PRAEFINIUM INDIA OPPORTUNITIES F LTD vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAXATION 2 (2) (2) NEW DELHI

PDF · subscribers
W.P.(C)/7627/2023HC DelhiDLHC01021641202330 May 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court agreed with the submission made by the revenue's counsel. The Court found merit in the contention that the petitioner's reply dated 24.04.2023 to the notice under Section 148A(b) was not taken into account while passing the impugned order dated 27.04.2023 under Section 148A(d). The Court acknowledged that this lapse might have occurred because the reply was not uploaded on the designated portal. Consequently, the Court set aside the impugned order. The AO was directed to furnish the information or material available with them that prompted the assessment/reassessment proceedings to the petitioner within two weeks of receiving the judgment. The petitioner would be given an opportunity to file a response to this material. The AO was also directed to accord a personal hearing to the petitioner's authorized representative after issuing a notice indicating the time and date of the hearing. The AO is required to pass a speaking order, a copy of which will be furnished to the petitioner. The writ petition was disposed of in these terms.

What were the facts?

The petitioner, Praefinium India Opportunities F Ltd., a company incorporated in the Virgin Islands (British) and a "non-filer", is challenging an order dated 27.04.2023 passed by the Deputy Commissioner of Income Tax (DCIT), Circle International Taxation 2(2)(2), New Delhi, under Section 148A(d) of the Income Tax Act, 1961. The assessment year in question is 2019-20. The principal allegation against the petitioner is that its investment of Rs. 43,52,34,000/- in equity shares of Mentor Capital Ltd. remains unexplained. The petitioner asserts it has not claimed any tax treaty exemptions and no income has accrued or arisen in India, thus not being required to file a return. The petitioner also claims no information or material was provided to justify the assessment/reassessment proceedings. A reply dated 24.04.2023 to a notice under Section 148A(b) was filed but allegedly not considered in the impugned order.

What were the issues?

1. Whether the Assessing Officer (AO) erred in passing an order under Section 148A(d) of the Income Tax Act, 1961, without considering the petitioner's reply dated 24.04.2023 to the notice under Section 148A(b). Assessee's Contentions: The petitioner argued that its reply dated 24.04.2023 to the notice under Section 148A(b) was not taken into account by the AO while passing the order under Section 148A(d). The petitioner also asserted that it was not required to file an income tax return as no income accrued or arose in India and it was not claiming any tax treaty benefits. Furthermore, the petitioner contended that no information or material was furnished to it to form the basis for assessment/reassessment proceedings. Revenue's Contentions: The revenue, through its counsel, conceded that the petitioner's reply might not have been considered due to it not being uploaded on the designated portal. However, the revenue acknowledged that the petitioner had e-mailed its response. The revenue suggested that the AO should be directed to consider the petitioner's reply.

Which sections of the Income-tax Act were involved?

Section 148A,Section 148A(b),Section 148A(d)

AI-generated summary — verify with the full judgment below

W.P.(C)No.7627/2023 Page 1 of 3

$~45 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Decision delivered on: 30.05.2023 + W.P.(C) 7627/2023 & CM Nos.29582-83/2023

PRAEFINIUM INDIA OPPORTUNITIES F LTD..... Petitioner Through: Mr Afaan Arshad, Mr Vibhore Batwara and Mr Brijesh Ujjainwal, Advs.

versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE INTERNATIONAL TAXATION 2 (2) (2) NEW DELHI. Respondent Through: Mr Vipul Agrawal, Sr Standing Counsel with Mr Gibran Naushad and Ms Sakshi Shairwal, Jr Standing Counsels.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J. (ORAL): CM No.29583/2023 1. Allowed, subject to just exceptions. W.P.(C) 7627/2023&CM No.29582/2023 [Application filed on behalf of the petitioner seeking interim relief] 2. Issue notice. 2.1 Mr Vipul Agrawal, learned senior standing counsel accepts notice on behalf of the respondent/revenue. 3. Given the direction that we propose to issue, Mr Agrawal says, he does not wish to file a counter-affidavit, andthat he will argue the matter, based on the record presently available with the Court. 3.1 Therefore, with the consent of learned counsel for the parties, the Digitally Signed By:ATUL JAIN Signing Date:21.06.2023 18:22:34 Signature Not Verified

W.P.(C)No.7627/2023 Page 2 of 3

matter is taken up for hearing and final disposal, at this stage itself. 4. This writ petition concerns Assessment Year (AY) 2019-20. 5. The principal allegation against the petitioner is, that its investment in equity shares of a company going by the name Mentor Capital Ltd. amounting to Rs.43,52,34,000/- remains unexplained. 6. Concededly, the petitioner is a company incorporated in the Virgin Islands (British). 7. Admittedly, the petitioner is a “non-filer”. The petitioner has asserted, that it is not claiming any tax treaty exemptions. 8. The petitioner also asserts,that no income has accrued or arisen in India. Based on this, the petitioner takes the stand, that it was not required, in law, to file an income tax return. 9. Notwithstanding the aforesaid, the petitioner also asserts, that no information or material was furnished to it, which could provide the basis for the Assessing Officer (AO) to proceed in assessment /reassessment proceedings against it. 10. It appears, that the petitioner had filed a reply dated 24.04.2023 to the notice dated 27.03.2023 issued under Section 148A(b) of the Income Tax Act, 1961 [in short, “Act”]. 11. The record discloses, that while passing the order dated 27.04.2023 under Section 148A(d) of the Act, the aforementioned reply of the petitioner was not taken into account. 12. Mr Agarwal says, that this lapse perhaps occurred because the reply was not uploaded on the designated portal. 13. Mr Agarwal, however, says that the record, as presently available, shows that the petitioner had e-mailed its response. Therefore, Mr Agarwal Digitally Signed By:ATUL JAIN Signing Date:21.06.2023 18:22:34 Signature Not Verified

W.P.(C)No.7627/2023 Page 3 of 3

says that the best way forward would be to direct the AO to consider the reply. 14. We tend to agree with Mr Agarwal’s submission. 15. Accordingly, the impugned order dated 27.04.2023 passed under Section 148A(d) of the Act is set aside. 16. The AO is given liberty to pass a fresh order. However, before the AO proceeds further, he/she will furnish the information or material available with her/him which propelled the AO to trigger assessment/reassessment proceedings against the petitioner. 17. This material will be furnished by the AO to the petitioner within two weeks of receipt of a copy of the judgment. The AO will, in such an eventuality, accord time to the petitioner, it chooses to file a response to the information/material it is confronted with. 18. The AO will also accord personal hearing to the authorized representative of the petitioner. For this purpose, the AO will issue a notice to the petitioner, which would indicate the time and date of hearing. 19. Needless to add, the AO will pass a speaking order; a copy of which will be furnished to the petitioner. 20. The writ petition is disposed of in the aforesaid terms. 21. Consequently, the pending application shall stand closed. 22. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

MAY 30, 2023/aj Digitally Signed By:ATUL JAIN Signing Date:21.06.2023 18:22:34 Signature Not Verified

More judgments on Section 148A

All 3,543 judgments and leading authorities on Section 148A →

Latest GST High Court judgments

Search GST case law →