Act. Additional grounds are dismissed. 10. The substantive issue raised in the main grounds relate to addition of an amount of Rs. 4,23,81,848 as FIS under Article 12 of India-US ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... personnel assigned to perform the services rendered must be professionally capable and acceptable to TCG Life Sciences Pvt. Ltd. They are to perform the duties assigned by the TCG Life Sciences Pvt. Ltd. adopting best efforts, skills and abilities to promote the interest of TCG Life Sciences Pvt. Ltd. The agreement further provides that after completion of work, assessee shall return all such information in any form, products and all study related documents to TCG Life Sciences Pvt. Ltd., which were provided to assessee during the period of research. The agreement further provides, assessee shall provide necessary advisory services related to products and services of TCG Life Sciences Private Ltd. and scientific research application in the development of its products and services. The agreement further provides that TCG Life Sciences Private Ltd. shall have the right to engage its officers to co-monitor the work assigned to the assessee. Thus, on a reading of the agreement as a whole, it appears that, though, the advisory personnel of the assessee were deployed to carry out certain work relating to services required by TCG Life Sciences Private Ltd., however, there is nothing in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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