9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (11) TMI 1273 - AT - Income TaxInterest levied u/s 234B - Held that - As decided in MGB Metro Group Buying HK Ltd. case 2013 (1) TMI 453 - ITAT DELHI the aforesaid proviso inserted by the Finance Act, 2012 is prospective in nature with no retrospective effect. The proviso was brought into operation w.e.f. 1.4.2012 whereas the AY involved are 2005-06 and 2006-07, therefore not in agreement with the DR because the said proviso is not retrospective in nature. The language used in section 209(1) is regarding payment of advance tax in the financial year, therefore, the proviso is not attracted for the impugned assessment year. As decided in DIT v. Jacabs Civil Incorporated/Mitsubishi Corpn. 2010 (8) TMI 37 - DELHI HIGH COURT that since the assessee is not liable for advance tax, therefore, cannot be charged interest for failure to pay advance tax. Also see CIT v. Sedco Forex International Drilling Co. Ltd. 2003 (10) TMI 40 - UTTARANCHAL HIGH COURT - Decided in favour of assessee.
Issues Involved:
1. Validity of notice issued under Section 148 of the Income Tax Act. 2. Taxability of income received from Reliance Petroleum Limited (RPL). 3. Applicability of Article 7 vs. Article 15 of the India-US DTAA. 4. Rate of taxation under Article 15 of the India-US DTAA. 5. Levy of interest under Sections 234B and 234C of the Income Tax Act. Issue-wise Detailed Analysis: 1. Validity of Notice Issued Under Section 148 of the Income Tax Act: The assessee challenged the validity of the notice issued under Section 148, arguing that the initial reassessment order was void ab initio. The assessee contended that the NOC issued by the Income Tax Department was not found by the Assessing Officer, and thus, there was no reason to believe that income had escaped assessment. However, the Tribunal noted that the assessee did not press ground nos. 1 to 8 during the hearing, implying that the issue of taxability of income was not disputed. 2. Taxability of Income Received from Reliance Petroleum Limited (RPL): The Assessing Officer held that the sum of Rs. 1,95,35,270/- received from RPL was taxable in India at 30%, grossed up under Section 195A to Rs. 2,79,07,529/-. The AO rejected the assessee's plea that the service rendered by the Permanent Establishment (PE) and PWC LLP were of different natures. The CIT(A) upheld the AO's decision, stating that the professional fees received from RPL were taxable in India. 3. Applicability of Article 7 vs. Article 15 of the India-US DTAA: The assessee argued that Article 7(1) of the India-US DTAA should apply, which pertains to business profits. However, the CIT(A) held that Article 7 was not applicable as it relates to enterprises carrying on business activities. Instead, Article 15(1)(b) under "Independent Personal Services" was applicable, as the services rendered by the assessee were professional in nature. The CIT(A) noted that the assessee's stay in India exceeded 90 days, making the income taxable under Article 15(1)(b). 4. Rate of Taxation Under Article 15 of the India-US DTAA: The CIT(A) held that the income should be taxed under Article 15(1)(b) and not under Article 15(1)(a). The Tribunal directed the AO to tax the amount accordingly. This was the only issue pressed by the assessee during the hearing, and the Tribunal allowed the assessee's appeal for statistical purposes. 5. Levy of Interest Under Sections 234B and 234C of the Income Tax Act: The CIT(A) ruled that interest under Sections 234B and 234C was not chargeable, as the entire income of the assessee was subject to TDS. The CIT(A) relied on a previous Tribunal decision in the assessee's case for the assessment year 2001-02, where it was held that the assessee was not liable to pay advance tax due to the TDS provisions. The Tribunal upheld this decision, citing similar views from various High Courts and the Tribunal's order in the case of DCIT v. MGB Metro Group Buying HK Ltd. Conclusion: The assessee's appeal was allowed for statistical purposes, and the Revenue's appeal was dismissed. The Tribunal upheld the CIT(A)'s decision regarding the non-applicability of interest under Sections 234B and 234C, and directed the AO to tax the income under Article 15(1)(b) of the India-US DTAA. The Tribunal's order was pronounced on 29/08/2015.
|
