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In an increasingly globalized economy, businesses with cross-border operations face complex and ever-evolving international tax challenges. Effective tax planning and compliance are crucial for optimizing tax liabilities and avoiding legal pitfalls. This guide provides insights and strategies for navigating the complexities of international taxation. We provide a comprehensive overview of key dates and legislative developments to help you stay ahead.
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In an increasingly globalized economy, businesses with cross-border operations face complex and ever-evolving international tax challenges. Effective tax planning and compliance are crucial for optimizing tax liabilities and avoiding legal pitfalls. This guide provides insights and strategies for navigating the complexities of international taxation.
Facts: Pursuant to search and seizure operation at the joint shop of the assessee, cash, gold jewellery and silver jewellery were found along with loose documents and sheets. The loose documents and sheets were impounded, but the gold and silver were considered stock in trade, and therefore, were not seized. The assessee filed its return of income declaring certain income.
The Assessing Officer passed an assessment order under section 143(3) wherein certain additions were made to the income that was declared by the assessee on the basis of unexplained cash and on account of excess stock not recorded in the books of account.
The assessee preferred an appeal before the Commissioner (Appeals) against the assessment order.
During the pendency of the appeal, the revenue audit raised an objection to the assessment order that the assessment had not been conducted in a manner prescribed by the Act and there was violation of section 69A.
The Assessing Officer issued notice on the basis of audit objections under section 148A(b).
The assessee submitted a detailed reply wherein he asked for copies of audit objections and all relevant documents and also asked for personal hearing. However, order was passed by the Assessing Officer under section 148A(d) rejecting the reply submitted by the assessee without providing him copies of audit objections and also without providing him opportunity of personal hearing. A notice under section 148 had also been issued proposing reassessment of income.
On writ petition, the assessee submitted that the Assessing Officer had acted in undue haste.
Held: There is no dispute regarding explanation given under section 148 regarding information that can be relied upon by the Assessing Officer to reopen assessment of escaped income. Revenue Audit Objections can be considered as a valid ground for opening assessment that has concluded. [Para 15]
It is opined that the reply of the assessee had specifically asked for documents to be supplied including complete case proceedings and for personal hearing, which was not given. The Assessing Officer has acted in undue haste. [Para 16]
The orders under section 148A(d) and under section 148 are set aside. The revenue shall provide all relevant documents that have been asked for by the assessee in his representation by making payment of necessary fees to the department, within a period of one week from today. The assessee shall submit his reply within one week, thereafter. A personal hearing shall be given by the Assessing Officer, and an order under section 148(d) be passed after considering the submissions made by the assessee in his reply as also his personal hearing within three weeks, thereafter. [Para 17]
Accordingly, the writ petition is allowed only to this extent. As a result, the grounds raised by the revenue are dismissed.
In Favor of: The Assessee
Facts: Appellate Tribunal – Powers of (Additional grounds) – Assessment years 2005-06 – Assessee filed return – Thereafter, assessee filed revised return enhancing declared return – Assessee claimed that said revision was necessitated in light of settlement which had been arrived at with revenue in earlier years – Assessing Officer while framing order of assessment refused to accept aforesaid declarations and thus chose not to proceed in accordance with settlement which had been alluded to – Thereafter, Tribunal remanded matter to Assessing Officer – However, Assessing Officer by relying on CBDT Circular no. 549, dated 31-10-1989 held that assessee could not be accorded relief which would result in assessed income falling below that which was disclosed in return of income – Whether while ordinarily an assessee might be bound by return of income as furnished, in case Tribunal were to admit a question and proceed to accord relief, same could not be denied or be made subject to a return of income being revised.
Held: We hold, that even though a mistake was committed by the Assessee and it was detected by him after the order of assessment, and the order of assessment is not erroneous, none the less it is open to the Assessee to file a revision before the Commissioner under Section 264 of the Act and claim appropriate relief. But it should not be forgotten that the power to be exercised under Section 264 is a revisionary one. The limitations implicit in the exercise of such power are well known. The jurisdiction is discretionary; Whether in a particular case, on the basis of facts disclosed, the Commissioner will exercise his jurisdiction and interfere in the matter, is a matter of discretion. It is certainly a judicial discretion vested in the Commissioner, to be exercised in accordance with law. We are not called upon to pronounce on the scope and amplitude of the revisional power. The only question mooted for our consideration in this case is whether the Commissioner has got revisional jurisdiction at all, where the Assessee having included the income for assessment, can claim the relief of weighted deduction under Section 35B of the Act, for the first time, in a petition filed under Section 264 of the Act. On that aspect of the question, we have no doubt in our mind that the Commissioner has jurisdiction to entertain a revision petition under Section 264 of the Act.
Held, yes – Whether insistence of revenue on a revision of return being a precondition clearly failed to take into consideration plenary powers which stood conferred upon Tribunal by virtue of section 254 – Held, yes – Whether once Tribunal had called upon Assessing Officer to examine issue afresh, said direction could not have been disregarded by reference to a Circular issue by CBDT – Held, yes
In Favor of: The Assessee.
