TMI Blog2023 (5) TMI 404X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax (International Taxation), Delhi, whereas, vide Corrigendum dated 27.08.2020 [Sr. No. (viii) of Notification No. S.O. 2755(E), dated 13.8.2020], it was clarified that the PCIT, Bareilly exercised jurisdiction over the Assessee who was assessed / assessable with the jurisdiction of the Pr. CIT / CIT, Moradabad - Ground Nos.1 and 2 raised by the Assessee are accepted. Assessment u/s 144C - Whether AO erred in passing a draft assessment order u/s 144C (1) without appreciating that the Assessee did not qualify as an eligible assessee u/s 144C(13), where no variation had been proposed by the AO and the Assessee was not a foreign company? - HELD THAT:- As per section 144(15)(b), eligible assessee means any person in whose case a variation prejudicial to the interest of such person is proposed to be made by the AO, which variation arises in consequence of the TPO s order, and any foreign company. Section 144(1) requires a draft of the proposed assessment order to be forwarded by the AO to such eligible assessee. In the present case, vide the assessment order dated 28.6.2022, the Assessee has been held to be a resident in India, as a consequence whereo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the DDIT / ADIT (International Tax), Lucknow u/s 147 r.w.s 144C(13) of the Income Tax Act , 1961 (hereinafter called 'the Act'). 2. The Assessee has raised the following Grounds of Appeal: 1. That on the facts and circumstances of the case, the impugned final assessment order dated 28.06.2022 passed by the DDIT/ADIT(Int l Tax), Lucknow ('the assessing officer') under section 147 r.w.s. 144C(13) of the Income Tax Act, 1961 ('the Act') is without jurisdiction, non-est, illegal and bad in law. 2. That impugned final assessment order is illegal , beyond jurisdiction and void ab initio since the ACIT, Circle-1, Moradabad (the jurisdictional Assessing officer) erred in transferring the case of the appellant without serving any notice under section 127 of the Act or providing copy of order, if any, passed under that section for transfer of case of the appellant. Assessment concluded pursuant to draft assessment order passed contrary to mandate of section 144C - impugned order is void ab initio and liable to be quashed. 3. That on the facts and circumstances of the case, the impugned final assessment order passed under section 147 r.w. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... officer/DRP erred on facts and in law in considering the day of arrival , departure, fractional days of presence as full day of stay in India for the purposes of determining residential status under section 6(1 )(a) of the Act . 8.3 That on the facts and circumstances of the case, the assessing officer/DRP erred in computing the period of stay of the appellant in India at 184 days, by taking date of departure from India as per the flight departure time, as opposed to date of immigration stamp, which is the actual proof of exit from the country. 8.4 That on the facts and circumstances of the case, the assessing officer/DRP erred in not appreciating that while computing number of stay days in India from the date of arrival to the date of departure of an assessee, the first date i.e. , the date of arrival is to be excluded. 9. That on the facts and circumstances of the case, the DRP erred on facts and in law in passing revised directions under Rule 13 of Income Tax (Dispute Resolution Panel) Rules 2009, withdrawing the exemption of salary income arising under employment contract with Singapore Company from taxation in India under Article 15 of Double Taxation Avo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 281 (SC) and Vinay Kumar Jaiswal Vs. CIT , 221 ITR 568 (Allahabad). 4. It has been contended that without a valid order of transfer passed u/s 127 of the Act, the final assessment order dated 28.06.2022, passed u/s 147 r.w.s. 144C(13) of the I.T. Act , passed by the DDIT / ADIT (International Tax), Lucknow is without jurisdiction and is liable to be quashed. Reliance, in this regard, has been placed on KIE Infrastructures Projects (P.) Ltd. , vs ITO 68 SOT 285 (Delhi-Trib.). 5. The Bench had asked the ld. DR to clarify as to whether any transfer order u/s 127 of the Act was passed for transferring the case of the Assessee. In response, vide revised written statement dated 20.01.2023, reiterated in her arguments by the ld. DR, it has been submitted that vide jurisdiction order No. 2/2020, dated 22.12.2020, passed by the ld. Principal Chief Commissioner of Income Tax (International Taxation), New Delhi, the ADIT / DDIT (International Tax), Lucknow held concurrent charge over all persons / class of persons who are assessed / assessable within the jurisdiction of the Principal CIT/CIT, Bareilly; that since the Assessee had filed return of income claiming status of non-r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laced on record, it is evident that notice u/s 148 of the Act was issued by the ACIT, Moradabad on 3.7.2019. The assessment order, on the other hand, has been passed by the DCIT (International Tax), Lucknow. However, no order u/s 127 of the Act was passed for transferring the jurisdiction from the ACIT, Moradabad to the DCIT (International Tax), Lucknow. No notice in this regard was issued to the Assessee. 6.1 It would be appropriate to reproduce here-under, the provisions of section 127 of the I.T. Act :- 127. (1) The Principal Director General or Director General or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner may, after giving the assessee a reasonable opportunity of being heard in the matter, wherever it is possible to do so, and after recording his reasons for doing so, transfer any case from one or more Assessing Officers subordinate to him (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) also subordinate to him. (2) Where the Assessing Officer or Assessing Officers from whom the case is to be transferred and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same Commissioner, it needs must be ensured (i) that the Commissioners to whom the respective Assessing Officers are subordinate are in agreement inter se regarding the transfer, (ii) that reasons are recorded for transferring the jurisdiction, (iii) that a reasonable opportunity of hearing is provided to the affected Assessee, and (iv) that an order is passed u/s 127 of the Act . 8. In this regard, in KIE Infrastructures Projects (P.) Ltd. Vs. ITO , (supra) it was held that the transfer of the case suo motu by the Assessing Officer at Agra to the Assessing Officer at Delhi , both Assessing Officers being subject to jurisdiction of different Commissioners, was unsustainable, since there was no transfer order u/s 127 of the I.T. Act, rendering the assessment order passed by the AO at Delhi void ab initio. 9. In Ajantha Industries Vs. CBDT , (supra), it was held that while making an order of transfer u/s 127 of the Act, the requirement of recording reasons is a mandatory direction under the law and non-communication thereof to the Assessee was a serious infirmity in the order, for which, the order was invalid. 10. In Vinay Kumar Jaiswal Vs. CIT , (supra), it was held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a draft assessment order u/s 144C(1) being passed. It has further been contended that even in case the Assessee were to be held to be a non-resident , the provisions of section 144C would not be applicable, as the Assessee is not an eligible assessee u/s 144C(15). Reliance has been placed on Honda Cars India Ltd. Vs. DCIT , 382 ITR 88 (Delhi), ESPN Star Sports Mauritius S.N.C. Et Compagnie Vs. Union of India , 388 ITR 383 (Delhi) and Ess Advertising (Mauritius) S.N.C. Et Compagnie Vs. ACIT , 437 ITR 1 (Delhi). 16. It has been pointed out that the provisions of section 144 C (15) (b) of the Act have been amended vide the Finance Act, 2020, w.e.f. 1.4.2020, to enlarge the definition of eligible essessee to include any non-resident (not being a Company) . It has been submitted that the amendment is applicable prospectively from assessment year 2020-21 and, therefore, not for the year under consideration, i .e. , assessment year 2016-17. Reliance in this respect has been placed on IPF India Property Cyprus. (No.1) Ltd. Vs. DCIT (IT) , 183 ITD 46 (Mumbai), Dy. Commissioner of Income Tax (International Taxation) Vs. Pramerica ASPF II Cyprus , 137 taxmann.com 380 (Mumbai), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) For the purposes of this section, (b) eligible assessee means, (i) any person in whose case the variation referred to in sub-section (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. 23. Thus, as per section 144(15)(b), eligible assessee means any person in whose case a variation prejudicial to the interest of such person is proposed to be made by the AO, which variation arises in consequence of the TPO s order, and any foreign company. Section 144(1) requires a draft of the proposed assessment order to be forwarded by the AO to such eligible assessee. 24. In the present case, vide the assessment order dated 28.6.2022, the Assessee has been held to be a resident in India, as a consequence whereof, salary income earned by the Assessee in Singapore has been taxed in India. 25. Then, in the Assessee s case, no variation prejudicial to his interest, at the hands of the AO, has arisen as a consequence of the order passed by the TPO under section 92CA(2) of the Act , nor is the Assessee a foreign company. Therefore, neither of the conditions presc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicable to assessment year 2016-17, i .e. , the year under consideration, but are applicable from A.Y. 2020-21, having been brought in w.e.f. 1.4.2000, by the Finance Act , 2020 and, thereby, in spite of his not being a company, the Assessee would fall within the enlarged definition of eligible assessee , as introduced by the said amendment, this argument need not be adjudicate upon, since firstly, the Assessee has been treated by the Department as a resident and no dispute against this has been raised before us, and then, no case of retrospective applicability of the amended provisions of section 144C(15)(b) has also been pleaded. 31. Accordingly, Ground Nos. 3 and 4 are accepted. 32. This takes us to Ground No.5, with regard to which, it has been pleaded that the provisions of section 144C of the Act being not applicable in the present case, there was not requirement to pass draft assessment order, due to which, the extended limitation of nine months u/s 144C(12) was not available and that the assessment order ought to have been passed within the time limit provided for u/s 153(2) of the Act. 33. We have held the provisions of section 144C of the Act to be not appl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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