IN THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER)

AND SMT. RENU JAUHRI (ACCOUNTANT MEMBER)

I.T.A. No. 3519/Mum/2025 Assessment Year: 2020-21 M/s. Steadview Vs. Commissioner Of Income Capital Mauritius Tax (International Limited Taxation) Mumbai-4 Unit 3, 4C 4^th Floor 539, 5^th Floor, Kautilya 19 Bank Street, Bhavan, C-41 to C-43, G Cybercity, Ebene, Block, Bandra Kurla Mauritius, 72201 Complex, Bandra (East)

PAN: AAQCS1253G Mumbai- 400051 (Appellant) (Respondent)

Appellant by Shri Rahul Sarda Respondent by Shri Satya Pal Kumar, SR. D.R.

Date of Hearing 06.08.2025 Date of Pronouncement 16.08.2025 ORDER Per: Smt. Beena Pillai, J.M.:

The present appeal filed by the assessee arises out of order dated 26/03/2025 passed by Ld.CIT(IT), Mumbai for assessment year 2020-21 on following grounds of appeal :

“1) The Commissioner failed to appreciate that the order dated

20.09.2022 passed by the Assessing Officer was neither erroneous

nor prejudicial to the interest of the Revenue. Hence, the order dated 26.03.2025 passed by the Commissioner seeking to revise the assessment is without jurisdiction and bad in law.

2) The Commissioner failed to appreciate that the order dated

20.09.2022 passed by the Assessing Officer was not erroneous on the grounds pointed out by the Commissioner in his order dated 26.03.2025. In fact, the adjustment proposed by the Commissioner in the order dated 26.03.2025 was legally unsustainable and erroneous. Hence, the order dated 26.03.2025 passed by the Commissioner may be set aside.

3) The Commissioner erred in observing that the Assessing Officer failed to conduct proper enquiry without appreciating that the Assessing Officer had duly conducted the requisite enquiries before passing the assessment order dated 26.03.2025.”

Brief facts of the case are as under:

2. The assessee is a company incorporated in Mauritius and is registered as foreign portfolio investment in India by SEBI. It is engaged in investment activities in India through FPI. It is submitted that the assessee invested in the Indian capital markets and the any debt securities and earns income by way of interest and capital gains. During the year under consideration the assessee filed its return of income on 04/02/2021 declaring total income at Rs. 100,36,28,180/- The case was selected for scrutiny and notice u/s. 142(1) of the Act was issued along with questioner from time to time. In response to the said notice, the assessee furnished details as called for which is placed on record. The Ld.AO after carrying out necessary verification accepted income filed by the assessee and passed assessment order on

20/09/2022 u/s.143(3) of the Act.

2.1 Subsequently, the case records were perused by Ld.CIT. He was of the opinion that the assessing officer failed to carry out inquiries as warranted, in respect of facts and circumstances of the case. The Ld.CIT was of the opinion that, assessment was completed without examining all aspect which were to be looked into for determining correct taxable income earned by the assessee. He was thus of the opinion that, the assessment order dated 20/09/2022 passed u/s.143(3) of the Act was erroneous and prejudicial to the interest of the revenue. The Ld.CIT thus issued show caused notice u/s.263 of the Act on 17/03/2025, as to why the assessment order should not be cancel or revised as under:

2.2 In response to the above notice u/s. 263, the assessee did not submitted any details Ld.CIT thus, after considering the material on record observed and held as under :

“4. I have gone through the facts of the case and material on record. It is seen that AO during the course of assessment proceedings did not make adequate enquiry and verification which should have been made. In the instant case, it is seen that during the assessment year 2020-21, the assessee earned total taxable capital gain of Rs. 206,68,40,563/- (on shares purchased prior to 31.03.2017) which is claimed exempt under India-Mauritius D