9911796707
TMI Blog2024 (8) TMI 352X X X X Extracts X X X X X X X X Extracts X X X X ..... Year ( AY in short) 2015-16 u/s. 143(3) r.w.s. 147 r.w.s. 144C(13) of the Income Tax Act, 1961 ( the Act in short) by order dated 12.12.2023 pursuant to the Dispute Resolution Panel-2 ( DRP in short), Bengaluru, direction u/s 144C(5) dated 29.11.2023. 2. The assessee has raised following grounds of appeal: 1. Ground 1-General Hyundai Transys INC ('Hyundai INC' or 'the Appellant') submits that the assessment order ('the order') dated 12 December 2023 passed by the Deputy Commissioner of Income Tax, International Tax, Corporate Circle 1(1), Chennai ('Ld. AO') under section 143(3) r.w.s 147 r.w.s 144C(13) of the Income-tax Act, 1961 ('the Act') is bad in law and is contrary to the facts and circumstances of the present case. The detailed grounds of appeal being independent and without prejudice to one another, including the position in law and facts is set out in the ensuing paragraphs. 2. Ground 2 Addition of Guarantee Fees received from Hyundai Transys Lear Automotive India Private Limited ('Indian Subsidiary') amounting to INR 3,908,249 (Tax effect-INR 1,641,465) 2.1. The Ld. AO and Dispute Resolution Panel ('DRP') has failed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any time before the hearing of this appeal. Consequential Relief The Appellant prays that directions be given to grant all such relief arising from the grounds of appeal mentioned supra as also all consequential relief thereto, including and not limited to reinstatement of appropriate amount of taxable income . 3. Before us, the appellant has filed petition for admission of additional grounds under Rule 11 of the Income Tax Appellate Tribunal Rules 1963. The following additional grounds are raised under Rule 11 of the Income Tax Appellate Tribunal Rules 1963: 3. Ground 3: Reassessment Proceedings initiated is barred by limitation 3.1 The Ld. AO erred in facts and law without appreciating the fact that the Guarantee fee received by the Appellant amounting to INR 3,908,249 is less than the threshold limit of INR 5,000,000 prescribed under section 149(1)(b) of the Income-tax Act, 1961 ('the Act') as amended vide Finance Act, 2021, read with CBDT Instruction No. 01/2022 and as a result the case cannot be subjected to reassessment proceedings and such proceedings conducted by the Ld. AO is barred by limitation and liable to be quashed. 3.2 The Ld. AO erred in facts and law in in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. Karamchand Premchand (P.) Ltd. [1969] 74 ITR 254 (Guj.) and CIT v. Cellulose Products of India Ltd. [1985] 151 ITR 499/[1984] 19 Taxman 278 (Guj.) (FB). Undoubtedly, the Tribunal will have the discretion to allow or not allow a new ground to be raised. But where the Tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctly assess the tax liability of an assessee. 8. The reframed question, therefore, is answered in the affirmative, i.e., the Tribunal has jurisdiction to examine a question of law which arises from the facts as found by the authorities below and having a bearing on the tax liability of the assessee. We remand the proceedings to the Tribunal for consideration of the new grounds raised by the assessee on the merits . 9. Similarly, the Hon ble Jurisdictional High Court of Madras in the case of CIT Vs Indian Bank [(2015) 230 Taxman 635 (Madras)] held as under: 4. The appellant /Revenue has challenged that portion of the order of the Tribunal allowing the raisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Assessing Officer cannot now challenge the same. This is not entirely correct. It is well settled that mere acquiescence will not give jurisdiction to an authority who has no jurisdiction. In fact this Court in CIT (Central) v. ITSC [2014] 365 ITR 68/[2013] 35 taxmann.com 443 has held that mere participation by a party in proceedings without jurisdiction will not vest/confer jurisdiction on the authority. Reason to believe that income chargeable to tax has escaped assessment is a jurisdictional fact and only on its satisfaction does the Assessing Officer acquire jurisdiction to issue notice. Thus this lack of satisfaction of jurisdictional fact can never confer jurisdiction and an objection to it can be raised at any time even in appeal proceedings. The mere fact that no objection is taken before the Assessing Officer would not by itself bestow jurisdiction as the Assessing Officer. Such an objection can be taken in appeal also. Moreover, the Apex Court in its recent decision in Kanwar Singh Saini v. High Court of Delhi [2012] 4 SCC 307 has held that it is settled position that conferment of jurisdiction is a legislative function and cannot be conferred by consent of peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cture falls would apply in this case. Therefore, for the present we are not answering questions no. 1 to 3 as formulated by the Revenue. However, we are setting aside the impugned order in its entirety in view of the discussion herein above. The issues raised with regard to capital gains tax would be reconsidered by the Tribunal in case it comes to the conclusion that the notice dated 13/11/2000 is a notice within jurisdiction of the Assessing Officer . 11. Therefore, in the light of above settled position of law and respectfully following the Hon ble Supreme Court and Hon ble High Courts judgments referred supra , we admit the additional grounds of appeal raising validity of jurisdictional notice dated 15.04.2021 u/s 148 of the Act on the anvil of limitation which goes root of the matter. 12. By preferring petition for additional ground of appeal No.3 (3.1 to 3.3), inter alia, the assessee company has challenged in this case, the jurisdiction of the AO to have issued notice dated 15.04.2021 u/s. 148 of the Act as per sec.149(1)(b) of the Act (as amended by Finance Act, 2021), no notice for re-assessment could have been issued to assessee for AY 2015-16 as the time limit for issuin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice u/s 148 of the Income Tax Act, 1961 dated 15/04/2021 was issued to the assessee company. The assessee in response to the issued notice e-filed return of income declaring an income of Rs. 18,45,97,940/- on 31/05/2021. Further reasons to re-open assessment proceedings was issued to the assessee vide office letter dated 06/12/2021. 14. Reasons for reopening was that the assessee company has not offered for taxation the entire amount of Rs. 18,97,63,119/- for taxation as income for the AY 2015-16 and on verification with the Indian entity it was noted that the Indian entity had booked expenses to the tune of Rs. 19,23,72,397/- towards payment to the assessee company in the FY 2014-15 relevant to the AY 2015-16. Hence created difference of guarantee fee of Rs. 39,08,249/- which was not offered for taxation by the appellant. 15. Before us ld.Counsel contended that the guarantee fee received by the appellant amounting to Rs. 39,08,249/- is less than the threshold limit of Rs. 50,00,000/- (Rupees fifty lakhs) prescribed under section 149(1)(b) of the Income Tax Act, 1961 ( Act in short) as amended vide Finance Act, 2021 read with CBDT Instruction No.01/2022, therefore, the case cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , if any, in response to the show-cause notice referred to in clause (b); and (iv) decide, on the basis of material available on record including reply of the assessee, as to whether or not it is a fit case to issue a notice under Section 148 of the IT Act; and (v) the AO is required to pass a specific order within the time stipulated. 20. Therefore, all safeguards are provided before notice under Section 148 of the IT Act is issued. At every stage, the prior approval of the specified authority is required, even for conducting the enquiry as per Section 148- A(a). Only in a case where, the assessing officer is of the opinion that before any notice is issued under Section 148-A(b) and an opportunity is to be given to the assessee, there is a requirement of conducting any enquiry, the assessing officer may do so and conduct any enquiry. Thus if the assessing officer is of the opinion that any enquiry is required, the assessing officer can do so, however, with the prior approval of the specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment . Substituted Section 149 is the provision governing the time-limit for issua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elapsed from the end of the relevant assessment year unless the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment. Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. (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-sections (1) and (3), as amended by the Finance Act, 2012, shall also be applicable for any assessment year beginning on or before the 1st day of April, 2012. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be subject to the provisions of section 151. 8. In the case of Ashish Agarwal (supra), Hon'ble Supreme Court held in Paras 23, 25 and 27, as under:- 23. However, at the same time, the judgments of the several High Courts would result in no reassessment proceedings at all, even if the same are permissible under the Finance Act, 2021 and as per substituted sections 147 to 151 of the IT Act. The Revenue cannot be made remediless and the object and purpose of reassessment proceedings cannot be frustrated. It is true that due to a bonafide mistake and in view of subsequent extension of time vide various notifications, the Revenue issued the impugned notices under section 148 after the amendment was enforced w.e.f. 01.04.2021, under the unamended section 148. In our view the same ought not to have been issued under the unamended Act and ought to have been issued under the substituted provisions of sections 147 to 151 of the IT Act as per the Finance Act, 2021. There appears to be genuine non-application of the amendments as the officers of the Revenue may have been under a bonafide belief that the amendments may not yet have been enforced. Therefore, we are of the opinion that some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed before this Court or not. 25. Therefore, we have proposed to pass the present order with a view avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA. 27. The present order shall be applicable PAN INDIA and all judgments and orders passed by different High Courts on the issue and under which similar notices which were issued after 01.04.2021 issued under section 148 of the Act are set aside and sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w has been substituted with new sections 147-151 (hereinafter referred to as the new law ). 3. Hon'ble Supreme Court has held that these extended reassessment notices issued under the old law shall be deemed to be the show cause notices issued under clause (b) of section 148A of the new law and has directed Assessing Officers to follow the procedure with respect to such notices. It has also held that all the defences available to assessees under section 149 of the new law and whatever rights are available to the Assessing Officer under the new law shall continue to be available. Hon'ble Supreme Court has passed this order in exercise of its power under Article 142 of the Constitution of India. 4. The implementation of the judgment of Hon'ble Supreme Court is required to be done in a uniform manner. Accordingly, in exercise of its power under section 119 of the Act, the Central Board of Direct Taxes (hereinafter referred to as the Board ) directs that the following may be taken into consideration while implementing this judgment. 5.0 Scope of the judgment: 5.1 Taking into account the decision of the Hon'ble Supreme Court in various paragraphs, it is clarified that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce under section 148 of the Act can be issued in these cases, with the approval of the specified authority, only if the case falls under clause (b) of sub-section (1) of section 149 as amended by the Finance Act, 2021 and reproduced in paragraph 6.1 above. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (ii) of that section. (ii) AY 16-17, AY 17-18: Fresh notice under section 148 can be issued in these cases, with the approval of the specified authority, under clause (a) of sub-section (1) of new section 149 of the Act, since they are within the period of three years from the end of the relevant assessment year. Specified authority under section 151 of the new law in this case shall be the authority prescribed under clause (i) of that section. 7.0 Cases where the Assessing Officer is required to provide the information and material relied upon within 30 days: 7.1 Hon'ble Supreme Court has directed that information and material is required to be provided in all cases within 30 days. However, it has also been noticed that notices cannot be issued in a case for AY 2013-14, AY 2014-15 and AY 2015-16, if the income esc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 148 of the Act. The Assessing Officer is required to pass an order under clause (d) of section 148A of the Act to that effect, with the prior approval of the specified authority of the new law. This order is required to be passed within one month from the end of the month in which the reply is received by him from the assessee. In case no such reply is furnished by the assessee, then the order is required to be passed within one month from the end of the month in which time or extended time allowed to furnish a reply expires. If it is a fit case to issue a notice under section 148 of the Act, the Assessing Officer shall serve on the assessee a notice under section 148 after obtaining the approval of the specified authority under section 151 of the new law. The copy of the order passed under clause (d) of section 148A of the Act shall also be served with the notice u/s 148. - If it is not a fit case to issue a notice under section 148 of the Act, the order passed under clause (d) of section 148A to that effect shall be served on the assessee. Tanay Sharma DCIT(OSD), ITJ-I Copy to: 1. Chairman, Members and all other officer in CBDT of the rank of Under Secretary and above. 2. Al ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... read with Section 144B of the Act, 1961 for the Assessment Year 2014-15 passed by the respondent No.4 are hereby quashed. The writ petition is allowed . 20. The Hon ble High Court of Delhi in the case of Ganesh Dass Khanna Vs Income Tax Officer [(2024) 460 ITR 546 (Delhi) / (2023) 156 Taxmann.com 417 (Delhi) has considered the entire conspectus of legal arguments contended by the both sides, in similar situation held as under: 53.1 As would be evident from the extracts set forth above, both from the Finance Minister's speech and the Memorandum, the time limit for reopening under the new regime was reduced from six (06) years to three (03) years and only in respect of serious tax evasion cases , that too, where evidence of concealment of income of Rs. 50 lakhs or more in a given period was found, the period for reopening the assessment was extended to ten (10) years. In order to ensure that utmost care was taken before invoking the extended period of limitation, the proposal was that approval should be obtained from the Principal Chief Commissioner of Income Tax, at the highest hierarchical level of the department. Likewise, the Memorandum emphasized that the new regime was forg ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
