Sanjay Jain Vs DCIT (ITAT Delhi)
Exchange of information clause under India–Hong Kong DTAA not retrospective – Assessments beyond limitation quashed by Delhi ITAT
Assessee challenged the validity of assessments completed u/s153A r.w.s. 144 on the ground that they were barred by limitation. AO had claimed an extended limitation based on a reference made to Hong Kong under a tax treaty (DTAA).
A search was conducted on Assessee on 28.02.2017. Assessments for AYs 2011–12 to 2017–18 were completed on 24.12.2019. The normal time limit u/s153B expired on 31.12.2018. AO claimed an extension of one year citing a reference made to the Hong Kong tax authorities on 04.12.2018 under the exchange of information clause of the India–Hong Kong DTAA. Assessee argued that such extension was invalid as the DTAA came into effect only from 30.11.2018, & information requests for pre-effective-date years (pre-FY 2019–20) are not permissible.
Assessee, inter alia, took the ground that CIT(A) erred in law while upholding the assessment framed by AO u/s 153A r.w.s. 144 on 24.12.2019 for search conducted us 132 on 28.02.2017 on the basis of FT&TR reference to Hongkong on 04.12.2018 for seeking information as the reference in bad in law. As such, the assessment order is passed beyond the period of limitation as prescribed u/s 153B.
