GOVERNMENT OF SINGAPORE ,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONL TAXATION)-2(3)(2), MUMBAI

ITA 4515/MUM/2023

AI Insights

The case involves the Government of Singapore appealing against the order of the Deputy Commissioner of Income-tax (International Taxation), Mumbai, concerning the assessment year 2021-22. The appeal raised several grounds, including the invalidity of the order due to being time-barred, denial of benefits under the India-Singapore Tax Treaty, and various errors in tax computation and assessments. However, after the Competent Authorities of India and Singapore agreed to resolve the issues through MAP, the Government of Singapore decided to withdraw the appeal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26705 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2021-2022
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VINOD TANWANI
• Assessee Lawyers: DANISH TRANGADIA
• Keywords: Capital Gains; Competent authority
• Section: 143(3); 153; 22; 13

Judgement Text

" IN THE INCOME-TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SMT. BEEN PILLAI, JUDICIAL MEMBER & SMT. RENU JAUHRI, ACCOUNTANT MEMBER ITA No. 4515/MUM/2023 (A.Y. 2021-22) Government of Singapore C/o Ernst & Young LLP, 17th Floor, The Ruby, 29, Senapati, Bapat Marg, Dadar(W), Mumbai-400028 v/s. बनाम DCIT (IT) – 2(3)(2), Mumbai 1711, 17th Floor, Air India Building, Nariman Point, Mumbai-400021 स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAAJG0594R Appellant/अपीलार्थी .. Respondent/प्रतिवादी Assessee by : Ms. Danish Trangadia Revenue by : Shri Vinod Tanwani Date of Hearing 18.02.2025 Date of Pronouncement 20.02.2025 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Deputy Commissioner of Income-tax (International Taxation), 2(3)(2)- Mumbai dated 19.10.2024 passed u/s. 143(3) r.w.s. 144C(13) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2021-22. 2. The assessee has raised the following grounds of appeal: “On the facts and circumstances of the case, the Appellant craves leave to prefer an appeal against the order under section 143(3) read with section 144C(13) of the Act dated 19 October 2023, issued by the Deputy Commissioner of Income Tax (International Taxation)-2(3)(2), Mumbai ('the learned AO'] in pursuance of the directions under section 144C(5) of the Act issued by the P a g e | 2 ITA No. 4515/Mum/2023 A.Y. 2021-22 Government of Singapore Hon'ble DRP-1, Mumbai dated 26 September 2023 on the following grounds, each of which is without prejudice to and independent of the others. On the facts and in the circumstances of the case and in law, the learned AO/ Hon'ble DRP: Ground of Appeal No. 1: Invalidity of order under section 143(3) read with section 144C(13) of the Act dated 19 October 2023 on account of it being time- barred 1. Erred in not passing the order under section 143(3) read with section 144C(13) of the Act within the time limit prescribed under section 153 of the Act which is the outer time limit for passing the final assessment order and hence, the impugned order dated 19 October 2023 which is passed after 31 December 2022 (time limit as per section 153 of the Act) is time barred and liable to be quashed. Ground of Appeal No. 2: Denial of benefit of Article 22 of the India-Singapore Tax Treaty (IS Treaty) to claim capital gains income earned during the year as exempt Without prejudice to the Ground of Appeal No. 1 2. Erred in taxing the capital gains amounting to INR 82,220,869,366 earned by the Appellant as gains derived from transactions pursuant to the conduct of commercial activities and thereby not exempt under Article 22 of the IS Treaty. Ground of Appeal No. 3: Long-term capital gains under section 112 of the Act is taxed at the rate 30% Without prejudice to the Ground of Appeal No. 1 & 2 3. Erred in taxing the long-term capital gains under section 112 of the Act amounting to INR 1,35,43,08,784 at a rate of 30% as against the rate of 10% as prescribed under section 115AD of the Act applicable to FPI's. Ground of Appeal No. 4: Denial of benefit of Article 13 of the IS Treaty for the income earned as capital gains Without prejudice to the Ground of Appeal No. 1, 2 & 3 4. Erred in holding that the Appellant being a government entity, Article 22 of the IS Treaty prevents and precludes the application of other Article of the IS Treaty. Accordingly, erred in taxing the capital gains without providing the grandfathering benefit under Article 13(4A) of the IS Treaty for the shares acquired prior to 01 April 2017 and taxing at the rates prescribed under the Act. Ground of Appeal No. 5 & 6: Arithmetical errors in the computation sheet Without prejudice to the Ground of Appeal No. 1, 2, 3, & 4 5. Erred in levying of tax on short-term capital gains under section 111A amounting to INR 15,103,509,870 at 30% in the computation sheet as against 15% determined in the impugned order. 6. Erred in not granting the benefit of basic exemption limit of INR 1,00,000 on the long-term capital gains taxable under section 112A of the Act in the computation sheet. Ground of Appeal No. 7: Short grant of tax deducted at source P a g e | 3 ITA No. 4515/Mum/2023 A.Y. 2021-22 Government of Singapore 7. Erred in short granting of tax deducted at source amounting to INR 72,748,347 as claimed in the return of income filed. Ground of Appeal No. 8: Non receipt of Income Tax Refund 8. Erred in stating that the refund amounting to INR 3,114,442,275 was received by the Appellant, wherein the appellant has not received any such refund amount. Ground of Appeal No. 9: Levy of interest under section 234A of the Act-INR 480,937,990 9. Erred in levying interest under section 234A of the Act amounting to INR 480,937,990 without appreciating that there was no delay in filing the return of income and payment of taxes by the Appellant. Ground of Appeal No. 10: Levy of interest under section 2348 of the Act-INR 2,981,815,538 10. Erred in levying interest under section 2348 of the Act amounting to INR 2,981,815,538. Ground of Appeal No. 11: Initiation of penal proceedings under section 270A of the Act 11. Erred in initiating penalty under section 270A of the Act alleging under- reporting of income by the Appellant.” 3. At the outset, Ld. AR submitted that the assessee had applied for resolution on the issues under Mutual Agreed Procedure [MAP] and the same had been received vide CBDT letter dated 24.12.2024. A copy of the communication has also been placed before us. As the Competent Authority [CA] of both countries have agreed to resolve the dispute through MAP resolution dated 24.12.2024, the assessee has sought permission to withdraw the appeal. 4. In view of the above, the appeal of the assessee is dismissed as withdrawn. Order pronounced in the open court on 20.02.2025. Sd/- Sd/- BEENA PILLAI RENU JAUHRI (न्यातयक सदस्य/JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) P a g e | 4 ITA No. 4515/Mum/2023 A.Y. 2021-22 Government of Singapore Place: म ुंबई/Mumbai दिनाुंक /Date 20.02.2025 अननक ेत स ुंह राजपूत/ स्टेनो आदेश की प्रतितलति अग्रेतिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अतिकरण/ ITAT, Bench, Mumbai. "