ACIT-4(1)(1), MUMBAI, MUMBAI V. CITIGROUP GLOBAL MARKETS INDIA PVT. LTD. , MUMBAI

ITA 7871/MUM/2025

AI Insights

The case involves an appeal by the Assistant Commissioner of Income Tax against Citigroup Global Markets India Pvt. Ltd. concerning a transfer pricing adjustment and the validity of the Transfer Pricing Officer's order. The CIT(A) had earlier deleted the transfer pricing adjustment, citing the order as time-barred. However, the Tribunal found that the order was within the time limit as per the amended Section 92CA of the Income-tax Act, 1961, effective from June 1, 2007. The Tribunal also addressed the assessee's claim for a concessional rate of DDT under the India-USA DTAA, which was not admitted due to the lack of necessary documentation and facts on record.

• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Mumbai
• Assessment Year: 2016-2017
• Appeal Filed On: 26-11-2025
• Other Referred Cases: Pfizer Healthcare India Pvt. Ltd. vs JCIT, Zydus Wellness Products Ltd. vs CIT, M/s Colorcon Asia Pvt. Ltd. vs Joint Commissioner of Income Tax & Ors., National Thermal Power Company Limited vs Commissioner of Income Tax, Ahmedabad Electricity Company Ltd vs CIT, M/s Ultratech Cement Ltd. vs The Additional Commissioner of Income Tax
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHAGIRATH RAMAWAT
• Assessee Lawyers: ANISH THACKER
• Keywords: Set aside; Capital asset; Revenue expenditure; Transfer pricing; International transaction; Question of law; Tax effect; Period of limitation; Capital expenditure; Double taxation relief; Residential status
• Section: 143(3); 90

Judgement Text

"1 IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “K” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No. 7871/MUM/2025 (AY:2016-17) Asst. Commissioner of Income Tax, Circle-4(1)(1), Room No.642, 6th Floor, Aayakar Bhavan, M.K. Road, Mumbai 400020. vs. Citigroup Global Markets India Pvt. Ltd., 1202, 12th Floor, FIFC, C-54 & C-55, G- Block Bandra Kurla Complex, Bandra, Vidyanagari, MUMBAI 400098. PAN/GIR No: AAECS7234F (Appellant) (Respondent) CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd., 1202, 12th Floor, FIFC, C-54 & C- 55, G-Block Bandra Kurla Complex, Bandra, Vidyanagari, MUMBAI 400098. vs. Asst. Commissioner of Income Tax, Circle-4(1)(1), Room No.642, 6th Floor, Aayakar Bhavan, M.K. Road, Mumbai 400020. PAN/GIR No: AAECS7234F (Appellant) (Respondent) Assessee by Shri Anish Thacker Revenue by Shri Bhagirath Ramawat (SR DR) Date of Hearing 10.02.2026 Date of Pronouncement 27.03.2026 O R D E R PER BIJYANANDA PRUSETH, AM: This appeal filed by the revenue and the cross objection of the appellant emanate from the order passed u/s 250 of the Income-tax Act, 1961 (in short,, ‘Act’) by the Commissioner of Income-Tax (Appeals) 55, Mumbai [in short,, ‘CIT(A)’], dated 26.09.2025 for the assessment year (AY) 2016-17. Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 2 2. The grounds of appeal raised by the revenue are as under: “1. Order of the CIT(A) is erroneous in law and on facts: On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals)-9, Mumbai, erred in deleting the addition of Rs.10,77,31,990/ made by the Assessing Officer on account of transfer pricing adjustment without appreciating the facts and legal position of the case. 2. Error in holding TPO's order as time-barred: On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in holding that the Transfer Pricing Officer's order passed u/s. 92CA(3) of the Income Tax Act, 1961, was barred by limitation merely because it was digitally signed on 01.11.2019, even though the order was finalized and dated 31.10.2019, being within the prescribed time limit u/s 92CA/3A) read with section 153 of the Act. 3. Failure to appreciate procedural nature of digital signature: The Ld. CIT(A) failed to appreciate that the act of digitally signing the order is a procedural formality in compliance with the e assessment framework under the Income-tax Rules, and that such procedural delay cannot render an otherwise vahdly passed order as time-barred in view of section 2928 of the Act. 4. Incorrect reliance on judicial precedents: The Id. CIT(A) erred in relying upon the decision of the Hon'ble Madras High Court in the case of Pfizer Healthcare India Pvt. Ltd. and the ITAT, Mumbai decision in Zydus Wellness Products Ltd, without appreciating that- (i)The SLP against the Pfizer Healthcare judgment was dismissed by the Hon'ble Supreme Court on account of low tax effect and not on merits, and hence, the issue remains open, (ii) The Department has already preferred appeals before the Hon'ble High Court in similar cases, including Zydus Wellness Products Ltd., which are pending adjudication, making the issue sub judice. 5. Failure to adjudicate on merits of TP adjustment: The Ld. CIT(A) erred in law in deleting the entire transfer pricing adjustment without examining or adjudicating the merits of the underlying comparability analysis arid pricing determination carried out by the TPO.” 3. In the Cross Objections, the following grounds were raised by the assessee- Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 3 “1. The learned AO be directed to levy Dividend Distribution Tax (DDT) at the rate of 15% as per Article 10 of the India-USA Double Taxation Avoidance Agreement in respect of the dividend paid by the Respondent to its shareholders (viz., Seven Worlds Holdings, Citigroup Financial Products Inc. and Citigroup Global Markets Pacific Holding Company Inc.) for the year under consideration and refund the balance amount of DDT (viz., Rs. 7,75,00,718) paid by the Respondent. 2. The learned CIT(A) erred in not adjudicating ground No 3 (containing sub ground 3.1 to 3.5) on merits of the transfer pricing addition of Rs.10,77,31,990 made by the ld. TPO on research support services provided by CGMIPL to its Associated Enterprise.” 4. The facts of the case in brief, are that the assessee is the investment banking and equity broking arm of Citigroup in India. It is engaged in providing broking services in the equities and derivatives segment to its Associated Enterprises (AEs). Further, it also renders support services to its AEs in respect of research and investment banking activities. For the year under consideration, certain international transactions were disclosed by the assessee in the 3CEB Report filed for the year. The AO referred the case to the Transfer Pricing Officer (in short, ‘TPO’) for computation of the Arm’s Length Price (in short, ‘ALP’) in relation to the disclosed international transactions. Consequently, the TPO passed an order u/s 92CA (3) of the Act dated 31.10.2019, which was, however, digitally signed on 01.11.2019, making an upward adjustment of Rs.10,77,31,990/-. The assessment u/s 143(3) r.w.s. 144C (3) of the Act was completed by the AO vide order dated 11.02.2020, after making certain additions/disallowances. The Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 4 adjustment made by the TPO was in respect of the international transaction of provision of the Research Support Services, provided by the assessee to its AEs. 5. Against the order of AO, the assessee preferred an appeal before CIT(A) and in the said appeal, inter alia other technical grounds and grounds on merit, the assessee also challenged the validity of the order of TPO u/s 92CA of the Act for being time barred and bad in law. In ground No. 2, as raised before CIT(A), it was argued on behalf of the assessee, in reference to Section 92CA(3A) of the Act, that the time limit for passing the TPO’s Order u/s 92CA(3) of the Act would be at any time before sixty days prior to the date on which the period of limitation referred to in section 153 of the Act, and as applicable in the case, expires. It was argued that the in light of the above the limitation, date for passing the order u/s 92CA(3) of the Act, would be 31st October when the limitation date for order u/s 143(3) of the Act is 31st December. Further, that the order u/s 92CA(3), dated 31.10.2019, digitally signed and issued on 01.11.2019, was effectively passed by TPO on 1.11.2019, and was, thus, time barred by one day and bad in law. 6. The Ld. CIT(A) agreed with the assessee that the due date for passing the TPO order u/s 92CA(3) of the Act was 31.10.2019 and the date of the order of TPO was 01.11.2019. Ld. CIT(A) relied on the order of the Coordinate Bench in case of Zydus Wellness Products Limited in ITA No. 1488/Mum/2021 to hold that the date of digital signature may be taken as date of document. The CIT(A) pointed to the observation of the Bench therein holding that provisions of section 282A of the Act r.w.r. 127A of the Income Tax Rules, require that notices and other documents be signed before issuance. A reference was also made to the observation that Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 5 CBDT Instruction 1/2018 dated 12.02.2018 requires all orders/notices/communications issued to the assessee through e-proceedings to be digitally signed by AO. The reference to the judgment of Hon’ble Madras High Court in case of Pfizer Healthcare Ltd. vs JCIT 433 ITR 28 (Madras), was also quoted, wherein it was held that the 60 days’ period is to be computed after excluding 31st December. The observations of the Hon’ble High Court in the quoted part (page 69 of CIT(A)’s order) were to the effect that after excluding 31.12.2019 (i.e. the date of limitation for order u/s 143(3) of the Act), the period of 60 days would expire on 01.11.2019 and the TPO order must have been passed on 31.10.2019 or any date prior thereto. On page 70 of his order, the CIT(A) referred to the note at bottom of page 1 of TPO’s order which read that the date of the digital signature may be considered as date of the document. Accordingly, relying on the judgment of Hon’ble Madras High Court in case of Pfizer Healthcare Limited (supra) and that of the Coordinate Bench in case Zydus Healthcare (supra) the order of TPO was held to be time barred by one day and the adjustment made was deleted. In para 7.4 of the appellate order, the CIT(A) observed that since the order of TPO has been held to be bad in law, the adjustments made thereto do not survive. The adjustments were deleted without going into merits of the same and without giving any findings on various related issues raised by the assessee in respect of the ground numbers 3.1 to 3.5. 6.1 Aggrieved by the order of ld. CIT(A), the revenue has filed the present appeal challenging the said order and the assessee cross objections that CIT(A) erred in not deciding the ground numbers 3.1 to 3.5 (before CIT(A)) on merits. Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 6 7. We have heard the submissions of Ld. AR of the assessee and Ld. DR of the Revenue. At the outset, it was suggested by ld. AR that in light of the amendment in section 92CA of the Act, as suggested in the Finance Bill, 2026, the dispute in any case will have to go back to CIT(A) for adjudication on merits. The relevant part from Clause 4 of Chapter III of the Finance Bill, 2026 is reproduced below- “4. In section 92CA of the Income-tax Act, 1961 (hereafter in this Part referred to as the Income-tax Act), after sub-section (3A), the following subsection shall be inserted and shall be deemed to have been inserted with effect from the 1st day of June, 2007, namely:–– “(3AA). Notwithstanding anything contained in any judgment, order or decree of any court, for the purposes of making order under sub-section (3), the calculation of sixty days shall be made and shall always be deemed to have been made in the following manner, namely:–– (a) where the period of limitation expires on 31st of March of any year (not being a leap year), the order under sub-section (3) may be made up to the 30th of January of that year; (b) where the period of limitation expires on 31st of March of any year (being a leap year), the order under sub-section (3) may be made up to the 31st of January of that year; (c) where the period of limitation expires on 31st of December of any year, the order under sub-section (3) may be made up to the 1st of November of that year.” 8. The clause (c) of the proposed sub-section (3AA) of Section 92CA, as per the above amendment, clarifies that in cases where the period of limitation expires on 31st December, the order u/s 92CA(3) can be made up to the 1st November of that year. In the given case, the order u/s 92CA(3) was passed on 1st November of that year, as referred, and accordingly, the same is within the time Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 7 limit allowed. The same has been pointed out by ld. AR and since no arguments against the applicability of the foresaid amendment has been made, the ground numbers 1 to 4 of the Revenue’s appeal are allowed. 8.1 Further, on a perusal of the grounds of appeal and the Cross Objections, it appears that both revenue and assessee are aggrieved by non-consideration of the dispute on merits by ld. CIT(A). Since the dispute has not been decided by ld. CIT(A) on merits, we set aside the order of ld. CIT(A), only to the extent of the adjustment of Rs.10,77,31,990/- made in respect of the ALP of the international transaction of provision of the Research Support Services and remand the matter back to the file of CIT(A) for adjudication on merits. We direct the CIT(A) accordingly. Accordingly, the ground No. 5 of revenue’s appeal and ground No.2 assessee’s Cross Objections are treated as partly allowed. Ground No. 1 in assessee’s Cross Objections-applicability of DTAA on Dividend Distribution Tax- 9. It has been prayed on behalf of the assessee that the ld. AO be directed to levy Dividend Distribution Tax (in short, ‘DDT’) at the rate of 15% as per Article 10 of the India-USA Double Taxation Avoidance Agreement (in short, ‘DTAA’) in respect of the dividend paid by the assessee to its shareholders (viz., Seven Worlds Holdings, Citigroup Financial Products Inc. and Citigroup Global Markets Pacific Holding Company Inc.) for the year under consideration and refund the balance amount of DDT (viz., Rs.7,75,00,718) paid by the assessee. Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 8 10. Ld. AR of the assessee referred to the judgment of Hon’ble High Court of Bombay at Goa in case of M/s Colorcon Asia Pvt. Ltd. vs. Joint Commissioner of Income Tax & Ors. in Tax Appeal No. 5 of 2024 dated 28.11.2025, wherein it was held that the nature of income is the apropos element to invoke relevant Article of the DTAA applicable on the case, and not the person who is subjected to the tax. The relevant part from para 60 of the order of Hon’ble High Court is reproduced below- “60…… The BFAR erred in holding the respondent’s submission by merely following the special bench’s ruling stating that in order to invoke Article 11, the shareholder has to be taxed in India on the dividend earned from India. On a plain reading of the said Article, it is evident that the person on whom the tax on dividend is levied is an irrelevant and extraneous consideration for its application. There is nothing in the Article which suggests that the income has to be taxed in India in the hands of the shareholders. It merely deals with the nature of income, viz. dividend, which cannot be taxed in India at a rate exceeding 10%, if other stipulated conditions are met. The nature of income is a apropos element to invoke the said Article, and not the person who is subjected to tax, in whose hands the tax is levied, is not relevant for application of Article 11, as DDT is a ‘tax on dividend income of the shareholder’. The entire legislative history of Section 115-O corroborates this. More importantly, the Apex Court in the case of Tata Tea (supra) too has confirmed the nature of income being dividend income, which is subject to DDT and u/s 115-O the dividend income is sought to be taxed at a rate of 20.36%. Section 90(2) of the Act of 1961 allow the appellant to apply the lower rate under the DTAA and Article 11(2) restrict tax rate of such dividend income to 10% and there is no embargo in Article 11 of the DTAA on the Appellant to apply the lower tax rate stipulated in Article 11(2).” Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 9 Accordingly, it was argued that the assessee is eligible for the concessional rate of taxation in respect of the DDT as per Article 10 of India- US DTAA and the excess tax paid should be refunded. 11. The Ld. DR, on the other hand, pointed out that this ground was not raised before the AO or the CIT(A) and has been raised in current proceedings for the first time. Ld. DR referred to the judgment of Hon’ble Supreme Court in case of National Thermal Power Company Limited vs. Commissioner of Income Tax in (1998) 229 ITR 383 (SC) (in short, ‘NTPC’) and argued that an additional ground can be raised only if it is purely a question of law that arises from facts as found by authorities below. The ld. DR then drew our attention to section 90 of the Act and submitted that sub-section (4) of section 90 of the Act mandates that a certificate of tax residency in any country outside India has to be obtained for claim of relief u/s 90 of the Act. The Ld. DR further pointed to sub-section (5) of the same section and Rule 21AB of the Income Tax Rules, to point out that filing of form 10F is mandatory for claim of relief from double taxation u/s 90 of the Act as per applicable DTAA. It was argued that Form 10F is mandated to have the following facts in respect of the non-resident claiming the relief under applicable DTAA as per Section 90 of the Act: i. Status (individual, company, firm, etc.) of the assessee; ii. Nationality (in case of an individual) or country or specified territory of incorporation or registration (in case of others); iii. Assessee's tax identification number in the country or specified territory of residence and in case there is no such number, then, a unique number on the basis of which the person is identified by the Government of the Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 10 country or the specified territory of which the assessee claims to be a resident; iv. Period for which the residential status, as mentioned in the certificate referred to in sub-section (4) of section 90 or sub-section (4) of section 90A, is applicable; and v. Address of the assessee in the country or specified territory outside India, during the period for which the certificate, as mentioned in (iv) above, is applicable. 12. It was argued that as per Section 90 of the Act r.w.r. 21AB of the Income- tax Rules, in order to decide eligibility of the non-resident shareholders who received the dividend, for relief under India-US DTAA, not only a Tax Residency Certificate must be there on record, the above facts also must be there on record, as mandated by law. It was prayed that since these facts are not there on record, the additional ground raised by the assessee cannot be decided on the facts already uncovered by lower authorities and following the judgment of Hon’ble Supreme Court in NTPC (supra), the ground may not be admitted. 13. In rebuttal, ld. AR pointed to the income-tax return (ITR) of the assessee and our attention was drawn to Clause ‘F’ on page 2 of the return which was titled ‘Shareholders Information’. In the said clause ‘F’, the following details were mentioned in respect of assessee’s shareholders, who by implication would be the non-resident entities eligible for relief under relevant provisions of the DTAA (if assessee’s claim is allowed);- Name, PAN, Address, Pin code and percentage shareholding were mentioned. It was argued by ld. AR that the ground raised is a purely legal ground and all the facts needed to decide the ground are already there on record. Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 11 13.1 In reply, it was pointed out by ld. DR that the PAN in respect of all the shareholders was same i.e. ‘AAAAA9999A’ and clearly is an invalid PAN. It was pointed out that what is mandated is the Tax Identification Number in the country of residence and not the Indian PAN. It was further pointed out that the concept of PAN is not there in New York and it is not a Tax Identification Number used by US tax authorities. It was also pointed out that the facts like status, nationality, period of residence and complete postal address are not there on record. Accordingly, it was prayed that the additional ground raised on behalf of the assessee may not be admitted. 14. We have heard both parties and perused the materials on record. We have also deliberated in the decision relied upon by the Ld. DR and relevant provisions of the Act. It is not in dispute that this ground was not raised before lower authorities and, hence, it is an additional ground raised in current appeal for the first time. The argument of ld. DR is directed against allowing the admission of the ground for adjudication and accordingly, the question of admission of the additional ground is being taken up first. The law in respect of the admission of an additional ground has been decided by Hon’ble Supreme Court in NTPC (supra) and it is a settled position that only purely legal questions can be admitted as additional grounds and that too if such a question arises out of the facts on record before the lower authorities. In the given case, the relief under DTAA is to be provided as per section 90 of the Act and the same section, as read with relevant rules, mandates that certain facts be brought on record, through filing of a Tax Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 12 Residency Certificate or Form 10F for an assessee to claim relief under applicable DTAA. Since form 10F has not been filed in the case; these facts, mandatory for claim of relief u/s 90 of the Act or to decide the claim of eligibility under the same section, are apparently not there on record. 15. In this regard, the reliance is placed on the decision of Hon’ble Bombay High Court in case of M/s Ultratech Cement Ltd. vs The Additional Commissioner of Income Tax in ITA No. 1060 of 2014. The facts before Hon’ble High Court in this case were that the assessee raised an additional ground claiming deduction u/s 80IA of the Act for the first time before Tribunal. It was argued by the assessee that such a deduction had been allowed in subsequent A.Y. when such claim was allowed for the first time, hence the facts needed to decide the ground were there on record. The observations of Hon’ble High Court from para 12 are reproduced below- “12] We note that it is an undisputed position before us that for the subject assessment year, the appellant assessee had not claimed benefit of Section 80IA of the Act in respect of its Jetty/Port either before the Assessing Officer or before the CIT(A). A claim for benefit u/s 80IA of the Act can only be made if the infrastructure facility such as Jetty/Port is, among other things, being run on the basis of an agreement for either developing or operating and maintaining or developing, operating and maintaining a new infrastructure facility. The sine qua non provided in Sub-Section (7) of Section 80IA of the Act is the furnishing along with its return of Income, a report of the Audited Accounts in Form 10CCB as required under Rule 18BBB(3) of the Act. The Form 10CCB which is required to be filed along with Return of Income has various details to be Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 13 filled in, including initial assessment year from which the deduction is being claimed, the nature of the activity carried out with regard to the infrastructure facility, namely whether it is for developing or developing and operating or for developing, operating and maintaining the new infrastructure facility. It is only on examination of those details as submitted by the auditor in Form 10CCB that the claim of deduction can be considered. It is undisputed that for the subject assessment year, no form 10CCB has been filed by the appellant assessee. Therefore, there is no evidence on record for the subject assessment year to allow the claim. The submission of Mr. Agrawal for the appellant that primary evidence in the form of jetty is on record is not acceptable. Mere ownership or existence of jetty is not evidence of eligibility to the benefit of section 80IA of the Act, which is admittedly conditional upon satisfaction of certain requirements as provided therein.” 16. Hon’ble High Court has observed that when the requisite forms as mandated by the applicable provisions of the Act read with applicable rules are not on record, the essential evidence to examine the veracity of the claim of deduction is not there on record. The Hon’ble High Court rejected assessee’s argument that in subsequent years, when benefit of section 80IA was granted, the evidence in the form of 10CCB was available, on the ground that the same was not available for the year under consideration. Hon’ble Court observed further in para 14- “14] Therefore, we do not agree with the contention of Mr. Agarwal that once benefit u/s 80IA of the Act has been granted to the appellant assessee's jetty / port it must ipso facto follow that for the earlier years also the benefit must be granted on the mere say of the assessee that there is no change in the facts and circumstances of the case. Admittedly, for the subject assessment year, there is no claim made for the benefit of deduction u/s 80IA of the Act before the lower authorities and the Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 14 evidence of an Auditor as required by law in Form 10CCB of the Rules for eligibility of deduction u/s 80IA of the Act is not on record. This would be the evidence which would be subject to enquiry/examination by the Assessing Officer and/or the C.I.T. (A) before allowing the deduction claimed. This is a factual enquiry to be done at the time of assessment before the claim can be allowed. Thus the view of the Tribunal that the new ground urged could not be allowed to be raised as the same is dependent upon leading of evidence and verification of the same by the Authority before the claim u/s 80IA of the Act can be allowed, cannot be faulted.” 17. Hon’ble High Court clearly observed that when a new ground is dependent upon leading of evidence and verification of the same by the authorities before the claim can be accepted, it cannot be allowed. In the given case also, Form 10F, as mandated by Section 90 of the Act r.w.r. 21AB is not available on records. The Form 10F has to provide certain facts and also mandates that a Certificate referred to in sub-section (4) of Section 90 of the Act must be obtained from Government of the country which is party to the DTAA. The assessee’ claim of eligibility u/s 90 of the Act can only be allowed if such facts have been verified and found acceptable by AO. In absence of such a Certificate and Form 10F, the observations of Hon’ble High Court would be squarely applicable to the facts of the case. 18. In para 15 Hon’ble High Court noted further- “15] Mr. Agarwal then contended that once the additional ground is allowed, he would lead evidence in support. This submission seeks to unsettle the settled position as laid down in NTPC Ltd. (supra) that additional ground can be urged before the appellate authorities provided the evidence is on record. If the submission of Mr. Agarwal is accepted, that a new ground along with fresh Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 15 evidence can be urged before the appellate authorities, even if not raised earlier without anything more (such as decision of Court or valid reasons for not raising the claim earlier) would unsettle the settled law. Accepting above submission would lead to great uncertainty and fall foul of one of the basic tenets of good tax administration i.e. finality to assessments.” 19. Hon’ble Court has clarified in unequivocal terms that leading of evidence before Tribunal in respect of a completely new ground is against the settled position of law and is against the basic tenet of the good tax administration i.e. finality to assessments. 20. In the proceedings before Hon’ble High Court, an argument was also raised that raising of the additional ground is not prohibited when the ground so raised could not have been raised before the AO or the ground now becomes available in view of changed circumstances such as decision of a court allowing a particular deduction. In support of his claim before Hon’ble High Court, the assessee relied on the full bench judgment of Hon’ble Bombay High Court in case of Ahmedabad Electricity Company Ltd vs CIT (199 ITR 351). While discussing the said judgment, Hon’ble Court observed that the Full Bench held that the parties are allowed to raise additional grounds before the Tribunal so long as they arise from the subject matter of the proceedings and not necessarily from the subject matter raised in the memo of appeal. In this respect a perusal of the order of Hon’ble High Court in case of Ahmedabad Electricity Company Ltd. (supra) revealed that the dispute therein was in respect of an additional ground that could not have been raised Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 16 before lower authorities. The brief facts in case of Ahmedabad Electricity Company Ltd. (supra) were that in respect of the AY 1962-63, an expenditure incurred for construction of a shed and a temporary structure was claimed as a revenue expenditure. The same was disallowed in assessment proceedings for being a capital expenditure. The Tribunal disallowed assessee’s appeal holding the asset to be a capital asset. In the subsequent year, the asset was destroyed by a cyclone and the assessee could not claim the deduction u/s 32(1)(iii) because the asset had been claimed as a revenue expenditure. Thus, the question of claiming a deduction u/s 32(1)(iii) arose as a result of the Tribunal's order in the assessee's case for the assessment year 1962-63. The assessee sought to raise an additional ground of appeal to the effect that Rs.42,443 be allowed as revenue loss u/s 32(1)(iii) of the Act, incurred due to the destruction of the sugar godown because of a cyclone on 10.06.1961. The Tribunal did not permit the assessee to raise this additional ground as the same was not raised and did not arise out of the order of the Appellate Assistant Commissioner (AAC) from which the appeal had been preferred to the Tribunal. The dispute before Hon’ble High Court was whether the ITAT could permit additional grounds to be raised before it which were not raised before the AAC or the ITO. In this context, Hon’ble Court referring to the judgment of Hon’ble Supreme Court in the case of Jute Corporation of India Ltd. v. CIT [1991]187ITR688(SC) held that an additional ground before the AAC can be raised if the ground so raised could not have been raised at the stage when the return was filed or when the assessment order was made or if the ground became Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 17 available on account of change of circumstances or law. Hon’ble Court noted that the appellate authority must be satisfied that the ground raised was bona fide and that the same could not have been raised earlier for good reasons. Thus, the dispute pertained to whether any ground outside the orders of lower authorities can be raised and in circumstances peculiar to the case, Hon’ble Court agreed that it could be raised. The Hon’ble Court’s observations were in context of the general power of Tribunal to admit grounds that were not there for consideration of lower authorities. In no way, did Hon’ble Court discuss the limitations on such power, one of which is that the ground sought to be raised must be a purely legal ground originating from facts already there on record. Such limitations were propounded by Hon’ble Supreme Court in a subsequent judgment in the case of NTPC (supra). In fact, the judgment in Ahmedabad Electricity Company Ltd. (supra) is dated 30.04.1992 whereas the NTPC judgment is dated 4.12.1996, i.e. the essential criteria of the requisite facts being there on record was laid down by Hon’ble Supreme Court subsequent to the judgment of the Hon’ble High Court. In fact, in para 24 of the decision in case of Ultratech (supra), the same has been brought out in unequivocal terms- “24] In any view of the matter, the aforesaid decision does not deal with the situation which arises for consideration in this case viz. relying upon the evidence on record for a subsequent assessment year to hold that the assessee is entitled to a benefit of deduction u/s 80IA of the Act for an earlier assessment year. A deduction under Chapter VIA of the Act under which Section 80IA of the Act falls would depend, as pointed out above, upon the satisfaction of the facts necessary for claiming a deduction. The allowing of a deduction in a subsequent year's assessment order cannot determine the facts as existing in the Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 18 earlier assessment year, such as in this case so as to allow the deduction.” 21. Thus, the observations of Hon’ble High Court in Ahmedabad Electricity Company Ltd. (supra) that an additional ground can be raised if it becomes available to the assessee due to changed circumstances, was in context of the overall powers of Tribunal to allow grounds that were not there for consideration of lower authorities. In no way did the said judgment deal with the requirement of the essential facts being there on record. The same has clearly been differentiated by Hon’ble High Court in case of Ultratech Cement (supra) in the para reproduced above. It has clearly been pointed out that the dispute about absence of facts on record, which is essential to ascertain the veracity of assessee’s claim of eligibility is different from dispute about the power of the Tribunal to consider grounds which were not raised before lower authorities. It is apparent that the observation of Hon’ble High Court that an additional ground can be raised when it becomes available as a result of changed circumstances or subsequent judgment does not create an exception from requirement of availability of facts and evidence on record. In fact, the requirement of availability of essential facts on record was not even under consideration before Hon’ble High Court in Ahmedabad Electricity Company Ltd. (supra). Further, the changed circumstances in Ahmedabad Electricity Company Ltd. (supra) do not refer to a particular interpretation of the law being accepted over the other but refer to a case wherein the ground became available as a result of such changed Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 19 circumstances and had the circumstances not changed, the ground was not even available to the assessee. In case of multiple interpretations, it is always open to the assessee to argue the interpretation favouring his case and in respect of the same, it cannot be argued that assessee is prevented from doing the same for a bonafide reason. In the instant case, the ground of claiming the concessional rate as per the applicable DTAA was available from the date such agreement came into effect and there is no bonafide cause as to why the assessee could not raise this ground before lower authorities. In any case, that is not the argument of ld. DR and his argument is about absence of facts essential to ascertain assessee’s claim of eligibility u/s 90 of the Act. 22. In order to bring out the observation of Hon’ble High Court in Ultratech Cement Ltd. (supra), more clearly, the conclusion in para 27 is reproduced as below- “27] There can be no dispute that whether or not to allow an additional ground to be raised before the appellate authority is to be decided by the appellate authority in exercise of its discretion considering the facts and circumstances of the case before it. Where only a pure question of law arises from facts which are already on record, then there is no reason why the appellate authority should not consider the question of law so as to determine the correct tax liability of an assessee in accordance with law. However, where evidence is to be examined and that is not on record, then it will be considered only if the parties seeking to raise the additional ground satisfies the authority concerned that for good and sufficient reasons, the ground could not be raised before the lower authorities. In the present facts, no such ground has been made out by the assessee before the Tribunal. In the present facts, as pointed out above and being reiterated once more, the additional ground, which is raised, is not a pure question of law, but would depend upon the Printed from counselvise.com ITA No.7871/MUM/2025 (AY 2016-17) & CO No.34/MUM/2026 (AY:2016-17) Citigroup Global Markets India Pvt. Ltd. 20 satisfaction of the authority as to the facts existing in the subject assessment year for allowing the benefit of Section 80IA of the Act. The additional ground is being raised for the first time before the Tribunal without relevant evidence being on record.” 22.1 In assessee’s case, the facts mandated as per Form 10F and rule 21AB read with section 90 of the Act are not there on record. If the assessee’s claim is to be allowed, then the same facts and documents need to be there on record and verified by the AO. It is clear that the observations of Hon’ble High Court are squarely applicable to the facts at hand and, hence, the additional grounds raised on behalf of the assessee cannot be admitted. Accordingly, the ground No.1 in Cross Objections of the assessee is not admitted. 23. In the result, the appeal of the revenue is dismissed. Order is pronounced on 27.03.2026. Sd/- Sd/- (ANIKESH BANERJEE) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 27.03.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order Assistant Registrar ITAT, MUMBAI Printed from counselvise.com "