9911796707
TMI Blog2025 (4) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... 148A (b) of the Income Tax Act, 1961 [the Act]; an order dated 29.08.2024 passed under Section 148A (d) of the Act; and a notice dated 29.08.2024 issued under Section 148 of the Act initiating reassessment proceedings for assessing the petitioner's income chargeable to tax for Assessment Year [AY] 2018-19. PREFATORY FACTS 2. The petitioner [Assessee] is a foreign company and a tax resident of United Kingdom. It is engaged in providing common area services, market development support services to various group entities of Ernst and Young Network (EY Network) including Indian entities, which are part of the EY Network. 3. The Assessee filed its income tax return for the AY 2018-19 on 31.10.2018 declaring a total income of Rs. 5,14,21,33,981 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it would be relevant to refer to the notice dated 20.06.2024 issued under Section 148A (b) of the Act. We consider it apposite to set out the same in entirety: "To, ERNST & YOUNG (EMEIA) SERVICES LIMITED 1 MORE LONDON PLACE, LONDON LONDON, FOREIGN United Kingdom PAN: AACCE3942J Assessment Year 2018-19 Dated: 20/06/2024 DIN & Letter No.: ITBA/COM/F/17/2024-25/1065872954(1) Sir/Madam/M/s. Subject: Online service of Orders - Letter Sub: Show Cause NOTICE u/s 148A (b) of the Income Tax Act in the case of Ernst & Young(Emeia)Services Ltd. (PAN: AACCE3942J) for A.Y 2018-19-reg Kindly refer to the above 1. In the instant case, information has been received as High Risk Cases (VRU/CRU) on INSIGHT PORTAL of Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome Tax Act. Therefore, I have reason to believe that income has escaped assessment in the case of the assessee. 6. The assessee is hereby issued a show-cause notice under section 148A (b) of the income tax Act, 1961, as to why proceedings under section 147 of the Act should not be initiated against the assessee for the reasons mentioned above. The show cause notice is being issued after taking prior approval of the specified authority. Kindly note that, the response to the show-cause notice should be e-filed on or before 15/07/2024. Further, the assessee may avail personal hearing in the case on the due date of submission. If no response is submitted, it shall be concluded that assessee has nothing to say in the matter and proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 escaping assessment. 10. In Banyan Real Estate Fund Mauritius v. ACIT & Anr.: 2024 SCC OnLine Del 5312, this Court had observed as under: "23. ....Regard must also be had to the fact that undisputedly the financial transactions which were spoken of were duly disclosed in the return which had been submitted for AY 2016-17. Merely because the petitioner had taken the position that the income was not taxable under the Act, that would not constitute a basis for the respondent forming the opinion that income had escaped assessment. The question of income being voluntarily offered to taxation would ultimately depend upon an assessee conceding to its exigibility to tax. In order to sustain a proposed reopening, it was incumbent upon the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e remittances, as sought by the AO. The Assessee claimed that its receipts were exempt from charge of tax for the reason as set out in paragraph no. 6 of the reply, which is set out below: "6. Without prejudice to the above, it is respectfully submitted that the entire receipts of the assessee have been claimed as exempt by the assessee for the reasons stated below: - The assessee had entered into an agreement with Ernst & Young LLP (earlier known as Ernst & Young Private Limited ("EYPL")). It may be noted that with respect to the said contract with EYPL, EYPL had taken an advance ruling with respect to the payments being made to the assessee. - As per the Advance Ruling, the services for which the payments so received by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onjoint reading of the contract agreement, AAR ruling decision and Information as available on the Insight portal, prima facie it is evident that the assessee's income should be taxable as per Clause 2(k) of India-UK DTAA, wherein the managerial services are taxable as Permanent establishment in the state if they are rendered for more than 90 days in a year." 14. It is at once apparent from the above that the reasons as set out in the impugned order passed under Section 148A (d) was not the information as set out in the notice under Section 148A (b) of the Act. There was no allegation in the said notice that the Assessee had a PE in India, which forms the entire basis of the order under Section 148A (d) of the Act. The decision to issue no ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
