Whether a foreign company whose income is not taxable in India on account of application of DTAA can be issued notice u/s 148 for filing return of income without dealing with objections filed in response to notice u/s 148A(b)

 

The issue before Delhi High Court in the case of Component source Company limited Vs ACIT Circle 1(2)(1),Delhi was whether a foreign company whose income is not taxable in India on account of application of DTAA can be issued notice u/s 148 for filing return of income without dealing with objections filed in response to notice u/s 148A(b)

The Delhi high court in this case was dealing with notice u/s 148 which was issued for taxing sale of software by the petitioner company which was incorporated in Japan and the income of the company was claimed to be exempt in pursuance of the DTAA between India and Japan. Even though objections were raised against the notice u/s 148A(b) which was issued, however the same were disposed off in a perfunctory manner since the objections raised were at the very root of assumption of jurisdiction and on these facts the notice was quashed with a direction to consider the matter afresh.

Lot of foreign companies are receiving income which are not taxable in India and routine notices which are issued u/s 148 will thus have to undergo the proposition laid herein and will be helpful in similar cases.

 

The copy of the order is as under:

1717381664810