TaxTMI 
TaxTMI 
2017 (10) TMI 635
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...."Royalty" and partly as 'Fee for Technical Services"; 3. The learned Assessing Officer has erred in facts in concluding that the Appellant has not provided any documentary support without appreciating the submissions made by the Appellant. 4. The learned Assessing Officer has failed to appreciate the nature of services rendered by the Appellant to its group entity (i.e., TNT India Pvt. Ltd) and thus has erroneously concluded that few services provided by the Appellant under the Management and Administration Services Agreement (hereinafter referred to as WAS Agreement") are in the nature of "Know-how" and accordingly has characterized a part of the fee from management and administrative support services earned by the Appellant as "Royalty" as defined in Article 13 of the Convention for avoidance of double taxation and prevention of fiscal evasion between India and United Kingdom of Great Britain and Northern Ireland. 2. During the course of pendency of appeal, the assessee has raised additional grounds assailing the validity of the assessment framed under section 143(3) r.w.s. 147 of the Act. The additional grounds raised are reproduced hereunder: "Without Prejudice to....
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....course of hearing, in order to verify the facts whether notice under section 143(2) was served upon the assessee or not, DR was asked to ascertain the facts and file a report accordingly. The learned DR sought the comments from the AO and the AO has admitted that notice under section 148 was issued on 23.11.2010 and return of income was filed in response thereto on 23.12.2010. The AO further admitted that notice under section 143(2) was not issued and after serving the notice under section 142(1), the assessment was completed. The AO further stated that since the assessee joined the assessment proceedings, the notice is deemed to have been served upon the assessee as per the provisions of section 292BB of the Act. Along with this report, the learned DR filed written submissions and placed the reliance upon the judgment of Hon'ble Delhi High Court in the case of CIT Vs Madhay Bharat Energy Corporation Ltd., (2011) 337 ITR 389 (Del), in which the Hon'ble High Court has held that the Act does not specifically provide that the assessment made under section 147 of the Act will be after issue of notice under section 143(2) of the Act. In fact the AO has basic jurisdiction to assess the i....
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.... the reassessment under section 147 r.w.s. 143(3) of the Act. Now the question arises whether the assessment framed on the basis of return filed consequent to notice under section 148 of the Act without serving notice under section 143(2) of the Act is a valid assessment. The Revenue placed reliance upon the judgment of Hon'ble Delhi High Court in the case of ACIT Vs. Madhay Bharat Energy Corporation Ltd., (supra). But later on, this judgment was modified by another order of the High Court in which it was held that the question with regard to validity of reassessment was not admitted at all by the Hon'ble High Court. Once the question was not admitted, the finding given by the Hon'ble High Court has become totally irrelevant. Therefore, we are not supposed to take the cognizance of the same. The Revenue placed the reliance upon the other judgments of the Madras High Court in the case of Areva T&D India Ltd. vs. ACIT (294 ITR 233) in which the Hon'ble High Court has held that non serving of the notice under section 143(2) is irregular, not illegal. Therefore, the matter may be remanded back to the AO for completing the assessment after issuing notice under section 143(2) of the Act.....
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....e that in the present case, no return was filed by the Assessee pursuant to the notice issued to it under Section 148 of the Act. If after receiving the letter dated 1st April 2011 of the Assessee the AO was of the view that the return originally filed in the Saral Form could not be treated as the return pursuant to the notice under Section 148 of the Act, then he should have drawn the attention of the Assessee to that fact. In the present case all that the AO did was to send a notice under Section 142 (1) of the Act. The Assessee was not made aware as to why he was required to file a return. Had a notice been issued to him under Section 143 (2) of the Act, the AO would have been obliged to let the Assessee know why he was being asked to file a return notwithstanding his letter dated 1st April 2011. In the circumstances, the Assessee was justified in proceeding on the basis that it had not committed any default in communicating to the AO that the return already filed should be treated as the return filed pursuant to the notice under Section 148 of the Act. 20. The proposal to reopen an assessment under Section 147 of the Act is to be based on reasons to be recorded by the AO. Su....