Banyan Real Estate Fund Mauritius Vs ACIT Circle International Tax & Anr. (Delhi High Court)
Delhi High Court held that initiation of reassessment based on entirely new or previously undisclosed material or reasoning deprives assessee’s right to effectively object the proposed reassessment action. Accordingly, the impugned action is rendered wholly unsustainable.
Facts- The writ petitioner impugns the validity of the reassessment action which has come to be initiated pursuant to the notice dated 27 April 2023 under Section 148 of the Income Tax Act, 1961 and pertaining to Assessment Year 2016-17. The proceedings for reassessment commenced in terms of a notice dated 24 March 2023 purporting to be under Section 148A(b) of the Income Tax Act.
Notably, the sale of shares which had given rise to capital gains was questioned by the AO taking the view that the petitioner in AY 2014-15 had been denied benefits of the DTAA. It is pertinent to note that the respondents had for AY 201415 and while passing an order under Section 148A(d) of the Act doubted whether the assessee could claim benefits of the DTAA. It is the view expressed in those proceedings that appears to have weighed upon the respondents to sustain the proposed reassessment notwithstanding the original notice being premised on “remittances” to non-resident or foreign companies.
