Section 144C(3) of the Income Tax Act
Income-tax Act, 2025: s.275
Section 144C(3) falls under section 144C of the Income-tax Act, 1961, which corresponds to section 275 (Reference to Dispute Resolution Panel) of the Income-tax Act, 2025.
Read section 275 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 144C(3) is CIT v. Kotak Securities Ltd. (383 ITR 1), cited in 203 of the 595 judgments on BharatTax that turn on this section.
Leading authorities on Section 144C(3)
Fees for technical services under Section 9(1)(vii) can include payments for fully automated services even without direct human interface, as modern technological developments blur the specific human element in such processes.
The Commissioner of Income Tax (Appeals) cannot expand the scope of an assessment or improve the Assessing Officer's case in a manner that usurps the revisional power of the Commissioner of Income Tax under Section 263 of the Income-tax Act.
Reassessment under Section 147/148 is invalid if it constitutes a mere change of opinion by the Assessing Officer without any fresh tangible material, especially after the assessee made a full and truthful disclosure during the original scrutiny assessment under Section 143(3).
If an assessee possesses interest-free funds exceeding investments in tax-free securities, it is presumed that investments are made from these own funds, precluding disallowance of interest expenditure under Section 14A read with Rule 8D(2)(ii). Additionally, weighted deduction under Section 35(2AB) is computed on the gross expenditure incurred, not net expenditure after reducing income earned.
For fees for technical services to be taxable under a tax treaty's 'make available' clause, a transfer of technology enabling the recipient to independently perform the service in the future is necessary, beyond mere service rendition. The case also clarifies that re-insurance services do not constitute 'imparting' of information taxable as royalty.
For services to qualify as 'Fees for Technical Services' or 'Fees for Included Services' under Double Taxation Avoidance Agreements (DTAAs), they must 'make available' technical knowledge, experience, skill, or processes to the recipient, enabling them to apply such expertise independently.
The Supreme Court holds that for a service to qualify as 'fees for technical services' under Section 9(1)(vii) of the Income-tax Act or Article 12 of a DTAA, direct human involvement or intervention in rendering the service is essential. This principle applies to telecommunication services like interconnect charges and roaming charges, and also to services related to software use.
Where proceedings are initiated under Section 147, but the assessment is completed under Section 143(3), it is not a prerequisite that the assessee must have filed a return under Section 139.
Service tax paid to the Government of India is not 'on account of' the provision of services for mineral oil exploration and production, and thus does not form part of the aggregate taxable amount under Section 44BB(2)(a) and (b).
A reference to the Transfer Pricing Officer (TPO) is invalid and bad in law, which renders consequential Transfer Pricing adjustments by the Assessing Officer liable for deletion.
