SAPIEN FUNDS LTD,MAURITIUS vs. DCIT, CIRCLE-3(1)(2), INTERNATIONAL TAXATION, NEW DELHI

This appeal is filed by the Assessee against the order passed by the Deputy Commissioner of Income Tax, Circle 3(1)(2), International Taxation, New Delhi u/s 143(3) r.w.s. 263 of the Income Tax Act, 1961.

The Ld. Counsel for the assessee, at the outset, submits that order passed by the Ld.CIT, International Taxation u/s 263 of the Act has been quashed by the Tribunal in dated 08.06.2023, therefore, the consequential assessment made u/s 143(3) r.w.s. 263 of the Act on 23.06.2022 by the Assessing Officer (AO) has no legs to stand.

Heard rival contentions. On perusal of the record placed before us, we noticed that the assessee filed appeal before the Tribunal against the assessment order passed by the Assessing Officer u/s 143(3) r.w.s. 263 of the Act dated 22.06.2022 by the DCIT, Circle 3(1)(2), International Taxation, New Delhi for giving effect to the order of the Ld.CIT, International Taxation passed u/s 263 of the Act.

In the course of hearing on a query from the Bench to the Ld. Counsel as to how an appeal against the order passed by the Assessing Officer u/s 143(3) for giving effect to the order passed by the CIT(International Taxation) under Section 263 of the Act lies before the Tribunal the Ld. Counsel for the assessee submits that the assessee preferred appeal before the Tribunal as per the instructions of the Deputy Commissioner of Income Tax, Circle 3(1)(2) , International Taxation in point no.6 of the notice of demand issued u/s 156 of the Act wherein it is stated that assessee may present appeal before ITAT in Form No.36. The Ld. Counsel for the assessee further submits that the window for filing appeal before the CIT(Appeals) is not enabled by the Department for filing appeal before the CIT(A) by the Assessee and, therefore, the present appeal has been filed before the Tribunal.

We observe from the notice of demand issued u/s 156 of the Act by the DCIT, Circle 3(1)(2), International Taxation, New Delhi dated 23.06.2022 that the AO stated that if the assessee intends to file an appeal against the order passed by him the assessee may present an appeal under part B of chapter XX of the I.T. Act before 3 Income Tax Appellate Tribunal within 60 days of the receipt of the order, in Form No.36. It is the contention of the Ld. Counsel for the assessee that the window for filing appeal before the Ld.CIT(Appeals) was not enabled so as to file an appeal by the assessee and, therefore, as instructed in the demand notice an appeal was preferred before the Tribunal directly by the assessee. Having regard to the relevant statutory provision, which we have referred to earlier, point no.6 of the notice of demand u/s 156 of the Act advising the assessee to file an appeal before the Tribunal in Form No.36 is wrong and misconceived. Moreover, in view of the explicit provisions of Section 246A, an appeal against the order passed u/s 143(3) of the Act lies before the CIT(Appeals). Thus, the captioned appeal is dismissed as non-maintainable.

However, before parting, we deem it fit and proper to direct the Assessing Officer to rectify the notice of demand under Section 156 of the Act dated 23.06.2022 inasmuch as point no.6 thereof be made consistent to the statutory provisions. The aforesaid direction is being made solely with the object of mitigating the hardship that the taxpayer would face inasmuch as on one hand, the appeal against the impugned order is not legally permissible directly before the Tribunal and, on the other hand, point no.6 of the notice of demand under Section 156 dated 23.06.2022 as is presently worded would not permit the assessee to file appeal before the CIT(A), which, otherwise, it is entitled to do in view of the explicit provisions of Section 246A(1)(a) of the Act.

In the result, appeal of the assessee is dismissed for statistical purpose with the above observations.