Extension! Extension! Extension!

• CBDT further extends the date for filing of declarations under the VivadSeVishwas Act, 2020 to 31st March, 2021.Notification no. 09/2021 in S.O. 964(E) dated 26/02/2021 issued. Date for payment without additional amount under VSV extended to 30th April, 2021.

• Vide Notification date 27^th Feb 2021 by the CBDT, the following extension in relevant cases:

1. for imposition of penalty under Chapter XXI of the Income-tax Act, —(i) the 29th day of June, 2021 shall be the end date of the period during which the time limit specified in or prescribed or notified under the Income-tax Act falls, for the completion of such action; and
2. for assessment or reassessment under the Income-tax Act, and the time limit for completion of such action under section 153 or section 153B thereof,

• (i) expires on the 31st day of March, 2021 due to its extension by the said notification, such time limit shall stand extended to the 30th day of April, 2021.
• (ii) Is not covered under (i) and expires on 31st day of March, 2021, such time limit shall stand extended to the 30th day of September, 2021.

  Important Judicial Precedents

• PCIT (Central) – 3 vs. Anand Kumar Jain (HUF) (Delhi High Court)
  S. 153A, 153C search assessments: (i) A statement recorded u/s 132(4) has evidentiary value but cannot justify the additions in the absence of corroborative material. (ii) The statement also cannot, on a standalone basis, constitute ‘incriminating material’ so as to empower the AO to frame a block assessment u/s 153A (iii) If the statement was recorded in the course of search conducted in the case of a third party, and assuming the statement is construed as ‘incriminating material belonging to or pertaining to a person other than person searched’, the only legal recourse available to the department is to proceed in terms of S. 153C of the Act by handing over the same to the AO who has jurisdiction over such person. An assessment framed u/s 153A on the basis of alleged incriminating material (being the statement recorded under 132(4) of the Act) is not valid. The assesse also had no opportunity to cross-examine the said witness.

• Engineering Analysis Centre Of Excellence Private Limited vs. CIT (Supreme Court)
  Taxability of sums received for supply of software as “royalty”: Given the definition of royalties contained in Article 12 of the DTAAs, the amounts paid by resident Indian end-users/ distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/ distribution agreements is not the payment of royalty for the use of copyright in the computer software and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in section 195 of the Income Tax Act were not liable to deduct any TDS under section 195 of the Income Tax Act. The provisions contained in the Income Tax Act (section 9(1)(vi), along with explanations 2 and 4 thereof), which deal with royalty, not being more beneficial to the assesses, have no application in the facts of these cases.

• Prime Infoinvest Ltd Versus Income Tax Officer Ward-16 (2) Hyderabad[2021 (2) TMI 1054 – ITAT Hyderabad]
  Deemed dividend addition u/s 2(22)(e) – company had accumulated profits as on 31.3.2013 and the assessee is a substantial shareholder i.e. 15.13% of M/s. Tejdeep Engg Enterprises (P) Ltd.- assessee has shown the transaction as an unsecured loan in its books of account – HELD THAT:- We find that the assessee has entered into a ‘share purchase agreement’ with M/s. Tejdeep Engg. The assessee has stated that subsequently, the transaction was completed and the shares were also transferred to Tejdeep Engg. Enterprises Ltd. Therefore, we deem it fit and proper to direct the AO to verify this contention of the assessee and if the contention of the assessee is found to be correct, then the addition u/s 2(22)(e) cannot be made. Therefore, the appeal of the assessee is treated as allowed for statistical purposes.

• Chetan Rajnikant Shah Versus Income Tax Officer-24 (1) -4, Mumbai [2021 (2) TMI 1053 – ITAT Mumbai]
  Reopening of assessment u/s 147 – Addition u/s 68 – HELD THAT:-  A.O had failed to independently apply his mind to the ‘material’ available on his record and mechanically acting on the information supplied by the Directorate of Income-tax (Inv.) had reopened the case of the assesse u/s 147 of the Act, the same, thus, cannot be sustained and is liable to be vacated, Accordingly, in the absence of valid assumption of jurisdiction by the A.O u/s 147 of the Act, the consequential assessment framed by him u/s 143(3) r.w.s 147, dated 29.03.2015 cannot be sustained and is quashed. Appeal of the assesse is allowed.