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| The Tax Publishers2022 TaxPub(DT) 6487 (Del-Trib) INCOME TAX ACT, 1961
Section 144C
Only recharacterized the income and income which was shown as royalty income by assessee was taxed as 'business income' by AO without there being any variation in income returned by assessee. Therefore, AO wrongly assumed jurisdiction under section 144C when there was no variation in the income returned by assessee.
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Assessment - Validity - AO assumed jurisdiction under section 144C without there being variation to the income returned by assessee -
Assessee challenged jurisdiction assumed by AO by issuing draft assessment order pleading that there was no variation in the income returned by assessee. Held: As per section 144C and section 92B where assessee had entered into international transactions or it is a foreign company being an eligible assessee as defined in section 144C in respect of his income/loss, AO has made variation which is prejudicial to the interest of such assessee, the AO is mandatorily required to pass proposed order of assessment, which is termed as 'Draft Assessment Order'. In the instant case, AO only recharacterized the income and income which was shown as royalty income by assessee was taxed as 'business income' by AO without there being any variation in income returned by assessee. Therefore, AO wrongly assumed jurisdiction under section 144C when there was no variation in the income returned by assessee.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. :
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