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2022 (12) TMI 921 - AT - Income TaxValidity of assessment order passed u/s 153(1) - as argued that the assessment order passed by the Assessing Officer is beyond limitation and thus, invalid and void ab initio - scope of section 144C(1) and provisions of section 153(1) of the Income Tax Act, 1961 - HELD THAT:- The Mumbai Bench of this Tribunal IPF India Property Cyprus [2020 (2) TMI 1500 - ITAT MUMBAI] has considered an identical issue in light of provisions of section 144C(1) and amended provisions u/s.144C(1) w.e.f. 01.04.2020 and held that when there is no variation in income or loss returned by the assessee, which is prejudicial to the interest of the assessee, then question of issuing draft assessment order does not arise and consequently, the Assessing Officer does not get extended period for completion of assessment u/s.143(3) of the Income Tax Act, 1961. The provisions of section 153(1) prescribed time limit for completion of assessment for the assessee. As per the said provisions, limitation to pass assessment order under subsection (3) of section 143 of the Act, for the concerned assessment year 2014-15 was 21 months which ends on 31.12.2016. In this case, assessment order has been passed u/s.143(3) r.w.s 144C(3)(b) on 28.02.2017. If the assessment order passed by the Assessing Officer is considered as assessment order passed u/s.143(3), then the Assessing Officer ought to have passed order on or before 31.12.2016. If you consider the Assessing Officer is right in passing draft assessment order u/s.144C(1), then the Assessing Officer gets extended time and time limit for passing order is 31.12.2017. In this case, since, the Assessing Officer cannot invoke jurisdiction u/s.144C(1) and pass draft assessment order, question of extended 12 months period cannot be given to the Assessing Officer. Therefore, we are of the considered view that final assessment order passed by the Assessing Officer u/s.144C(3) r.w.s 143(3) of the Act, dated 28.02.2017 is barred by limitation, because time limit available for completion of assessment u/s.143(3) is 31.12.2016. Thus we are of the considered view that assessment order passed by the Assessing Officer u/s.143(3) r.w.s 144C(3)(b) of the Income Tax Act, 1961 dated 28.02.2017 is clearly barred by limitation and thus, assessment order passed by the Assessing Officer is void ab initio. Hence, we quash the assessment order passed by the Assessing Officer. Levying 30% tax on interest income by ignoring Article 11 of India-Cyprus DTAA on the ground that the assessee is beneficial owners which is covered under Article 11 of India- Cyprus tax treaty - The assessee has filed various details, including tax residency certificate issued by Republic of Cyprus, Ministry of Finance, to prove residential status and also notification No.86/2013 issued in terms of sec.94A of the Act and also subsequent withdrawal of said notification vide Circular No.15/2017 dated 21.04.2017 and argued that the assessee is covered under Article-11 of India-Cyprus tax treaty and liable to pay tax @ 10% - fact remains that although, the assessee has challenged issue on merits, but the issue has not been adjudicated at this point, because assessment order passed by the Assessing Officer has been quashed as void ab initio. Hence, we are not inclined to adjudicate the issue raised by the assessee on merits.
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