9911796707
TMI Blog2025 (2) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... axation Avoidance Agreement. Hence, the respondent/Income Tax Department has issued Notice under Section 148 of the IT Act to the petitioner, which was culminated in the impugned Speaking Order as per the decision of GKN Driveshafts (India) Ltd [2002 (11) TMI 7 - SUPREME COURT]
Income Tax Department has passed the impugned Speaking Order dated 18.03.2022 without considering the CBDT Circular No.3/2016 dated 26.02.2016 and taking note of the fact that the petitioner had subsequently filed its Return of Income manually on 02.03.2022, the petitioner can be given a reasonable opportunity to explain its case afresh in the light of CBDT Circular No.3/2016 dated 26.02.2016. Therefore, the impugned Speaking Order dated 18.03.2022 can be set aside by way of remand. X X X X Extracts X X X X X X X X Extracts X X X X ..... of RBI with no reference or reliance towards the value of earlier valuation done just a few months back by the company itself. Further the assessee has income receipts from India during the year, which are not covered by the exemption of filing of return by Non Resident entities under section 115A of the Income Tax Act. Therefore, the Assessing Officer had reason to believe that income of Rs. 22,03,60,000/- (3,18,400 * 700) has escaped assessment for AY 2014-15 and the same was due to the failure of the Assessee to fully and truly disclose all material facts for the correct assessment of Income. The Assessee has as per details available on record not filed the return of Income. The Assessee is having income which is not eligible from exemption of filing income tax returns under section 115A and is obligated to file the return of Income for AY 2014-15." In this regard an opportunity of being heard is accorded to furnish your objections, if any, as laid down in the case of GKN Driveshafts (India) Ltd vs. ITO (2003) 259 ITR 19 (SC), latest by 08.02.2022 by 05.00 PM. Your objections may please be forwarded to the email id:[email protected](word format). Plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le the return of Income for AY 2014-15, but had failed to so. In the above circumstances, the Assessing Officer had reason to Lesieve that income of Rs22,03,60,000/- (3,18,400 700) has escaped assessment for AY 2014- 15 and the same was due to the failure of the Assessee to fully and truly disclose all material facts for the correct assessment of Income and as the assessee has failed to fully and truly disclosed all material facts required for correct assessment of income, the case was reopened. After obtaining approval of the Competent Authority, i.e., the Commissioner of Income Tax (International Taxation), Chennai, the case was reopened for bringing to tax income which had escaped assessment and a notice u/s 148 as per the Income tax Act, 1961 was issued to the assessee on 31.03.2021. Notice u/s 142(1) of the Income tax Act, 1961 was issued on 04.02.2022 for filing of Return of Income for A.Y 2014-15. The assessee, in response to the same had filed the Return of Income for the AY 2014-15 manually, as it was not able to upload the same due to technical glitches and requested the A.O to take note of it. 3. It is a clear case for reopening the assessment, due to the fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... truly all the material facts relating to its receipt of remittances amounting to Rs. 118,05,00,000/- for the AY 2014-15 hence, the assessment has been reopened. 7. It is brought to the notice of the assessee that the undersigned has fully complied with the direction of the Apex Court in the matter of GKN Driveshaft (India) Ltd vs. ITO (2003) 259 ITR 19(SC) and has furnished the reasons duly to the Assessee, hence, the objection is disposed of by passing this Speaking Order. 8. Without prejudice to what has been stated by the assessee in its letter dated 08.03.2022, all the objections raised by the Assessee on facts stands answered and reopened proceedings are hereby resumed in the true spirit of the Hon'ble Supreme Court's directives in the matter of GKN Driveshaft (India) Ltd." 5. The specific case of the petitioner is that the petitioner became an assessee under the IT Act and had obtained PAN Registration as an assessee only on 31.05.2021 i.e, after the issuance of impugned Notice under Section 148 of the IT Act on 31.03.2021. 6. It is submitted that there is a clear admission in the impugned order dated 18.03.2022 itself that the impugned Notice dated 31.03.2021 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 28.9. It has come on record that the ITBA records the time and date when the E-filing portal is accessed by the assessee, so the first date on which the Notices were accessed by the assessee's is duly available. This date will be considered by the JAOs as the date of issuance of Notices by the JAOs." 10. It is submitted that neither there was an issuance of valid service of notice within the statutory period of limitation for the Assessment Year 2014-15, nor on merits, it is submitted that no income had escaped assessment warranting issuance of Notice under Section 148 of the IT Act on 31.03.2021. In view of Section 46A of the IT Act read with Double Taxation Avoidance Agreement with Singapore which specifically exempts tax on capital gains under Section 46A of the IT Act, there was no scope for issuing the impugned order. 11. It is further submitted that the reasons given by the respondents for re-opening of the assessment which has been confirmed in the impugned order merely states that the difference between the Sale Value and Purchase Value (Rs.3,750 - Rs. 3,050 = Rs. 700) was "unexplained income" cannot be countenanced, as it is indeed taxable under Section 46A of the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion is not maintainable since the petitioner has an effective and efficacious alternate statutory remedy by way of an Appeal consequent to the completion of the reassessment proceedings initiated u/s. 147 of the IT Act. 16. It is submitted that the Notice u/s. 148 of the IT Act was digitally signed by the respondent on 31.03.2021. Subsequently, on 04.02.2022, a notice u/s 142(1) was sent to the assessee enclosing the impugned notice u/s. 148 and the petitioner in his reply along with objections dated 10.02.2022 has also acknowledged both the notices under Section 148 and Section 142(1). 17. It is submitted that the reasons for reopening of assessment was communicated by the respondent to the petitioner on 03.03.2022 and a Speaking Order was passed on 18.03.2022 in conformity to the guidelines laid down in GKN Driveshafts (India) Ltd Vs. ITO (2003) 259 ITR 19 (SC). 18. It is submitted that in the Speaking Order dated 18.03.2022 communicated to the petitioner there was a clear case of reopening the assessment as the petitioner had failed to file its Return of Income to explain receipt of remittances amounting to Rs. 118.05 Crores for Assessment Year 2014-15 and the claim of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of CBDT Circular No.3/2016 dated 26.02.2016, contents of which have been extracted above. However, without filing of proper Return of Income, the petitioner has claimed exemption under India-Singapore Double Taxation Avoidance Agreement. Hence, the respondent/Income Tax Department has issued Notice under Section 148 of the IT Act to the petitioner, which was culminated in the impugned Speaking Order dated 18.03.2022 as per the decision of the Honourable Supreme Court in the case of GKN Driveshafts (India) Ltd Vs. ITO reported in (2003) 259 ITR 19 (SC). 26. Considering the fact that the respondent/Income Tax Department has passed the impugned Speaking Order dated 18.03.2022 without considering the CBDT Circular No.3/2016 dated 26.02.2016 and taking note of the fact that the petitioner had subsequently filed its Return of Income manually on 02.03.2022, the petitioner can be given a reasonable opportunity to explain its case afresh in the light of CBDT Circular No.3/2016 dated 26.02.2016. Therefore, the impugned Speaking Order dated 18.03.2022 can be set aside by way of remand. 27. In the result, this writ petition is allowed and the impugned order 18.03.2022 is set aside and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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