SAPEIN FUNDS LTD.,MAURITIUS vs. CIT (INTERNATIONAL TAXATION) DELHI-3, NEW DELHI

ITA 976/DEL/2022Status: DisposedITAT Delhi08 June 2023AY 2017-1824 pages
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What did the Tribunal hold?

The Tribunal held that the assessee, being a tax resident of Mauritius and possessing a Tax Residency Certificate (TRC), is entitled to the benefits of the India-Mauritius DTAA. The PCIT erred in questioning the TRC and concluding that the income was taxable in India.

What were the facts?

The assessee, Sapein Funds Ltd., a Mauritius-based fund, claimed certain income as exempt based on the India-Mauritius Double Taxation Avoidance Agreement (DTAA). The Assessing Officer (AO) accepted this claim. However, the Principal Commissioner of Income Tax (PCIT) initiated revision proceedings under Section 263, holding that the AO's assessment was erroneous and prejudicial to the revenue.

What were the issues?

Whether the PCIT correctly invoked Section 263 to revise an assessment order where the AO had accepted income as exempt based on a DTAA and TRC. Whether the assessee is entitled to the benefits of the India-Mauritius DTAA despite the PCIT's objections.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 90

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Cases cited in this judgment(6)Show list

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Income Tax Appellate Tribunal, DELHIBENCH ‘D’, NEW DELHI

Before: Sh. Saktijit DeyDr. B. R. R. Kumar

For Appellant: Adv. &, Ms. Ananya Kapoor, Adv
Hearing: 20.04.2023Pronounced: 08.06.2023

Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against the order of ld. CIT(IT)-3, New Delhi dated 24.03.2022. 2. Following grounds have been raised by the assessee:

“1. That in view of the facts and circumstances of the case and in law, the impugned notice dated 06.01.2022 issued under Section 263 of the Income Tax Act, 1961 (‘the Act’), and the impugned order dated 24.03.2022 passed under Section 263 of the Act is illegal, bad in law, without juri iction and liable

2.

That the impugned notice dated 06.01.2022 and the impugned order dated 24.03.2022 does not satisfy the juri ictional requireme

The order continues below.

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