Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

DCIT, Circle-11 (1) , New Delhi Versus Eltek SGS Pvt. Ltd. And Vice-Versa

2017 (9) TMI 1026 - ITAT DELHI

Reopening of assessment - eligibility deduction under section 80 IB - Held that:- CIT(A) has categorically held that assessee’s investment in plant and machinery is below the specified limit and therefore it is entitled to deduction under section 80 IB of the income tax act. It was further held by him that in earlier years. The deduction has not been disturbed and therefore the eligibility conditions of the assessee are satisfied. Ld. departmental representative could not point out any infirmity .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pect to the same and we have also perused the order of the Ld. CIT(A), wherein this particular argument with respect to the jurisdiction was also not challenged. In view of this we are not inclined to accept the claim of the assessee against the jurisdiction assumed by the assessing officer. In view of this we dismiss the cross objection of the assessee. - Validity of assessment under section 144C - TPA - period of limitation - need for draft assessment order - Held that:- It is an admitted .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

C. ET COMPAGNIE(Now Known as Ess Advertising (Mauritius) S. N. C. ET Compagnie) [2016 (4) TMI 45 - DELHI HIGH COURT ] - The final assessment order passed by the Ld. assessing officer is beyond the limitation period which should have been passed on or before 31st. December 2012, but was passed on 16/12/2013. In the result ground No. 1 of the appeal of the assessee is allowed and the assessment order passed by the Ld. assessing officer is quashed. - ITA No. 1253/Del/2014, CO No. 88/Del/2016 A .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction 80 IB of the income tax act, which was disallowed by Ld. deputy Commissioner of income tax, circle 11 (1), New Delhi (hereinafter referred to as the Ld. AO) wide her order dated 28/01/2013 passed under section 143 (3) read with section 147 of the income tax act. 2. The Revenue has raised the following grounds of in ITA No. 1253/Del/2014 1. On the facts and circumstances of the case and in law, the CIT(A) has erred in deleting the addition of ₹ 42101744/- made by disallowing deduction .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

order u/s 143(3)/ 147 is illegal and has to be quashed. 4. Briefly the facts of the case shows that assessee is a company which is engaged in the business of manufacturing and trading of electronic and electrical equipments. It filed its return of income on 31/10/2005 showing the total income at ₹ 1 0388 2080/- which was assessed under section 143 (3) of the income tax act dated 23/12/2008 at ₹ 1 0394 6700/- wherein claim of the assessee under section 80 IB of the income tax was allo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tal income was assessed at ₹ 4 4578 5450/-. Against which the assessee preferred appeal before the Ld. CIT(A). The Ld. CIT(A), held that gross block of investment in plant and machinery of the assessee was only ₹ 5 564817, whereas the overall limit for investment in a small-scale industrial undertaking was ₹ 3 crores. Hence, according to him the investment was within the prescribed limit and assessee was a small-scale industrial undertaking. Further, the assessee has been allow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Ld. assessing officer, whereas the Ld. authorised representative relied upon the order of the Ld. CIT(A). 6. We have carefully considered the rival contentions and also perused the orders of the lower authority. The Ld. CIT(A) has categorically held that assessee s investment in plant and machinery is below the specified limit and therefore it is entitled to deduction under section 80 IB of the income tax act. It was further held by him that in earlier years. The deduction has not been dist .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ing the relief under section 80 IB of the income tax act of ₹ 42101744/-. In the result, the solitary ground of appeal of the revenue is dismissed. 7. The cross objection of the assessee is with respect to the assumption of jurisdiction under section 147 of the income tax act. Before us no arguments were advance by the Ld. authorised representative. With respect to the same and we have also perused the order of the Ld. CIT(A), wherein this particular argument with respect to the jurisdicti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

oner Of Income Tax, Circle - 11(1), New Delhi (hereinafter referred to as the Ld. AO) passed under section 144C on 16/12/2013 pursuant to the direction of the Ld. dispute resolution panel under section 144C dated 27/11/2013 passed on the draft assessment order dated 15/02/2013 wherein the order of the Ld. transfer pricing officer dated 10/09/2012 was incorporated. Assessee has raised the following grounds of in ITA No. 1319/Del/2014:- 1. The learned deputy commissioner of Income tax has erred bo .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

y Commissioner of Income Tax has erred both on facts and in law in disallowing expenses amounting to ₹ 20,06,906/- u/s 14A in addition to ₹ 80,000/- disallowed by the appellant company in its return of income by wrongly applying Rule 8D and thereby not following decision of jurisdictional High Court in Maxopp Investment Ltd 203 Taxman 364. 10. Assessee is a private limited company who filed its return of income for assessment year 2009-10 on 29/09/2009 showing total income of ₹ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ispute resolution panel on 19/03/2013. The Ld. Dispute Resolution Panel issued direction under section 144C(5) of the Act on 27/11/2013 stating that it does not have any jurisdiction to issue any direction as there is no variation to the total income proposed by the Ld. transfer pricing officer and only disallowances made by the Ld. assessing officer under section 14 A of the income tax act. Hence objections filed by assessee before the Ld. Dispute Resolution Panel were dismissed. Consequent to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion of the DRP holding that assessee, not to be an eligible assessee. He therefore submitted that limitation prescribed under section 144C(13) does not apply to the assessee and hence the order passed by the Ld. assessing officer is beyond limitation period. He further submitted that the draft assessment order dated 15/02/2013 is also invalid. As the assessee is not an eligible assessee. According to the provisions of section 144C of the Income Tax Act. He further submitted that limitation perio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fer Pricing Officer has not proposed any variation to the arm s length price of the international transactions entered into by the assessee. Therefore, the right course of action for the Ld. assessing officer was to pass an assessment order under section 143(3) of the Income Tax Act and not to pass the draft assessment order. The above issue is squarely covered in favour of the assessee by the decision of the Hon ble Delhi High Court in case of 388 ITR 383 ESPN STAR SPORTS MAURITIUS S. N. C. ET .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was established by ESPN Mauritius Limited (now known as Worldwide Wickets, Mauritius) having 99.9 per cent. share in profit and ESS Asian Network Pvt. Limited (incorporated in Singapore) having 0.1 per cent. share. ESPN Star Sports is engaged in the business of allotting advertising time and programme sponsorship ( Ad time ) in connection with television programming. It is further stated that ESPN Star Sports has entered into agreements with ESPN Software India Private Limited (now known as Sta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t, and ESS Asia Limited (incorporated in Malaysia) having 0.1 per cent. shares. ESS Distribution is engaged in the business of distribution of sports and sports related television programmes broadcast by ESPN Star Sports, Singapore. ESS Distribution has also entered into agreements with ESPN Software India Private Limited (now known as Star Sports India Private Limited) for distribution of the channels. 4. Both ESPN Star Sports as well as ESS Distribution filed their respective returns of income .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

otes to the return of income filed by the petitioners, it was clearly mentioned that each of them was a partnership firm incorporated on March 29, 2002, under the laws of Mauritius. 5. Both the returns were picked up for scrutiny by the Assessing Officer. Since both the petitioners had entered into international transactions during the assessment year 2010-11, their cases were referred to the Transfer Pricing Officer ( TPO ) for determination of the arm's length price ( ALP ) of all the inte .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Range 1 (ADIT), International Taxation specifically asked each of them as to why the status of the firm should not be treated as foreign company and taxed accordingly. 7. By a separate letter dated March 27, 2014, each of the petitioners filed submissions before the Assessing Officer pointing out the difference between a foreign company and a foreign partnership firm. It was pointed out that neither petitioner could be considered to be a company, as it was not a body corporate in terms of sectio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eligible assessee as : (i) any person in whose case the variation referred to in sub-sec tion (1) arises as a consequence of the order of the Transfer Pricing Officer passed under sub-section (3) of section 92CA ; and (ii) any foreign company. 10. The proceedings envisaged under section 144C(2) is hat the eligible assessee shall, within 30 days of the receipt of the draft order, either file his acceptance of the variations to the Assessing Officer or file his objections to such variation with th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Assessing Officer to enable him to complete the assessment. The Dispute Resolution Panel, under section 144C(8) of the Act, has the power to confirm, reduce or enhance the variation proposed in the draft assessment order. Section 144C(10) of the Act provides that every direction issued by the Dispute Resolution Panel shall be binding on the Assessing Officer . 12. Further section 144C(13) of the Act provides that the Assessing Officer shall, upon receipt of the directions issued under section 1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e petitioners urged before the Assessing Officer, i.e., ADIT that neither of them was an eligible assessee as defined under section 144C(15)(b) of the Act. It was pointed out that neither of them were the person in whose case the variation arose as the consequence of the order of the Transfer Pricing Officer passed under section 92CA(3) of the Act. Further, neither of them were a foreign company . 14. The Assessing Officer passed the draft assessment order in the case of each of the petitioners .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

was further noted by the Assessing Officer that in both reports of the Transfer Pricing Officer, the Transfer Pricing Officer proposed no adjustment or variation to the arm's length price in the international transactions filed by the petitioners. Nevertheless, the Assessing Officer, i.e., the ADIT, computed the total taxable income as ₹ 406,95,60,867 in the case of ESS Distribution and ₹ 94,93,95,777 in the case of ESPN Star Sports. In the above draft assessment orders, each of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

4. One of the grounds in the objection was that the Assessing Officer erred in passing a draft assessment order under section 144C(1) of the Act notwithstanding that neither of the petitioners was an eligible assessee . 16. The Dispute Resolution Panel issued notices dated October 16, 2014, under section 144C(11) of the Act calling upon the petitioners to represent their case and file their respective submissions. A copy of the notices were also sent to the Assessing Officer, i.e., ADIT to repre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

#39;eligible assessee' in accordance with section 144C(15)(b) as neither the Transfer Pricing Officer proposed any vari ation in the returned income nor the assessee is a foreign company. Thus, we do not have the jurisdiction over the case. Consequently, we decline to issue any direction in this case. The proceedings here are, therefore, dismissed in limine in view of the above. 18. A copy of each of the orders was marked to the Commissioner of Income-tax-I, International Tax, New Delhi, as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessment orders. The Assessing Officer proceeded to further notice section 144C(10) of the Act and then concluded in para 4.2 as under : 4.2 Thus, even if the assessee filed seven objections before the Dispute Resolution Panel, the Dispute Resolution Panel has examined only first objection, came to the conclusion that the assessee is not an eligible assessee and declined to consider objections of the assessee for giving directions to the Assessing Officer. The Dispute Resolution Panel has not ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ot give the Assessing Officer any opportunity prior to deciding to dismiss the proceedings in limine . The Assessing Officer proceeded to analyse the scope of the powers of the Dispute Resolution Panel. It was observed inter alia by the Assessing Officer in the final assessment order, as under : 4.5...The scope of the Dispute Resolution Panel, therefore, being limited only to any variation in income/loss proposed by the Assessing Officer, the above objection relating to the action of Assessing O .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e final assessment order passed by the Assessing Officer, i.e., the Assistant Commissioner of Income-tax. 22. At the first hearing of the writ petitions, i.e., on March 11, 2015 this court, while directing notice to issue in these writ petitions, stayed the operation of the final assessment order dated January 28, 2015 issued by the Assessing Officer. 23. At the subsequent hearing on July 15, 2015, this court also stayed the penalty proceedings initiated by virtue of the notice dated July 7, 201 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ible assessee within the meaning of section 144C(15) of the Act. Mr. Kaka submitted that under section 144C(13) of the Act, the Assessing Officer was bound to issue an order in conformity with the order of the Dispute Resolution Panel. Mr. Kaka further submitted that although the Dispute Resolution Panel declined to issue any direction, its finding that neither of the petitioners was eligible assessee was binding on the Assessing Officer and he could not have proceeded to pass the final assessme .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

) No. 351 of 2016 - [2016] 7 ITR-OL 227 (Bom) and decision of this court dated February 17, 2016 in W. P. (C) No. 4262 of 2015 Honda Cars India Ltd. v. Deputy CIT [2016] 382 ITR 88 (Delhi). 27. Mr. Kaka drew attention to the deliberate disobedience by the Assessing Officer of the order of the Dispute Resolution Panel and also questioned the validity and legality of the said order. According to Mr. Kaka, this course of action was not available to the Assessing Officer particularly in view of the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

a, learned senior counsel appearing for the Revenue, submitted that while the final assessment order cannot be justified in law, the Assessing Officer ought to have passed the assessment order under section 143(3) of the Act against the petitioners and the appeal could have been filed by the petitioners before the Commissioner of Income-tax (Appeals) ( CIT(A) ). While he was not aware that the petitioners have been issued notice under section 147 of the Act, Mr. Manchanda submitted that directio .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ld that the two petitioners do not satisfy the conditions of an eligible assessee in terms of section 144(15)(b)(ii) of the Act. As already noticed under section 144C(10) of the Act the Assessing Officer had no option but to comply with the order of the Dispute Resolution Panel. Even if no direction was issued by the Dispute Resolution Panel under section 144C(5) of the Act, the fact that the Dispute Resolution Panel held that both the petitioners were not eligible assessees could not have been .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessment order dated March 28 2014, having been passed in respect of entities which were not eligible assessees , is also held to be invalid. 31. It is a matter of concern that the Assessing Officer in the present case has chosen to label the order of the Dispute Resolution Panel to be invalid and that is the justification for not complying with the said order. As already noticed, the Dispute Resolution Panel, in terms of section 144C(15)(a) is a collegium of three Principal Commissioners or .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Zuari Cement Limited (supra) where it was held that an order of assessment which is contrary to the mandatory provisions of section 144C of the Act was declared as one without jurisdiction, null and void and enforceable . It is therefore, for this reason, in the said case, the High Court of Andhra Pradesh set aside the impugned order while allowing the writ petition notwithstanding that the petitioner had a statutory remedy available to it. 32. The situation as far as the present case is conce .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e the petitioner being a foreign company, the Assessing Officer did not record the procedure under section 144C(1) of the Act and proceeded to pass the final assessment order under section 143(3) of the Act. 34. In Vijay Television P. Ltd. v. Dispute Resolution Panel [2014] 369 ITR 113 (Mad) where again the Assessing Officer passed the final assessment order under section 143(3) of the Act instead of passing a draft assessment order under section 144C(1) of the Act and then sought to issue a cor .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

section 144C of the Act did not arise. 36. As far as the decision of this court in Honda Cars India Limited v. Deputy CIT (supra) is concerned, the question that arose is whether the Assessing Officer could have passed the draft assessment order when the assessee did not satisfy the condition eligible assessee under section 144C(15)(b) of the Act. Answering the question is in the negative, the court held that the draft assessment order of the Assessing Officer is null and void and quashed on th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. Kamlakshi Finance Corporation Limited (supra). The facts in that case were that according to the Assistant Collector ( AC ), the electrical insulation tapes manufactured by the assessee, Kamlakshi Finance Corporation Limited ( KFCL ) fell under the Tariff heading 39.19 of the Schedule to the Central Excise Tariff Act, 1985 whereas the assessee was claiming they fell under Entry 85.47. The impugned order of the Assessing Officer was set aside by the Collector (Appeals) who issued a direction to .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t of the Assessing Officer in overlooking the binding order of the Collector (Appeals) and reiterating the order passed by him earlier. In response to the plea of the appellant that the officer who passed the order was not actuated by any mala fide, the Supreme Court observed, in this regard, as under : 6.... we are not concerned here with the correctness or other wise of their conclusion or of any factual mala fides but with the fact that the officers, in reaching their conclusion, by-passed tw .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

udicial issues before them, the Revenue Officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial dis cipline require that the orders of the higher appellate authorities should be followed unreservedly by .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

on Bench of this court dealt with the case where despite the clear directions given by the Commissioner of Income-tax (Appeals), the delayed refunds were paid to the petitioner without any element of interest. It was noted that the Assistant Commissioner was merely required to comply with the directions given by the Commissioner of Income-tax (Appeals) in the appellate order. However, the Assistant Commissioner took it upon himself to examine the case, as per his own understanding and therefore, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng order of the Dispute Resolution Panel is wholly unacceptable. In the final assessment order dated January 28, 2015, the Assessing Officer while discussing the order of the Dispute Resolution Panel observed inter alia in para 4.2 that : The Dispute Resolution Panel has not acted in accordance with the provisions of the Act while passing this order which is grossly illegal, against the intent of the Legislature, without following the basic principles of natural justice and adopting very narrow .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ereafter proceed in accordance with law after issuing notice to the concerned Assessing Officer and affording him an opportunity of being heard. 43. Mr. Manchanda then submitted that this court should clarify that in terms of section 144C(3)(b) of the Act, the Revenue can within a period of 30 days pass the final assessment order under section 143(3) of the Act. The court notes that the Revenue has not been able to contest the submission of the petitioners that in the present case the Revenue ha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version