2019 (4) TMI 2179 - HC - Income Tax

Attribution of 25% of royalty as the income assessable in the hands of the assessee which ought to be brought to tax - HELD THAT - This Court is of the opinion that the applicant/assessee s right to question the attribution of 25% and other matters connected with it can be gone into for later years in the appeal proceedings unhindered by the withdrawal of its appeal recorded by the order in 2018 (9) TMI 2161 - DELHI HIGH COURT CIT(A) shall examine the merits of the assessee s contentions and not merely rest the reasoning on the basis of the said order of this Court permitting withdrawal.

Summary

The Delhi High Court, in restoration applications C.M.APPL.18833/2019, 18834/2019, and 18835/2019 related to ITA 80/2009, 649/2009, and 1046/2009 respectively, addressed appeals for assessment years 2003-04, 2004-05, and 2005-06. The Court noted that the appellant/assessee had earlier chosen not to press these appeals due to the small amounts involved, but reserved the right to revive them if circumstances changed.The assessee contended that a subsequent order for A.Y.2016-17, which attributed 25% of royalty income as taxable in their hands, was prejudiced by the prior withdrawal order dated 20th September 2018, effectively precluding them from challenging the attribution on merits.The Court clarified that the appellant's right to contest the 25% attribution and related issues in later years remains unaffected by the earlier withdrawal. It held that the CIT(A) must "examine the merits of the assessee's contentions and not merely rest the reasoning on the basis of the said order of this Court, permitting withdrawal."Accordingly, the restoration applications were disposed of with this clarification, preserving the assessee's right to substantive adjudication on the merits in subsequent proceedings.