W.P.(C) 1879/2023 Page 1 of 10

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IN THE HIGH COURT OF DELHI AT NEW DELHI

Reserved on: 10^th October, 2023

Pronounced on: 18^th October, 2023

+

W.P.(C) 1879/2023

SINOGAS MANAGEMENT PTE LTD

..... Petitioner

Through:

Mr. Ashish Mehta, Advocate.

versus

DEPUTY COMMISSIONER OF INCOME TAX & ANR.

..... Respondents

Through:

Mr. Aseem Chawla, Senior Standing

Counsel with Mr. Viplav Acharya,

Ms. Pratishtha Chaudhary and Mr.

Aditya Gupta, Advocates for ITD.

Ms. Bakshi Vinita, Senior Panel

Counsel for UOI.

CORAM:

HON'BLE THE CHIEF JUSTICE

HON'BLE MR. JUSTICE SANJEEV NARULA

JUDGEMENT

SANJEEV NARULA, J.

1. The Petitioner, Sinogas Management PTE. Ltd., challenges the order

dated 23^rd June, 2022 (“impugnedorder”), issued by Respondent No. 1 –

Deputy Commissioner of Income Tax. This order, rendered under Section

143(3) read with Section 263 of the Income Tax Act, 1961 (“the Act”), and

the consequent demand and penalty notices flowing from it,¹ are assailed on

1 Dated 23rd June, 2022 and 24th June, 2022, respectively.

Digitally Signed

By:SAPNA SETHI

Signing Date:18.10.2023

12:56:39

Signature Not Verified

W.P.(C) 1879/2023 Page 2 of 10

a jurisdictional ground that the mandate of Section 144C for issuance of

draft assessment order, was not followed.

Case set up by the Petitioner

2. The facts and the arguments laid out by Mr. Ashish Mehta, counsel

representing the Petitioner, are detailed below:

2.1

The Petitioner-company, incorporated under the legal framework of

Singapore, is primarily engaged in the business of operating ships. It is a tax

resident of Singapore, and thus, it filed its return of income in India,

declaring its total income as nil for the Assessment Year (“AY”) 2017-18.

2.2

On 23^rd August, 2018, the return of income filed by Petitioner was

selected for scrutiny under Section 143(2) of the Act and a notice requiring

the Petitioner to furnish certain details, such as the nature of business

activities, tax residency certificate, copy of agreements with Indian

customers, financial statements, details of permanent establishment in India

etc., was issued on 08^th November, 2019. The Petitioner responded to the

above queries vide correspondence dated 15^th November, 2019, asserting

that it does not have a permanent establishment in India. A tax residency

certificate was also submitted with the response. Petitioner further stated that

its income fell within the purview of Article 8 of the India-Singapore

Double Taxation Avoidance Agreement (“DTAA”), and thus, the same is

taxable only in Singapore. Accordingly, the return was filed declaring

income in India as nil. In addition, Respondent No. 1 was informed of a time

charter agreement executed between Petitioner and Hindustan Petroleum

Corporation Limited for transportation of LPG. After considering the

Petitioner’s reply, on 03^rd December, 2019, Respondent No.1 passed an

Digitally Signed

By:SAPNA SETHI

Signing Date:18.10.2023

12:56:39

Signature Not Verified

W.P.(C) 1879/2023 Page 3 of 10

assessment order under Section 143(3) of the Act, granting benefit of Article

8 of the DTAA to Petitioner. The return of income filed by Petitioner was

thus accepted, without making any additions to the total income declared.

2.3.

However, on 06^th January, 2022, the Commissioner of Income Tax

(“CIT”) issued a notice under Section 263 of the Act, proposing to revise

the assessment order of 03^rd December, 2019 for AY 2017-18, on the

grounds that the Assessing Officer (“AO”) had failed to appreciate various

relevant factual and legal aspects before accepting the Petitioner’s

computation. The said notice was responded