TMI Blog2020 (3) TMI 1453X X X X Extracts X X X X X X X X Extracts X X X X ..... t have been invoked in this case, the time limit of completion of assessment was available only upto 31st December 2017. The mere issuance of draft assessment order, when it was legally not required to be issued, cannot end up enhancing the time limit for completing the assessment under section 143(3). Accordingly, the assessment order passed by the Assessing Office must be held to be time barred. Assessee appeal allowed. - PRAMOD KUMAR (VICE PRESIDENT) AND RAM LAL NEGI (JUDICIAL MEMBER) For the Appellant : Madhur Agarwal For the Respondent : A K Keshari ORDER Per Pramod Kumar, VP: 1. This appeal is directed against the order dated 30th October 2018, passed by the Assessing Officer in the matter of assessment u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961 3. To adjudicate on the above grievances, only a few material facts need to be taken note of. The assessee before us is a company incorporated, and fiscally domiciled, in Cyprus. The assessee had disclosed an interest income of Rs 55,01,17,499 and offered the same to tax @ 10% under article 11(3) of the India Cyprus Double Taxation Avoidance Agreement. In the draft order issued by the Assessing Officer, for the detailed reasons set out therein, this income was proposed to be assessed @ 20% on the ground that the treaty protection under article 11(3) was not admissible as the assessee was held to be not beneficial owner of the interest income in question. The Assessing Officer issued a draft assessment order on these lines. Aggri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench decision is in the case of MSM Satellite (Singapore) Pte Ltd Vs JDIT [(2016) 75 taxmann.com 216 (Mum)] which holds that the objections before the DRP cannot be dismissed in limine simply on the ground that the form 35A submitted within the statutory time limit is a scanned copy of the original even when duly signed copy is furnished subsequently within a reasonable time. Much more important, however, is the legal position that when there is no variation in the returned income and assessed income, so far as period prior to 1st April 2020 is concerned, the Assessing Officer cannot issue a draft assessment order even in the case of an eligible assessee. In a rather recent decision in the case of IPF India Property (Cyprus) No. 1 Ltd Vs DC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued the draft assessment order, on the facts of this case, needs to be examined in the light of provisions of Section 144C(1) which provides that, The Assessing Officer shall, notwithstanding anything to the contrary contained in this Act, in the first instance, forward5 a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the eligible assessee if he proposes to make, on or after the 1st day of October, 2009, any variation in the income or loss returned which is prejudicial to the interest of such assessee [Emphasis, by underlining, supplied by us]. The assessee before us is a non-resident company incorporated, and fiscally domiciled, in Cyprus. Accordingly, in terms of Section 144C( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oposed that the provisions of section 144C of the Act may be suitably amended to:- (A) include cases, where the AO proposes to make any variation which is prejudicial to the interest of the assessee, within the ambit of section 144C; (B) expand the scope of the said section by defining eligible assessee as a nonresident not being a company, or a foreign company. This amendment will take effect from 1st April, 2020. Thus, if the AO proposes to make any variation after this date, in case of eligible assessee, which is prejudicial to the interest of the assessee, the above provision shall be applicable. 6. Once this amendment is being introduced with effect from 1st April 2020, it is beyond any doubt of controversy that so far as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in this case on 30th October 2018 but then there is no dispute that if no draft assessment order was to be issued in this case, the assessment would have been time barred on 31st December 2017. Once we hold that no draft assessment order could have been issued in this case, as the provisions of Section 144C(1) could not have been invoked in this case, the time limit of completion of assessment was available only upto 31st December 2017. The mere issuance of draft assessment order, when it was legally not required to be issued, cannot end up enhancing the time limit for completing the assessment under section 143(3). Accordingly, the assessment order passed by the Assessing Office must be held to be time barred. 8. In the light of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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