The case ITA 592/DEL/2021 involves an appeal by Danone SA, Gurgaon, against the order passed by the Assistant Commissioner of Income Tax (ACIT), Circle-Int. Tax. 1(2)(2), New Delhi, for the assessment year 2016-17. The appeal addresses the jurisdiction and scope of the assessment proceedings under section 143(3) read with section 144C(13) of the Income Tax Act, 1961.
The details of the case are as follows:
The case was heard on 07.09.2022 before the Delhi Bench ‘D’ of the Income Tax Appellate Tribunal (ITAT), comprising Hon’ble President Shri G.S. Pannu and Judicial Member Shri Saktijit Dey. The appellant was represented by Sh. Himanshu Sinha, Advocate, and Sh. Vibhu Gupta, CA, while the respondent was represented by Ms. Sapna Bhatia, CIT(DR).
The appellant raised several grounds in the appeal, primarily challenging the final assessment order dated 17.03.2021 passed under section 143(3) read with section 144C(13) of the Income Tax Act, 1961. The key issue included whether the ACIT exceeded the scope of limited scrutiny and examined issues beyond the authorized parameters.
In addition to the grounds raised in the memo of appeal, the appellant raised an additional ground on 25th July 2022, questioning the jurisdiction of the ACIT in examining issues beyond the scope of limited scrutiny initiated vide notice dated 08.08.2017.
The appellant’s counsel argued that the ACIT exceeded the scope of limited scrutiny, which was restricted to evaluating whether the value of international transactions was correctly shown in Form 3CEB. The ACIT, however, expanded the scope to assess the nature of revenue received, treating it as Fee for Technical Services (FTS) and taxing it accordingly. This expansion was without prior approval from higher authorities, as required under CBDT Instructions.
The Tribunal found that the ACIT violated the norms of limited scrutiny as prescribed by CBDT Instructions. The assessment order was deemed null and void due to the lack of jurisdiction. The Tribunal referred to a similar decision in the case of Danone Asia Pte Limited vs. ACIT, where the ITAT had quashed the assessment order on similar grounds.
Based on the violation of CBDT Instructions and the unauthorized expansion of the scope of limited scrutiny, the Tribunal ruled in favor of the appellant. The Tribunal quashed the impugned assessment order and set aside the order of the Commissioner of Income Tax (Appeals).
Order pronounced in the open court on 2nd December, 2022.
G.S. PANNU
PRESIDENT
SAKTIJIT DEY
JUDICIAL MEMBER
Dated: 2nd December, 2022
RK/-
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT (A)
5. DR
Assistant Registrar, ITAT, New Delhi
ITA 592/DEL/2021: Danone SA, Gurgaon vs. ACIT, Circle-Int. Tax. 1(2)(2), New Delhi
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform