Assessment u/s 144C - “eligible assessee” - Validity of draft assessment order - as argued assessee not being an “eligible assessee” as defined u/s 144C(15) AO could not have passed the draft assessment order under section 144C(1) - whether the assessee can be termed as an “eligible assessee” u/s 144C(15)(b) to empower the Assessing Officer to pass the draft assessment order under section 144C(1)? - whether the assessee can fit into the definition of a foreign company as provide du/s 144C(15)(b)(ii)? - HELD THAT:- The definition of firm under section 2(23) of the Act includes a limited liability partnership. Further, in the draft assessment order passed under section 144C of the Act for the assessment year 2016–17, the status of the assessee has been shown as firm. Thus, from these facts, it becomes clear that the assessee is not a foreign company but a limited liability partnership. The aforesaid factual position has not been controverted by the learned Departmental Representative by bringing before us any documentary evidence.
As relying on ESS DISTRIBUTION (MAURITIUS) SNC ET COMPAGNIE [2018 (8) TMI 2106 - ITAT DELHI], HONDA CARS INDIA LIMITED [2016 (2) TMI 527 - DELHI HIGH COURT] and M/S ESPN STAR SPORTS MAURITIUS S.N.C. ET COMPAGNIE [2016 (4) TMI 45 - DELHI HIGH COURT] unless the assessee is an eligible assessee under section 144C(15)(b) of the Act, the Assessing Officer cannot pass a draft assessment order under section 144C of the Act. Keeping in view the principle of law propounded in the aforesaid judicial precedents, we have no hesitation in holding that the draft assessment order passed in case of the assessee for the impugned assessment year is invalid. Therefore, all the proceedings consequent thereupon are also invalid. Consequently, the draft assessment order as well as the final assessment order passed in pursuance thereof is quashed.
The Rajasthan High Court dismissed a bail application as the petitioner's counsel wanted to withdraw it. The citation for the judgment is 2019 (4) TMI 2097.
Maintainability of complaints - two complaints made by the petitioner under Section 18 read with Section 20 of the Right to Information Act, 2015 (RTI Act) were not entertained on the ground that both are composite petitions - It is the submission of the learned counsel for the petitioner that the impugned order passed by the CIC is illegal, inasmuch as the petitions were neither composite nor is the filing of the composite petitions barred under the RTI Act - petitioner has not filed an appeal as contemplated under Section 19(3) of the Act for seeking action under Section 19(8)(b) and under Section 19(8)(a)(v) - grant of compensation (19 (8)(b))/providing training (19 (8)(a)(v)) to the officials of the DDA (to be appealed under Section 19 of the RTI Act only) - prayer for penalties under Section 20(1) and 20 (2) of the Act (to be complained under Section 18) - time limitation.
Whether the CIC was justified in rejecting the complaints filed by the petitioner under Section 18(1) read with Section 20 of the RTI Act? - HELD THAT:- The petitioner apart from seeking action under Section 20(1) and (2) of the RTI Act has also prayed for grant of compensation in his favour under Section 19(8)(b) and providing training to officials under Section 19(8)(a)(v). On perusal of Section 20 of the RTI Act, it is clear that the penalty under Section 20 can be sought in a complaint as well as in an appeal. But when a prayer for action under Section 19(8)(b) or 19(8)(a)(v) is made it can be sought only in an appeal, as the said provisions are part of section 19 which relates to appeal.
The Supreme Court has in its judgment in the case of Chief Information Commissioner and Ors. v. State of Manipur and Ors. [[2013 (3) TMI 378 - SUPREME COURT]], culled out the difference between Sections 18 and 19 of the Act. It was concerned with facts where appellant No. 2 filed an application dated February 09, 2007 under Section 6 of the Right to Information Act for obtaining information from the State Information Officer relating to magisterial enquiries initiated by the Government of Manipur from 1980-2006. As the application under Section 6 received no response, appellant No. 2 filed a complaint under Section 18 of the Act before the State Chief Information Commissioner, who by an order dated May 30, 2007 directed respondent No. 2 to furnish the information within 15 days. The said direction was challenged by the State by filing a writ petition. The second complaint dated May 19, 2007 was filed by the appellant No. 2 for obtaining similar information for the period between 1980 -March 2007. As no response was received this time also, appellant No. 2 again filed a complaint under Section 18 and the same was disposed of by an order dated August 14, 2007 directing disclosure of the information sought for within 15 days. That order was also challenged by way of a writ petition by the respondent State of Manipur. Both the writ petitions were heard together and were dismissed by a common order inter alia upholding the order of the Commissioner.
So, in the case in hand, it must be held the prayer of the petitioner relatable to grant of compensation (19 (8)(b))/providing training (19 (8)(a)(v)) to the officials of the DDA, could have been prayed for only in an appeal under Section 19 of the RTI Act.
Insofar as the prayer for penalties under Section 20(1) and 20 (2) of the Act are concerned, the same could have been claimed in a complaint under Section 18 provided the case is made out on the grounds stipulated.
Thus, the petitioner could not have sought a prayer for compensation/for providing training stipulated in Section 19 by making a complaint under Section 18 read with Section 20 of the Act. To that extent surely the CIC was justified in holding that the petitions are composite. The CIC having dismissed the composite petitions being without merit, suffice it to state the petitioner is required to file an appeal under Section 19 with a prayer for grant of compensation under Section 19 (8)(b) and for a direction to provide training to the officials of the DDA under Section 19(8)(a)(v). So, it is for the petitioner to file a complaint under Section 18 and appeal under Section 19 incorporating the prayers as referred to above separately and distinctly. If such a complaint and appeal are filed the same shall be considered by the CIC in accordance with law.
It is clarified here, wherever the limitation is prescribed, the same shall be condoned, provided the complaint/appeal are filed within four weeks from the receipt of copy of this order - petition disposed off.
TP Adjustment - comparable selection - upper limit on turnover while selecting the comparable companies - HELD THAT:- Decision rendered by the Tribunal in the case of Genesis Integrated Systems (I) P. Ltd. [2011 (8) TMI 952 - ITAT BANGALORE] lays down the correct law on the application of turnover filter and that decision has to be followed. In the decision rendered in the case of Genesis Integrates Systems (I) Pvt.Ltd., it has been held that companies with turnover of above Rs.200 crores cannot be compared with companies with turnover of less than Rs.200 Crores. In view of the aforesaid decision of the Tribunal, we hold that the CIT(A) erred in not accepting the claim of assessee for excluding of companies, whose turnovers were more than Rs. 200 Crores and those companies remain un-comparable with assessee, because assessee’s turnover was only Rs. 27.61 Crores.
Two companies which would stand excluded by the application of turnover filter from the set of 10 set of companies chosen by the TPO are – (i) M/s. Infosys BPO Limited, whose turnover is Rs.1312 Crores and (ii) TCS E-Serve Limited, whose turnover is Rs.1578.40 Crores. Accordingly, we hold that the aforesaid two companies should be removed from the list of comparable companies. The TPO is directed to compute the average Arithmetic Mean profit of the comparable companies chosen by the TPO, after excluding the aforesaid two companies.
Addition u/s 40(a) - Disallowance of provision for professional fees - non-deduction of taxes at source on such payments - assessee contended that the provisions of Section 40(a) cannot be invoked, where the assessee has merely made a provision in the books of account - HELD THAT:- We are of the view that in the absence of material to show that the liability-in-question was not contingent and had crystalised, this Tribunal has no other option to uphold the order of the CIT(A). Accordingly, the order of CIT(A) is upheld and Ground No. 15 raised by the assessee is dismissed.
Forex loss - Disallowance of forex loss was on account of change in accounting method for accounting of forex gain/loss arising on account of inter-company foreign currency Receivables/Payables - HELD THAT:- This claim was rightly rejected by the Assessing Officer on the basis that prior period losses cannot be allowed as a deduction in a case where the assessee follows Mercantile Systems of Accounting. It is only loss which accrues and arises to an assessee for the period relevant to the previous year relevant to the AY. 2012-13 that can be allowed as a deduction. We are of the view that no fault can be found in the order of CIT(A). Consequently, Ground raised by assessee is dismissed.
TP adjustment towards interest of outstanding receivables from its Associated Enterprise - HELD THAT:- Undisputedly, the Transfer Pricing Officer has determined the arm's length price of the interest chargeable on outstanding receivable from the AE by applying the rate of 6.56% as per Bloomberg database. However, it is noticed that before the Transfer Pricing Officer and learned DRP the assessee had submitted that as per LIBOR rate of interest the interest chargeable on such outstanding receivable is LIBOR plus 0.5%. The aforesaid contention of the assessee has not at all been considered by the Transfer Pricing Officer and learned DRP. As held in various judicial precedents, interest on outstanding receivables has to be charged by applying LIBOR rate as applicable in the country of residence of AE. In view of the aforesaid, we direct the Assessing Officer to compute the interest chargeable on outstanding receivables at LIBOR plus 0.5%. This ground is partly allowed.
Correct head of income - assessing the interest income under the head income from other sources instead of income from business - HELD THAT:- We direct the AO to assess the interest earned on margin deposit as business income and interest on ICDs and bank deposits as income from other sources. This ground is partly allowed.
Disallowance made u/s 14A r/w rule 8D - HELD THAT:- We direct the Assessing Officer to restrict the disallowance under section 14A r/w rule 8D to the exempt income earned by the assessee during the year. Further, while computing book profit under section 115JB of the Act, no adjustment can be made by way of disallowance under section 14A read with Rule 8D. However, Explanation-1(f) of section 115JB of the Act empowers the AO to increase the book profit by disallowing expenditure incurred for earning exempt income. Therefore, the Assessing Officer may look into this aspect. This ground is partly allowed.
Disallowance of provision for income tax recoverable from Gujarat State Electricity Board (GSEB) and Essar Steels Ltd. - HELD THAT:- Following the consistent view of the Tribunal, we hold that the income tax recoverable has to be treated as income of the assessee as per the normal provisions of the Act. However, following the aforesaid decisions of the Co–ordinate Bench, we hold that the amount cannot be included while computing book profit u/s 115JB of the Act.
Seeking maintaining/hearing of the appeal without insistence on the requirement of pre-deposit of penalty - HELD THAT:- Having regard to the financial condition of the petitioner as well as the subsequent development by which the penalty imposed upon the Customs House Agent was set aside, the petitioner’s claim for relief is reasonable and ought to be granted. In these circumstances, if the petitioner prefers an appeal within four weeks from today, the CESTAT shall proceed to hear it on its merits uninfluenced on the question of limitation and without requiring pre-deposit of any amount in the facts and circumstances of the case.
Royalty receipts - interpretation of Section 9(1)(vi), Explanation (2)(iii) and (iva) of the Income Tax Act, 1961, as well as Article 12(3) of the Indo US Double Taxation Avoidance Agreement (DTAA) - ITAT held that the payments received by the assessee, were not royalty - HELD THAT:- The provisions of the Indo-US DTAA, especially Article 12(3) is identical to the substantive Section 9(1)(vi), Explanation 2(iii) and (iva) of the Income Tax Act, 1961. Article 12(3) treats the entire subject matter in a composite manner.
This Court is of the opinion that the Revenue’s arguments are unfounded because the judgment in New Skies Satellite [2016 (2) TMI 415 - DELHI HIGH COURT] specifically dealt with the provision, which the revenue relies upon, i.e. sub-clauses (iii) and (iva) of Explanation (2) to Section 9(1)(vi). This discussion is evident from paras 11, 14 and 28 in New Skies Satellite (supra).
In these circumstances, the principle enunciated in Asia Satellite Telecommunications [2011 (1) TMI 47 - DELHI HIGH COURT] and applied in New Skies Satellite (supra), i.e. if the substance or content of subject matter dealt with and interpretation given, in a particular statute or identical subject matter, also needs similar treatment, in the context of the principle of international taxation. The only departure or exception would be if the contracting states agree to alter the terms of the treaty. New Skies Satellite (supra) also held that the mere change in law with retrospective application would not in any manner be treated as an act curative to the judgment of the court.
Even if the amount were taxable, this would be covered by the judgment of this court in Director of Income Tax, International Taxation vs. GE Packaged Pover Inc, [2015 (1) TMI 1168 - DELHI HIGH COURT]
Valuation of gas - inclusion of retention charges of Cylinders wherein the final product viz gas supplied to the Customer beyond the stipulated period in the assessable value of the gas or not - HELD THAT:- The retention/detention charges is not a part of the sale price. It is only charged when the customers retain/detain the cylinders beyond the period stipulated by the appellant. Accordingly, the retention/detention charges are not includable in the transaction value of the excisable goods namely gas sold, duly packed, in the gas cylinders.
Reliance can be placed in the case of COMMISSIONER OF CENTRAL EXCISE, INDORE VERSUS M/S GRASIM INDUSTRIES LTD. THROUGH ITS SECRETARY [2018 (5) TMI 915 - SUPREME COURT] where it was held that retention/detention charges recovered by the appellant beyond the stipulated time period should not be included in the assessable value.
Addition u/s 68 - procurement of accommodation entries through share application money from nondescript companies - HELD THAT:- As on perusal of the bank accounts of the share applicant companies filed in the paper book before us, we find that money has been deposited on various dates and almost equal amount has been withdrawn within a short period leaving a very small nominal balance. This trend has been observed almost in all the share applicants.
The share applicants have paid share premium of Rs. 90 per share, whereas on perusal of the financial statement of the company for the year under consideration, we find that net profit during the year under consideration has been shown at Nil. We do not find any financial rational behind making investment by the share applicants companies at huge premium of Rs. 90 per share. No explanation has been furnished by the assessee along with evidences as to why the investor company had applied shares at a such high premium of Rs. 90 per share.
In the instant case, on summon being issued by the AO, not a single director of those companies attended before the Assessing Officer and the document containing audited financial statements, balance sheet confirmation etc. have only been filed by post and that too when this fact of non-compliance by the share applicants was brought to the notice of the assessee.
During physical verification by the Inspector of the office of the Assessing Officer, none of the share applicants was found at their given address.
Relying on the decision of NRA Iron and Steel Private Limited [2019 (3) TMI 323 - SUPREME COURT] we set aside the finding of the Ld. CIT(A) on the issue in dispute and hold that the assessee failed to discharge its onus as required under section 68 and the Assessing Officer is justified in treating the amount received against share application money as unexplained cash credit under section 68 of the Act. The corresponding commission amount is also held as unexplained. Accordingly, the grounds of the appeal of the Revenue are allowed.
Disallowance on account of derecognized interest - CIT-A deleted the addition - HELD THAT:- After perusing the aforesaid order of the Hon’ble High Court of Delhi [2014 (5) TMI 1225 - DELHI HIGH COURT] we note that the issue in dispute has been decided in favour of the assessee and therefore, Ld. CIT(A) has observed that since the issue has been decided in earlier years in favour of the assessee in its own case by the Hon’ble High Court, the addition to income on this account made in the impugned order was rightly deleted. Hence, in our considered opinion there is no illegality or infirmity in the finding of the Ld. CIT(A) on the issues in dispute, therefore, we uphold the action of the Ld. CIT(A) on the issues in dispute and reject the grounds raised by the Revenue.
Dishonor of Cheque - insufficient funds - statement of the accused under Section 313 of the Code of Criminal Procedure recorded by the learned trial Court, wherein he claimed innocence and pleaded false implication - Section 138 of the Negotiable Instruments Act - HELD THAT:- The charge against the accused would be concluded hence to be cogently proven, upon, (a) cheque, borne in Ex.CW1/A being proven to be in the handwriting of the accused, (b) return memo, borne in Ex.CW1/B, containing recitals qua, upon, presentation of Ex.CW1/A, before the bank concerned, it being refused to be honoured also hence being proven, to, be issued, from, the bank concerned.
The complainant may, upon, recoursing to an appropriate remedy, cast under the provisions of Section 45 of the Indian Evidence Act, rather could there through strive to prove the afore cheque, borne in Ex.CW1/A, carrying the authentic signatures of the accused, (a) and, thereafter it, was permissible for the complainant, to rely upon the statutory provisions, cast under the provisions of Section 139 of the Negotiable Instruments Act, qua his holding it in discharge, of, a contractual or other legal liabilities, arising inter se him, and, the accused. Nonetheless, dehors, the afore curative recoursings, for, hence, dispelling, the, effect, of Ex.CW1/A, rather being feigned, in the testification rendered hence by the complainant, to, hence assuredly contain the signatures of the accused, also, the mandate of, Section 146 of the Negotiable instrument Act, provisions whereof stand extracted hereinafter, was, also vis-a-vis, Ex.CW1/B, the purported return memo given Ex.CW1/A, hence enjoined, to be cogently satiated.
Even though, the court is statutorily empowered, to, qua the apposite return memo hence enunciating, the, declining to honour the negotiable instrument concerned, rather avail the apposite therewith presumption, as, engrafted therein, yet the afore presumption would be aptly galvanized, upon, the memo evidently carrying thereon, the official mark, and, seal, of the bank concerned - this Court holds that the learned trial Court, has appraised the entire evidence on record in a wholesome and harmonious manner, apart therefrom, the analysis of the material, on record, by the learned trial court, hence, also does not suffer from any gross perversity or absurdity of mis-appreciation, and, non appreciation of germane thereto evidence, on record.
Maintainability of petition - initiation of CIRP - Corporate Debtor failed to make repayment of its dues - disbursal of loan amount against the consideration for the time value of money - default of either in the payment of interest or in the payment of principal amount or both on the part of the CD - Section 7 of IBC, 2016 - HELD THAT:- It is quite clear that a debt can be considered as a 'financial debt' if it is disbursed against the consideration for the time value of money. It is also required to be noticed that under the provisions of Section 7 of IBC, 2016 the FC is entitled to initiate the CIRP against the CD when a default has occurred on the part of CD in relation to the repayment of financial debt owed to FC. It is the averment of the petitioner in the instant case that a sum of Rs. 1,00,00,000/- has been disbursed as loan repayable on demand. However, it is the contention of the CD that the said loan amount of Rs. 1,00,00,000/- can be re-paid at the choice of CD within a period of 5 years and in this connection Annexure R-I annexed at page 11 of the typed set filed along with the reply is pointed out by the CD.
Certain essential conditions are required to be satisfied by a Financial Creditor seeking to invoke the provisions of CIRP as against the CD before this Tribunal taking into consideration Section 5(7), Section 5(8) read with Section 7 of IBC, 2016 can take cognizance of it:
i) There must be disbursal of loan amount;
ii) Such disbursal should be made for a consideration for time value of money; and
iii) A default should have arisen either in the payment of interest or in the payment of principal amount or both on the part of the CD.
The above conditions are to be cumulatively satisfied with by the FC before this Tribunal can admit the petition and as a consequence unfold the CIRP as against the CD. However, in the instant case even though disbursal of Rs. 1,00,00,000/- by the FC to the CD is not disputed. However, in relation to whether it is made available for consideration for time value of money as well as in relation to existence of default on the part of CD at the time of initiation of the petition proceedings is vehemently denied by the CD. The petitioner is thereby required to satisfy this Tribunal that all the above 3 conditions are cumulatively satisfied by furnishing documents to the said effect. However, FC has miserably failed in this respect but on the other hand the document annexed as R-l by the respondent demonstrates it is otherwise.
There are no hesitation in dismissing this petition and further there are no hesitation in the absence of default on the part of the CD, in imposing a fine of Rs.1,00,000/- upon the FC for invoking the provisions of IBC, 2016 as against the CD under Section 75 of IBC, 2016 which amount shall be payable to the CD by FC within 10 days from the date of this order.
Prohibition of Benami Property Transactions - powers exercised by the Adjudicating Authority which has limited jurisdiction either to adjudicate property benami - order passed by the learned Single Judge staying order of Adjudicating Authority passed under Section 26(3) of the Act 1988 - As submitted that Ld. Single Judge overlooked nature of directions given by Adjudicating Authority and irrespective of the fact that whether respondent is benamidar or beneficial order after giving opportunity of hearing upon issuance of show cause of notice and order was passed and, therefore, it is not violative of principles of natural justice.
HELD THAT:- As challenging to the order passed by learned Single Judge in exercise of extraordinary jurisdiction under Article 226 and 227 of the Constitution of India, we are of the view that all contentions including that of powers conferred upon Adjudicating Authority under Section 26(1) (3) and whether such powers conferred upon Adjudicating Authority vis-a-vis jurisdiction, all can be raised before Appellate Tribunal exercising vide appellate powers under Section 46 of the Act 1988.
Even after the order is passed by the Appellate Tribunal further appeal is provided before the High Court under Section 49 of the Act 1988, we are of the considered opinion in view of decision of the Apex Court in the case of Thansingh Nathmal & Ors. [1964 (2) TMI 79 - SUPREME COURT] that High Court is not to interfere with the order passed by the Adjudicating or Competent Authority when inbuilt efficacious alternative remedies are available, we find that oral order passed by learned Single Judge is accordingly deserves to be stayed till further order till final disposal of the petition.
Non appearance by assessee on the date of hearing - Reasonable cause for non-representation on the date of hearing - HELD THAT:- Last opportunity of hearing was given to the assessee fixing the date of hearing on 02/04/2019. Despite this, the assessee remained unrepresented. In the aforementioned peculiar facts and circumstances of the case, in the absence of any representation on behalf of the assessee or petition seeking time, it can be safely presumed that the assessee is not serious in pursuing the appeal filed.
Accordingly the only alternative left is to dismiss the appeal of the assessee in limine. Support is drawn from the order of the Tribunals in Commissioner of Income Tax vs. Multi Plan India (P) Ltd. [991 (5) TMI 120 - ITAT DELHI-D] and Estate of Late Tukojirao Holka vs. CWT [1996 (3) TMI 92 - MADHYA PRADESH HIGH COURT]
Before parting, it is appropriate to add that in case the assessee is able to show that there was a reasonable cause for non-representation on the date of hearing, it would be at liberty if so advised to pray for a recall of this order. In the result, the appeal of the Assessee is dismissed.
Stay petition - Addition u/s 68 - claim of exemption u/s 10 (38) denied - HELD THAT:- We find out of the total tax demand of Rs.28,12,330/- the assessee has already paid an amount of Rs.14,12,500/- plus Rs.8,50,000/- which is more than 50% of the total demand. We, therefore, find merit in the argument of the Ld. Counsel for the assessee that full stay should be granted to the remaining amount.
We, therefore, grant stay on the realization of the balance outstanding demand for a period of 6 months from the date of this order or the order of the Tribunal whichever is earlier. The request of the assessee for out of turn hearing is also accepted and the appeal is fixed for hearing on 11.06.2019 which was announced in the open court. It was further announced that no separate notice of hearing shall be sent to which both the parties agreed. The stay application filed by the assessees is accordingly allowed.
The request of the assessee for out of turn hearing is also accepted and the appeal is fixed for hearing on 11.06.2019 which was announced in the open court. As further announced that no separate notice of hearing shall be sent to which both the parties agreed. The stay application filed by the assessees is accordingly allowed.
Nature of expenditure - Revenue share of licence fees - Whether revenue expenditure allowable as deduction u/s 37(1) - HELD THAT:- Question No. (i) is covered against the Revenue passed by this Court in [2016 (4) TMI 1410 - BOMBAY HIGH COURT] involving this very assessee. Without recording separate reasons, therefore, this question is not considered.
Disallowance of interest expenditure towards interest free loan to the subsidiary - HELD THAT:- Question No. (ii) is covered by the virtue of the decision of the Supreme Court in the case of S.A. Builders Ltd [2006 (12) TMI 82 - SUPREME COURT] Hence, this question is also not entertained.
Appeal is admitted for consideration of following substantial question of law:-
Whether in facts of the case, the Tribunal was right in law in remanding the question of deduction of provision made by the respondent – assessee for leave encashment before the Assessing Officer with further direction not to recover the sum till the availability of the decision of the Supreme Court against the judgment of the Calcutta High Court holding that Section 43B(f) of the Income Tax Act, 1961 was unconstitutional?
Seeking peaceful possession of the plot of land free from any encumbrances along with structure standing thereon to respondent No.1 - HELD THAT:- Learned advocate appearing for the appellant is to seek appropriate instructions in this regard on, or before 01.05.2019 - Registry to list this matter along with Special Civil Application No. 5816 of 2017. S.O to 01.05.2019.
Initiation of Corporate Insolvency Resolution Process - Financial Creditors - HELD THAT:- There are no opinion, till it is made known that any of the applicant is a 'Financial Creditor' or 'Operational Creditor' but not an allottee. In such cases, the application by non-allottee under Sections 7 or 9 may not wait the decision of the Hon'ble Supreme Court wherein the question of the Explanation below of Section 5(8) is under consideration.
The appeal is adjourned - Place this appeal for orders on 15th May, 2019.
Reopening of assessment u/s 147 - “reason to believe” OR “reason to suspect” - Whether assessee has duly filed return of income for the assessment year under consideration? - Assessee has alleged that the AO in his reason record for reopening of assessment stated that the assessee has not filed any return of income for the assessment year under consideration whereas the assessee has duly filed return of income for the assessment year under consideration - HELD THAT:- Respectfully following the ratio of judgement of Hon`ble Jurisdictional High Court in the case of Sunrise Education Trust v. Income Tax Officer[2018 (2) TMI 1471 - GUJARAT HIGH COURT] wherein it was held that when the AO in the reasons recorded proceeded on the erroneous footing that the assessee has not filed return of income at all and when it is not in dispute that the assessee did file the return of income for the assessment year under consideration, which was duly acknowledged by the department, then, it has to be held that the entire reasoning thus proceeded on the wrong premises that the assessee had never filed the return.
This, itself would be sufficient to annual the notice of reopening the assessment. In view of the above and in the light of ratio laid down by the Hon`ble High Courts of Gujarat as quoted above and respectfully following the same, we hold that entire reasoning recorded by the AO for initiation of reassessment proceeding and issuance of notice under section 148 of the Act was on the wrong and incorrect facts that the assessee has never filed the return of income, and in fact, it was filed.
This view is further supported by decision of Co-ordinate Bench of Surat Tribunal in the case of Vishal Dilip Rai [2018 (9) TMI 2022 - ITAT SURAT] in which following the decision of Hon`ble High Court of Gujarat in the case of Sunrise Education Trust[2018 (2) TMI 1471 - GUJARAT HIGH COURT] quashed the reopening of assessment as the reasons mentioned that the assessee has not filed return whereas the assessee did file the return of income.
We are inclined to hold that the initiation of reassessment proceeding u/s.147 of the Act and notice under section 148 of the Act of the Act and all subsequent proceedings and orders have been issued, conducted, passed without having valid jurisdiction, and therefore, the same are bad-in-law and hence, we quash the same. Accordingly, legal ground no. 1 above of the assessee is allowed and notice under section 148 of the Act with impugned reassessment proceeding of the AO /CIT (A) are quashed.
Validity of assessment order passed u/s 144C - as per assessee the conditions prescribed for invoking the said provisions do not exist in the present case - HELD THAT:- In the instant case, the assessee herein is an eligible assessee. However, there is no variation in the income or loss returned, which is prejudicial to the interests of the assessee. Hence the second condition prescribed in sec.144C(1) was not satisfied. Hence the approach of the AO in adopting the procedure prescribed in sec.144C of the Act is not in accordance with the mandate of law. We get support for our view from the decisions rendered by Chennai bench and Pune bench of Tribunal in the cases referred above. Hence the assessment order passed by the AO gets vitiated and the same is liable to be quashed. - Decided in favour of assessee.
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