Case Law Details
Mavenir UK Holdings Vs ACIT (ITAT Delhi)
The Delhi High Court recently delivered a crucial verdict in the case of Mavenir UK Holdings vs. ACIT (Income Tax Appellate Tribunal, Delhi). The appeal was filed by the assessee against the order dated 27.12.2022, passed by the Assessing Officer (AO) under Section 147 read with Section 144 of the Income Tax Act, 1961.
Grounds of Appeal: The assessee raised various grounds of appeal, challenging the validity and legality of the assessment order. Some of the key grounds included objections related to the assessment order’s timeliness, the alleged existence of a Permanent Establishment (PE) in India, and the taxation of receipts from the sale of software license and support services. The appellant also contested the attribution of 80% of receipts from India to the alleged PE and disputed the addition of business income during the relevant year.
Timeliness of Assessment Order: One critical aspect of the appeal revolved around the timeline for passing the assessment order as per Section 144C(4) of the Income Tax Act. According to the provisions, the AO is required to pass the assessment order within one month from the end of the month in which either the acceptance is received from the assessee or the period for filing objections under sub-section (2) expires.
In this case, the draft assessment order was passed on 04.03.2022, and the assessee filed objections before the Dispute Resolution Panel (DRP) on 06.04.2022, which was after the due date. The due date for passing the final assessment order was 31.05.2022. The AO, however, passed the final assessment order on 27.12.2022, beyond the prescribed timeline.
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