2020 (1) TMI 1065 - HC - Income Tax

Application for AAR (Authority for Advance Ruling) - application rejected on the ground that the Assessee failed to produce the basic documents viz., basic contract dated 27 March 2004 entered between the consortium and the Assessee with Sri Lanka Telecom - HELD THAT - We are satisfied that no interference is called for in the impugned order passed by the learned Authority for Advance Rulings. Despite grant of several opportunities, the Assessee admittedly failed either to adduce the basic contract before the said authority nor could satisfy the said authority that it was impossible for the Assessee to produce the said basic documents. We fail to understand any cogent reason for the Assessee not to produce the same. The party to the said contract was admittedly in another contract with the present petitioner and therefore, the present Assessee could have definitely requested the party viz., Sri Lanka Telecom to supply a copy of the said agreement to provide and background and context to the Authority for Advance Rulings to decide the question on which such advance ruling was sought by the Assessee. Without making any such efforts to satisfy the Authority that it was not possible for the Assessee to obtain such agreement, the Assessee cannot seek any interference, invoking the extraordinary jurisdiction under Article 226/227 of the Constitution of India for upsetting the said order. Assessee admittedly failed to satisfy the conditions and the requirements raised by the said authority concerned for deciding the question and therefore, no exception could be taken.

Issues involved:
1. Rejection of application by the Authority for Advance Ruling due to non-production of basic contract dated 27 March 2004.
2. Assessee's contention regarding the inability to produce the contract and reliance on a different agreement with SLT dated 24 August 2009.
3. Justification of the impugned order by the Authority for Advance Rulings.
4. Failure of the Assessee to provide the basic contract despite multiple opportunities.
5. Assessment of the Assessee's efforts to obtain the contract and satisfaction of conditions set by the authority.
6. Invocation of extraordinary jurisdiction under Article 226/227 of the Constitution of India by the Assessee.

Analysis:
1. The writ petition was filed by the Assessee challenging the order of the Authority for Advance Ruling, which was rejected due to the non-production of the basic contract dated 27 March 2004 between the consortium and the Assessee with Sri Lanka Telecom (SLT). The authority emphasized the importance of understanding the terms of the contract to rule on the questions raised by the Assessee satisfactorily. The authority declined to rule on the questions without comprehending the rights conveyed to the Assessee through the contract.

2. The Assessee's counsel argued that the Assessee was not a party to the contract dated 27 March 2004 and hence could not produce it. Instead, the counsel referred to a different agreement dated 24 August 2009 between the Assessee and SLT, suggesting that the questions could be addressed based on this agreement's clauses. However, the Revenue's counsel supported the impugned order of the authority.

3. After hearing both parties, the court found no reason to interfere with the authority's decision. The Assessee failed to produce the basic contract despite several opportunities, raising doubts about the lack of effort to obtain the document. The court highlighted that the Assessee could have requested SLT for a copy of the contract to provide context to the authority for making a decision.

4. The court concluded that the Assessee did not meet the conditions set by the authority for deciding the question, justifying the rejection of the application. The court dismissed the writ petition, stating it lacked merit and was liable for dismissal. The Assessee's invocation of Article 226/227 of the Constitution of India for challenging the order was deemed unwarranted due to the failure to satisfy the authority's requirements.

This detailed analysis covers the issues involved in the legal judgment comprehensively, providing insights into the court's reasoning and the parties' arguments.

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