2005 (3) TMI 790 - AAR - Income Tax

Summary

Issues:
1. Maintainability of the applications under section 245Q(1) of the Income-tax Act, 1961.
2. Objection raised by the Commissioner regarding the pending questions before income-tax authorities and the High Court.

Analysis:

Issue 1: Maintainability of the applications under section 245Q(1) of the Income-tax Act, 1961:
The applications were placed before the Authority for passing orders under sub-section (2) of section 245R of the Act. The Commissioner raised objections to the maintainability of the applications, citing that the questions raised were pending before income-tax authorities. The applicants sought advance rulings from the Authority based on a consortium's contract with the Delhi Metro Rail Corporation. The Commissioner argued that the applications were not maintainable due to pending proceedings before income tax authorities and the High Court. The applicants contended that mere filing of returns did not constitute pending questions before the assessing officer. The Authority clarified that without a notice under section 143(2) of the Act, the questions were not considered pending before the assessing officer, making the applications maintainable.

Issue 2: Objection raised by the Commissioner regarding the pending questions before income-tax authorities and the High Court:
The Commissioner objected to the applications based on pending questions before income-tax authorities and the High Court. However, the Authority determined that the questions related to the rate of tax for TDS in other proceedings and were not directly pending before the High Court or income tax authorities. The Authority noted that the applications did not involve the determination of the rate of tax for TDS, which was the focus of the other proceedings. The previous order recalling the applications was based on incorrect verification, which was rectified in the amended applications. Therefore, the Authority found that the bar under clause (i) of sub-section (2) of section 245R was not applicable, allowing the applications for pronouncement of rulings on the questions presented.

In conclusion, the Authority found the applications maintainable under section 245Q(1) of the Income-tax Act, 1961, despite objections raised by the Commissioner regarding pending questions before income-tax authorities and the High Court. The Authority clarified the distinction between the issues raised in the applications and those pending in other proceedings, ultimately allowing the applications for further rulings.