PCIT Vs Smt. Senh Lata Sawhney (Delhi High Court)
Delhi High Court held that the benefit of exclusion of time by virtue of Explanation (ix) of Section 153B of the Income Tax Act cannot be available here as reference made for information under Indo-Swiss DTAA was invalid. Accordingly, questions to law as framed are answered against the Revenue.
Facts- The question of law involved herein is whether the Income Tax Appellate Tribunal is correct in quashing the assessment order as barred by limitation without going into merits of the case and whether the ITAT is correct in not allowing extension of the time barring date, when a valid reference was sent by competent authority to Swiss authorities as per the provisions of the Income Tax Act, 1961 and DTAA between India and Switzerland and holding the assessment order as being time barred.
Conclusion- Held that on a plain reading of Clause (ix) of the Explanation to Section 153B of the Act, the exclusion of time taken for obtaining the information (or one year) for completion of the assessment under Section 153A of the Act is applicable only if a reference for exchange of information has to be made as per the Agreement under Section 90/90A of the Act. It is necessary that reference be made in terms of the agreement. In this case, the benefit of exclusion of time by virtue of Explanation (ix) of Section 153B of the Act would, thus, be available only if the reference was made in terms of Indo-Swiss DTAA. However, as noted above, the request as made was not in terms of the Indo-Swiss DTAA. It was contrary to the limitations as expressly specified under Article 14 of the Amending Protocol. Thus, the questions to law as framed are answered against the Revenue and in the negative; that is, against the Revenue and in favour of the Assesses.
