TMI Blog2016 (5) TMI 787X X X X Extracts X X X X X X X X Extracts X X X X ..... T. Act and may be allowed to withdraw the same. A letter dated 03.05.2016 is filed to this effect. Accordingly, the assessee’s appeal for the A.Y. 2009-10 is dismissed as withdrawn. - ITA. No. 489 to 494/H/2013 - - - Dated:- 18-5-2016 - Smt. P. Madhavi Devi, Judicial Member And Shri S. Rifaur Rahman, Accountant Member For the Assessee : Mr. P. Murali Mohan Rao For the Revenue : Mr. R.B. Naik ORDER Per Smt. P. Madhavi Devi, J.M. All are assessee s appeals for the A.Ys. 2004- 05 to 2009-10. In all these appeals, the assessee has raised the grounds of appeal against the order of the CIT(A)-V, Hyderabad, confirming the order of the A.O. holding the assessee to be Representative Assessee under section 163(1) of the I.T. Act, 1961. The assessee has also raised additional grounds of appeal against the validity of the proceedings under section 163(1) read with section 153C of the I.T. Act, 1961. 2. At the time of hearing, the Ld. Counsel for the assessee, submitted that the assessee is mainly aggrieved by the order passed under section 163(1) of the I.T. Act dated 12.12.2011 in spite of the fact that the time for issuance of a notice under section 148 had lap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the orders under section 163(1) of the I.T. Act could not have been passed in view of the provisions of section 149(3) of the I.T. Act. The CIT(A) however, confirmed the order of the A.O. but did not deal with the specific ground raised by the assessee against the validity of the orders passed in spite of lapse of time limit fixed under section 149(3) of the Act. Aggrieved, the assessee is in appeal before us. 4. Ld. Counsel for the assessee, submitted that search had taken place in the case of the assessee and some of its ex-employees and Directors on 24.07.2011 under section 132 of the I.T. Act. The Ld. Counsel for the assessee further submitted that these proceedings under section 163(1) for the A.Ys. 2004-05 to 2008-09 are beyond the time prescribed under section 149(3) of the I.T. Act. He drew our attention to the provisions of section 149(3) of the I.T. Act for the relevant period. He submitted that the time limit fixed under section 149(3) of the Act for the period prior to 01.04.2012 was two years only and since the notice was issued beyond the said period of two years, according to him, the proceedings are barred by limitation. In support of his contention, the Ld. Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case before us, the relevant assessment years are the A.Ys. 2004-05 to 2008-09 wherein notice under section 163(1) has been issued after the expiry of the period of two years from the end of the relevant assessment year. Consequent to the proceedings under section 163(1), the A.O. would have to initiate the assessment proceedings. Where the time limit for initiating the assessment proceedings has lapsed, the proceedings under section 163(1) cannot be given effect to. In similar circumstances, the Hon ble Bombay High Court in the case of Ingram Micro India Ltd. vs. DCIT (cited supra) at paras 7 to 9 of its order has held as under: 7. Counsel appearing on behalf of the Petitioner has assailed the order that was passed under Section 163 on two grounds; (1) Firstly, it has been urged that under Section 160(1)(i), a representative assessee is defined to mean, in respect of the income of a non-resident specified in sub-Section (1) of Section 9, the agent of the non-resident, including a person who is treated as an agent under Section 163. In other words, a person can be treated as a representative assessee in respect of the income of a nonresident specified under Section 9(1). In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are barred by limitation, then, it would not be necessary for the Court to determine issues wider than those that are strictly necessary for disposal of the proceedings. Counsel appearing on behalf of the Revenue has relied upon the observations contained in paragraphs 15.1 and 15.2 of the impugned order in support of the submissions that the proceedings are not barred by limitation. No further submissions have been urged. 9. Clause (i) of sub-Section (1) of Section 160 provides that for the purposes of the Act, representative assessee means in respect of the income of a non-resident specified in sub- Section (1) of Section 9, the agent of the nonresident including a person who is treated as an agent under Section 163. Section 163 of the Income Tax Act, 1961 stipulates that for the purposes of this Act, agent , in relation to a non-resident includes any person in India - (a) Who is employed by or on behalf of the nonresident; or (b) Who has any business connection with the non-resident; or (c) From or through whom the non-resident is in receipt of any income, whether directly or indirectly; or (d) Who is the trustee of the non-resident and includes also any other person wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 163. In other words, what is brought to tax in the hands of the Petitioner is the capital gains which are stated to accrue to the Bermudian company. The provisions of Section 1 53(B) would therefore clearly not have any application. The judgment of the Supreme Court in Claggett Brachi Co. Ltd., v. CIT [1989] 177 ITR 4091 44 Taxman 186 dealt directly with Section 149(3). Chief Justice R.S. Pathak observed that The issue of notice under Section 148 of the Act to the agent after the expiry of two years from the end of the relevant assessment year is prohibited by the statute. In that case, the Income Tax Officer had issued notice to the agents of the assessee whereupon the agent took the defence of Section 149(3). The Income Tax Officer upheld their objection and dropped the proceedings since it was time barred. The Supreme Court held that the Officer had acted correctly in quashing the reassessment of the agent, since the provisions of Section 149(3) must be strictly construed. Thereafter, the Court went on to hold that this would not preclude the revenue from reassessing the assessee - merely because the revenue had taken out assessment proceedings against the agent of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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