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2019 (11) TMI 697 - AT - Income TaxTDS u/s 195 - maintainability of the appeal filed by the respondent company before learned Commissioner (Appeals) - non tds deduction - PE in India - appealable order u/s 246A - HELD THAT - As decided in own case 2016 (6) TMI 728 - ITAT MUMBAI Order appealed against is an order passed under section 195(2) against ONGC requiring it to deduct tax at source on payments made to the assessee. Further, there is no final determination of liability under the Act as far as the assessee is concerned which can only be determined when assessment is framed against the assessee. That besides, there being a specific provision under section 248 of the Act for filing appeal against order passed under section 195(2) of the Act, that too by payer / deductor of tax at source the said order cannot be challenged under section 246A of the Act by the respondent. We are of the considered opinion that the appeal filed by the respondent assessee before the learned Commissioner (Appeals) against the order passed under section 195(2) in the case of ONGC is not maintainable. Commissioner (Appeals), in our view, was not competent under the provisions of section 246A of the Act to entertain such an appeal. We, therefore, set aside the impugned order passed by the learned Commissioner (Appeals) and restore the order of the Assessing Officer under section 195(2). - Decided in favour of revenue
Issues Involved:
1. Maintainability of the appeal filed by the respondent company before the Commissioner of Income Tax (Appeals) [CIT(A)]. 2. Applicability of Section 246A and Section 248 of the Income Tax Act, 1961. 3. Taxability of the respondent company's income in India. 4. Applicability of Double Taxation Avoidance Agreement (DTAA) benefits. 5. Determination of Permanent Establishment (PE) status. Issue-wise Detailed Analysis: 1. Maintainability of the Appeal: The primary issue raised was whether the appeal filed by the respondent company before the CIT(A) was maintainable. The Tribunal observed that the appeal was filed by M/s. Abu Dhabi Ship Building PJSC against an order under Section 195(2) of the Income Tax Act, 1961, which directed ONGC to withhold tax on payments made to the respondent company. The Tribunal noted that Section 246A, which lists the provisions under which an appeal can be filed, does not mention orders passed under Section 195(2). The Tribunal further stated that the only provision under which an order under Section 195(2) can be challenged before the CIT(A) is Section 248, which allows the payer/deductor to file an appeal, not the recipient of the income. Since ONGC did not file an appeal, the Tribunal concluded that the CIT(A) was not justified in entertaining the appeal filed by the respondent company. 2. Applicability of Section 246A and Section 248: The Tribunal emphasized that Section 246A does not include orders under Section 195(2) as appealable. The Tribunal clarified that an appeal under Section 248 can only be filed by a deductor upon fulfilling certain conditions. The Tribunal cited its earlier decision in ITA no.5418/Mum./2013, dated 8th June 2016, which held that an order under Section 195(2) is not appealable under Section 246A but only under Section 248 by the deductor, in this case, ONGC. The Tribunal reiterated that the right to appeal is a statutory right and must be explicitly conferred by the statute. 3. Taxability of the Respondent Company's Income in India: The Tribunal did not delve into the merits of whether the respondent company's income was taxable in India. This issue was not addressed because the appeal was dismissed on the grounds of maintainability. 4. Applicability of DTAA Benefits: Similarly, the Tribunal did not address the applicability of DTAA benefits between India and UAE. The focus remained on the procedural aspect of the appeal's maintainability rather than the substantive tax issues. 5. Determination of Permanent Establishment (PE) Status: The Tribunal did not examine whether the respondent company had a Permanent Establishment in India through a dependent agent. This issue was also not considered due to the dismissal of the appeal on procedural grounds. Conclusion: The Tribunal concluded that the appeal filed by the respondent company before the CIT(A) was not maintainable under Section 246A of the Income Tax Act, 1961. The Tribunal set aside the order of the CIT(A) and restored the order of the Assessing Officer under Section 195(2). The appeal was allowed in favor of the Revenue, and the other grounds raised on merit were not addressed due to the decision on the maintainability issue.
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