Section 144A

Section 144A — the law in short

What the courts have decided on section 144A, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• PCIT v MDLR Hotels Pvt Ltd High CourtHelps taxpayerValidity unconfirmed
  The Additional Commissioner approved my search assessment along with hundreds of others in a single letter that says nothing but 'approved'. Is that enough under s.153D?
  No. Where the approving authority accorded approval to 246 proposed assessments by one letter that merely directed that the orders be passed before limitation and copies sent for record, the Delhi High Court held there was no substantial question of law in the Tribunal's conclusion that the approval was mechanical, and dismissed eighteen Revenue appeals. Approval that neither mentions the seized material nor shows that the draft orders were examined is a ritual, not the safeguard s.153D creates.
• Amrit Sales Promotion Pvt Ltd v Union of India High CourtHelps taxpayerValidity unconfirmed
  I applied under s.144A and the Additional Commissioner directed the Assessing Officer in my favour. Two years later the department has issued a s.148 notice on exactly the same point. Can it do that?
  No. A direction issued under s.144A binds the Assessing Officer, and once the assessment has been framed in accordance with it the department cannot reopen the same issue on the same facts under s.147/148 — that is a mere change of opinion. If the department thought the s.144A direction was prejudicial to the revenue its remedy was s.263; not having taken it, the direction became final.
• DCIT v Ozone India Ltd ITATHelps taxpayerValidity unconfirmed
  On amalgamation we issued shares at face value against net assets worth far more. The AO has taxed the excess under s.56(2)(viib). Does that provision apply to a scheme of amalgamation at all?
  The Ahmedabad Tribunal held it does not. Section 56(2)(viib) contemplates a bilateral transaction in which a company receives consideration from a resident person for the issue of shares to that person; an amalgamation is a tripartite arrangement between the amalgamated company, the amalgamating company and the amalgamating company's shareholders — the vesting comes from one and the shares go to the others — and such arrangements are not contemplated by the deeming clause.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.