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TMI Blog2024 (9) TMI 953X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee as per section 144C(15)(ii) of the Act for the impugned assessment year being a resident. Assessee appeal allowed. - Smt. Beena Pillai, Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Appellant : Shri Bharadwaj Sheshadri, Advocate And Shri K. Sheshadri, CA For the Respondent : Shri Senthil Kumar N., CIT(DR)(ITAT), Bengaluru. ORDER PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER This appeal is filed by the assessee against the final assessment order passed u/s. 147 r.w.s. 144C(13) of the Act dated 2016017 passed by the Assessing Officer for the AY 2016-17 on the following grounds:- Sl. No. Grounds of Appeal Tax Effect 1. The impugned directions of the Dispute Resolution Panel (DRP) and order of the Assessing Officer (AO) are, bad in law, lacking in jurisdiction, violative of the principles of natural justice, non-speaking and deserve to be quashed. 52,19,475 2. The DRP/ AO erred in treating the Appellant as a non-resident and assuming jurisdiction and ought to have noted that the Appellant was a resident and thus not an eligible assessee as per section 144C(15)(b). 52,19,475 3. The DRP/ AO, having accepted the fact that the Appellant was resident in India dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The AO noted that the reason to issue notice u/s. 148 is based on information regarding escapement of income based on sham dividend and fictitious losses which was not disclosed by the assessee nor available to the AO which was received after completion of scrutiny proceedings. The issue of escapement has emerged after the date of completion of scrutiny assessment on consequent survey action u/s. 133A of the Act conducted in the case of JM Financial Asset Management Ltd. by DDIT, Unit 3(1), Mumbai on 15.02.2021. In the light of above facts and material available on record, order dated 30.06.2022 was passed u/s. 148A(d) of the Act that the case of the assessee is a fit case for issuance of notice u/s. 148 after due approval from the competent authority. Accordingly the objections of the assessee for reopening the assessment was disposed off. 3. The AO noted that a survey u/s. 133A was carried out in the case of J.M. Financial Asset Management Ltd. by DDIT, Unit 3(1), Mumbai on 15.02.2021 and it was found that a number of investors had claimed fictitious losses in equity/derivative trading. It was found that assessee had claimed divided exempt from tax to the tune of Rs. 1,30,96,832 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance of notice u/s. 148 till completion of order u/s. 147 r.w.s. 144C the assessee was a non-resident and covering the period of 30.6.2022 (date of notice u/s. 148) to 31.5.2023 (date of draft assessment order), the assessee was filing return in India in the status of a non-resident. Therefore, even though the assessee was a resident for the FY 2015-16, the current status of the assessee when the case was reopened was of non-resident and accordingly the current jurisdiction of the assessee was with AO, DCIT, Intl. Taxation, Circle 1(1), Bengaluru. The ld. DRP held that the AO (International Taxation) has correctly assumed the jurisdiction and reopened the case. 7. The ld. DRP after considering the issue on merits did not accept the submissions of the assessee and passed order on 26.02.2024. In consequence the AO passed the final assessment order on 05.03.2024. Aggrieved, the assessee is in appeal before the ITAT. 8. The ld. AR reiterated the submissions made before the lower authorities and strongly argued that the AO, JCIT(OSD), Intl. Taxation, Circle 1(1) has wrongly issued notice to the assessee. The jurisdiction of the assessee is not lying with International Taxation Officer a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad reason to believe that income of assessee has escaped assessment and after following the due procedure notice was issued to the asse and order has been passed u/s. 147 r.w.s. 144C(1). During the course of survey it was found that JM Financial Asset Management Ltd. has violated SEBI Rules Regulations and did not file information within the due time, therefore dividend received from JM Financial and claimed as exempt income is escapement of income. He reiterated the case laws relied on by the ld. DRP. 10. Considering the rival submissions, we note that assessee was issued notice u/s. 148 on 30.06.2022 for AY 2016-17 by JCIT(OSD), Intl. Taxation, Circle 1(1), Bangalore, after recording reasons and approval. The assessee has challenged the legal issue regarding jurisdiction of the AO for issuing notice. During the remand proceedings, the AO after examining the passport observed that for the relevant AY 2016-17, the assessee was resident and the ld. DRP also accepted that during relevant assessment year, the assessee was a resident. However, the ld. DRP has considered the residential status on the date of issuing notice u/s. 148 which is not correct. It is well settled that the law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion to be answered is whether these dates are to apply to the accounting year or the year of assessment. They must be held to apply to the assessment year, because in income-tax matters the law to be applied is the law in force in the assessment year unless otherwise stated or implied. The first datum line therefore affected only the assessment year of 1940-41, because the amendment did not come into force till the 1st of April 1940. That means that the old law applied to every assessment year up to and including the assessment year 1939-40. This decision is authority for the proposition that though the subject of the charge is the income of the previous year, the law to be applied is that in force in the assessment year, unless otherwise stated or implied. The facts of the said decision are different and distinguishable and the High Court was clearly in error in applying that decision to the facts of the present case. (emphasis supplied) 17.6 We need not multiply on the case law on the subject as the principles aforesaid remain settled and unquestionable. Applying these principles to the case at hand, we are clearly of the view that the provision in question, having come into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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