AI Structured Summary
Not yet generated for this judgment
Judgment
PER M. BALAGANESH, A. M.:
The appeal in ITA No.1951/Del/2025 for AY 2020-21, arises out of the order of the ld. National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘ld. NFAC’, in short] in Appeal No. ITBA/NFAC/S/250/2024-25/1072522379(1) dated 24.01.2025 against the order of assessment passed u/s 143(3) r.w.s. 144B of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.03.2023 by the Assessing Officer, Assessment Unit (hereinafter referred to as ‘ld. AO’).
The revenue vide Ground No. 2 had challenged the action of the Learned CITA in holding that the assessment framed by the Learned AO was beyond the period of limitation. The main crux of the ground of the revenue is that there was a reference made to Foreign Tax and Tax Research (FT & TR) division of CBDT for seeking certain information from Singapore tax authorities regarding the Assessee herein and that the Learned AO would get extended time for framing of assessment which fact has not been appreciated by the Learned CITA while quashing the assessment as barred by limitation. This goes to the root of the matter and hence, we deem it fit to address the same first.
We have heard the rival submissions and perused the materials available on record. The assessee is an individual and had furnished his return of income for the assessment year 2020-21 electronically on 8-1-2021 under section 139(1) of the Act declaring total income of Rs 5,41,98,020 and claiming carry forward of losses of Rs 1,14,76,791. The return was selected for complete scrutiny on various issues and one such issue flagged by the system was verification of Foreign Financial Interest of the Assessee. The Assessee is also a partner in the following firms:-
GROX (PAN - AAOFG6955C) and b) SS Medtech (PAN - ADXFS1381C).
During the year, the assessee has shown income from letting out his properties, capital gains and other sources. The assessment was completed by the Learned AO on under section 143(3) read with section 144B of the Act on 28-3-2023 determining total income at Rs 8,45,27,103 and allowing the long term capital loss to be carried forward at Rs 3,90,15,991 to subsequent years. The plea of the assessee is that this assessment framed on 28-3-2023 is barred by limitation as according to the Assessee, the due date for framing of assessment expired on 30-9-2022. The assessee raised a specific ground in this regard vide Ground No.1 before the Learned CITA. The Learned CITA noted that as per the provisions of section 153 of the Act which stipulates the time limit for completion of assessment, the time available to the Learned AO is 30-9-2022 for framing of assessment vide Circular No. 23/2022 dated 3-11-2022. The Learned CITA sought a report from the Learned AO to ascertain as to whether there was any typographical error in mentioning the date in the assessment order. No report was submitted by the Learned AO in this regard to the Learned CITA. The Learned CITA also noticed that the digital signature of the Learned AO in the assessment order is dated 28-3-2023 and accordingly concluded the completion of assessment order to be on 28-3-2023 which is barred by limitation and accordingly quashed the assessment.
The Learned DR before us placed on record the factual report obtained from the Learned AO dated 8-10-2025 , which contained the following documents:-
Request for technical assistance made by Assessment Unit to Technical Unit dated 24-9-2022
Letter written by Technical Unit to Joint Secretary, FT & TR –II dated 26-9-2022 seeking information from Singapore Tax Authorities in the case of Assessee herein. This letter is nothing but a proposal for seeking information and requesting Joint Secretary, FT & TR-II for necessary and urgent action in view of assessment getting time barred by 30-9-2022.
For the sake of convenience, the entire factual report of the Learned AO dated 8-10-2025 together with its Annexure containing the letters dated 24-9-2022 and 26-9-2022 referred in (a) and (b) above are reproduced below:-
OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-28(1), ROOM NO. 1001, 10th FLOOR, E-2 BLOCK, PRATYAKSH KAR BHAWAN, Dr. SRYAMA PRASAD MUKHERJEE CIVIC CENTRE, JAWAHARLAL NEHRU MARG, NEW DELHI-110002 F.No. ACTI/Cir-28(1)/2025-26/333 Dated: 08.10.2025 To, The Commissioner of Income Tax, (DR) ITAT, A Bench, New Delhi Sir, Sub: Requisition of factual report/documents in the case of Sh. Subodh Gupta, PAN- AAKPG5931G, in ITA 1951/Del/2025 for AY -2020-21-reg. Kindly refer the subject cited above, a mail dated 04.09.2025 from the CIT [DR][ITAT] received in this office seeking factual report on the following points:-Query: - Factual report is sought by the ITAT on the following grounds of appeal raised by the department during appellate proceeding before ITAT:-
"Whether on the facts and circumstances of the case, the Ld. CIT(A) was justified in holding that the assessment has been completed beyond the time limit without appreciating the fact that the time limit for completion of assessment is extended for the cases which are referred to FT & TR Division of CBDT for seeking information."
Reply:- In the instant case, a letter to the Joint Secretary, FT & TR-II was sent on 26/09/2022 for seeking the information under the provisions of tax treaties from Singapore. The time limit date for passing of assessment order in the said case expires on 30.09.2022. However, consequent to the EOI request, the limitation date may be extended appropriately under the income tax Act, 1961. Since, the case was referred to FT & TR for seeking information under the provisions of tax treaties, the time limit for completion of assessment is extended till the information so requested is received by the Commissioner or a period of one year, whichever is less.
"Further, it is important to note that extension of time for completing assessment is available when the reference is made by the Competent Authority [Joint Secretary (FT & TR)-I or II, as the case may be]. Sections 153 and 153B of Income Tax Act, 1961 provide that in computing the period of limitation, the period commencing from the date on which a reference for exchange of information is made by an authority competent under the agreements referred to in sections 90 or 90A (i.e. DTAA, TIEAs, Multilateral Convention) and ending with the date on which the information so requested is received by the Commissioner or a period of one year, whichever is less, shall be excluded, when the reference is made by the Assessing Officer."
In this case, the assessment order passed by the AO on 28.03.2023 which was within time limit provided in the Income Tax Act, 1961. Copy enclosed:-
(i)Copy of performa as "Appendix Form A" in which request for information under the provisions of tax treaties was sought on 24.09.2022.
(ii)Copy of the letter sent to FT & TR on 26.09.2022 for seeking information under the provision of tax treaties Yours faithfully, (Sukhendu Mondal) Asstt. Commissioner of Income Tax Circle 28(1), New Delhi
GOVERNMENT OF INDIA MINISTRY OF FINANCE INCOME TAX DEPARTMENT
PAN: AAKPG5913GAY: 2020-21DIN & Letter No: ITBA/AST/F/220/2022- 23/1045917742(1)Dated: 24/09/2022
Request for Technical Assistance (AU to TU) ✓
APPENDIX
FORM A ; REQUEST FOR INFORMATION UNDER THE PROVISIONS OF TAX TREATIES
PART I OF FORM A
Basic information 1 Taxpayer under investigation/examination in India Name Shri Subodh Gupta Full address B- 102 GULMOHAR PARK NEW DELHI DELHI 110049 PAN AAKPG5913G Current Jurisdiction ITO AU 5(3)(3)Kolkata, Station Asansol 2 Country /Jurisdiction to whom request is being made Signature 3 Contac details of the Assessing officer/ DDIT(investigation) /Transfer pricing officer Name and designation MANISH KUMAR SAH ITO AU 5(3)(3)Kolkata Station Asansol Address Room No- 316, AAYKAR BHAWAN, 116 VIVEKANAND SARANI NEAR ASANSOL PIN 713341 [email protected] Note:- The website address of the e-filing portal has been changed from www.incometaxindiaefiling.gov.in to www.incometax.gov.in.
Enclosed: Refer to attachment AAKPG5913G_2020_ATTACHMENT_100052512130.zip
Telephone and Fax 8777576689 4 CONTACT Details of Range head Name and designation Shri Arun Bhowmick, IRS JCIT AU-5(3) KOLKATA Address Room No- 2/8, Aaykar Bhawan (Annexe Building) P-13 Chowringhee Square, Kolkata -700069 [email protected] Telephone and Fax 8762301126 5 Contact details of Pr.CIT /Commissioner of Income- tax/Pr.DIT/DIT Concerned Name and designation SHRI SHANTANU DHAMIJA, IRS PCIT AU-5 KOLAKTA Address Room no- 2/9, Aaykar Bhawan (Annexe Building) P-13 Chowringhee Square, Kolkata -700069 [email protected] Telephone and Fax 9810088988 6 Name of the foreign taxpayer/holder of information if referred to in the request DBS Bank Singapore PART II OF FORM A
Request for information from :- Singapore 1 To DBS BANK LIMITED SINGAPORE 2 Form CBDT, NEW DELHI, INDIA 3 Contact person Name and designation
Address Telephone and Fax 4 Legal Basis ARTICLE OF DATA BETWEEN INDIA AND SINGAPORE 5 Reference numbers and realted matters Reference number Yes ( ) No ( * ) Initial request If no, Please provide reference number (s) and date(s) of any related request (s) Acknowledgment Yes ( ) No ( * ) Number of attachment to the request TWO Total number of pages for all the attachement 84 6 Urgency of reply Urgent reply is required due to Completion of assessment for the Assessment Year 2020-21 TB date 30.09.2022 Please check the box; Statute of information Suspected fraud Court cases Other reasons (Please specify) BANK ACCOUNT A/CNO 1130000000/- BANK DBS LIMITED SINGAPORE ADDRESS:- 12, Marina boulevard, Marina Bay Financial centre tower 3 Singapore ZIP CODE :- 18982
| 7 | Identity of the person(s) under examination or investigation : | SUBODH GUPTA, B- 102 GULMOHAR PARK NEW DELHI DELHI 110049, PAN:- AAKPG5913G |
| 8 | Request to refrain from notifying the taxpayer(s) | Please check the box ( * ) No ( ) Yes Reasons : If yes, the competent authority confirms that the requesting country would be able to refrain from notification in similar circumstance |
| 9 | Time period or taxable event for which or in relation to which the information sought | Financial Year 2019-20 related to the Assessment Year 2020-21 |
| 10 | Tax(es) to which the request relates: | INCOME TAX Government of INDIA |
| 11 | Tax purpose for which the information is requested | Please Check the box ( * ) Determination assessment and collection of taxes ( ) Recovery and enforcement of tax claims ( ) investigation or prosecution of tax matters ( ) others (Please Specify) |
| 12 | Relevant background | The case was selected for scrutiny under CASS for the Assessment Year 2020-21 and is under process |
| 13 | Information requested | BANK ACCOUNT STATEMENT AS PER SERIAL NO 15 |
| 14 | Ground for believing that the requested information is held in the requested jurisdiction or is within the possession of control of a person within the jurisdiction | Information provided by the assessee in the income tax return filed by him for the Assessment Year 2020-21 and reason for selection of the case. |
| 15 | Name and address of any person believed to be in possession of the information requested (to the extent known) | BRANCH HEAD DSB BANK LIMITED 65 - SINGAPORE BANK ACCOUNT TRANSACTION, A/C NO 1130000000/- AND SBI PRE BOND WITH THE SAME ADDRESS and same bank BANK DBS LIMITED SINGAPORE ADDRESS:- 12, Marina boulevard, Marina Bay Financial centre tower 3 Singapore ZIP CODE :- 18982. |
| 16 | Form, if any in which information is requested | For copies of documents what type of authentication, if any is requested – Signature of the bank authority and proper seal of the bank |
| Other form requirements, if any | ||
| 17 | Translation of reply requested | Please check the box { } yes { * } No |
| Language requested ; ENGLISH | ||
| 18 | In Making the request the requesting competent authority states that ; 1. All information received in relation to the request will be kept confidential and used only for the purposes permitted in the agreement with forms the basis for the request. 2. The request is in confirmity with the Indian laws and administrative practice and in further in conformity with the agreement on the basis of which it is made. 3. Such information would be obtainable under Indian laws and the normal course administrative practice in similar circumstance. 4. We have pursued all means available in our own territory to obtain the information except those that would give rise to disproportionate difficulties. | |
PRINCIPAL COMMISSIONER OF INCOME TAX
AU-5 KOLKATA
Encl:- The relevant documents and approval of PCIT AU- 5 kolkata is being attached for your kind perusal and necessary action .
Assessment Unit/Verification Unit/Technical Unit/Review Unit Income Tax Department
NOTE: To know the originator Unit of this Communication, kindly see the Digital Signature.
On perusal of the aforesaid documents, we find that even the letter dated 26-9-2022 written to the Joint Secretary , FT&TR-II is only a proposal for seeking information about the Assessee herein. There is no document placed on record by the revenue before us duly confirming the fact as to whether the proposal of the Technical Unit of Assessment had been accepted by the Joint Secretary, FT & TR-II and that any reference was indeed actually made by the Joint Secretary, FT & TR-II to Singapore Tax Authorities. Only if the actual reference is made by the Joint Secretary, FT & TR-II, the Learned AO would get extended time limit as per section 153 of the Act. For the sake of convenience, the relevant provisions of Explanation 1 to section 153 of the Act which provides for the period to be excluded are reproduced below:-
“For the purposes of this section, in computing the period of limitation –
(x)the period commencing from the date of which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the Principal Commissioner or Commissioner or a period of one year, whichever is less; Shall be excluded
Hence on perusal of the aforesaid provisions of Explanation 1 clause (x) to Section 153 of the Act, it is very clear that unless the reference is actually made for exchange of information to Singapore tax authorities by the competent authority , there cannot be any extension of time limit for framing of assessment to the Learned AO. If at all any reference was actually made to Singapore Tax Authorities by the FT & TR-II, then the same could have been placed on record by the Learned AO in his factual report. We find that the factual report of the Learned AO is even completely silent on the information , if any, received through exchange of information, pursuant to reference, if any, made to Singapore Tax Authorities and the date of receipt of such information, if any. Even if the information is not received from the Singapore Tax Authorities, the Learned AO should have waited for a period of one year as per the aforesaid provisions of Section 153 of the Act, which was not done by him as he had proceeded to complete the assessment on 28-3-2023.
In view of the above, we have no hesitation to conclude that no evidence has been placed on record by the revenue for having made any reference to Singapore Tax Authorities seeking information qua the Assessee herein and hence the assessment for the Assessment Year should have been framed latest by 30-9-2022 and since the assessment is framed on 28-3-2023, the same has been rightly treated by the Learned CITA as barred by limitation. Accordingly, the Ground No.2 raised by the revenue is dismissed.
Since the entire assessment is quashed, the adjudication of Ground No.1 raised by the revenue on merits of addition become academic in nature.
In the result, the appeal of the revenue is dismissed.