Case Law Details
Danone Asia Pte Limited Vs ACIT (ITAT Delhi)
ITAT Delhi held that as per CBDT Instruction nos. 20/2015 and 5/2016 read with DGIT(Vigilance) letter dated 30th November, 2017 before venturing into other issues outside the scope of limited scrutiny, the Assessing Officer should have taken prior approval of PCIT/CIT. Failure of prior approval would render the assessment order bad in law.
Facts- In course of assessment proceedings, the assessing officer while verifying the audit report furnished by the assessee in Form 3CEB noticed that in the year under consideration, the assessee had entered into various international transactions with its associated enterprises in India
Accordingly, AO was of the view that the training charges of Rs. 16,20,992 received by the assessee, being in the nature of Fee for Technical Services (FTS) is taxable in India. While coming to such conclusion, the assessing officer observed that the fee for training services will also come within the ambit of FTS as defined under Article 12 of the India-Singapore Double Taxation Avoidance Agreement (DTAA).
Conclusion- Held that AO exceeding his jurisdiction has ventured into recheracterizing the nature and character of a particular item of income, which in our view, is beyond the scope of limited scrutiny. This is so because, in terms of CBDT Instruction nos. 20/20 15 and 5/2016 read with DGIT(Vigilance) letter dated 30th November, 2017 before venturing into other issues outside the scope of limited scrutiny, the Assessing Officer should have taken prior approval of PCIT/CIT.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
Author Bio
