2023 (12) TMI 1233 - HC - Income Tax

Tribunal not dealing with second issue/question - whether the respondent/assessee had a Permanent Establishment (PE) in India? and whether the subject transaction was at Arm s Length and, if it was so, whether any profit could be attributed to the respondent/assessee? Tribunal has dealt only with the first issue and concluded that the respondent/assessee neither a fixed place PE nor a dependent agent PE in India. Because the Tribunal reached this conclusion, it observed that the other issue was academic. HE;D THAT - As the record discloses that the respondent/assessee had raised an alternative plea concerning the second issue. In our opinion, it would save time and costs if the Tribunal were to render a view with regard to the second issue as well, which is broadly referred to hereinabove. Therefore, without disturbing the impugned orders passed by the Tribunal, with the consent of counsel for the parties, the above-captioned matters are remitted to the Tribunal for rendering a decision with regard to the second issue.It is made clear that whichever party is aggrieved by the impugned order, as well as the order passed upon remand by the Tribunal, will have liberty to approach the court by way of a statutory appeal. Since the instant appeal concerned the impugned orders passed by the Tribunal as and when the appellant/revenue files an appeal, the period spanning between the date when the above-captioned appeals were instituted in this court and the date when the Tribunal passes the order post remand, will not be factored in while calculating the period of limitation.

Summary

Issues involved: Condonation of delay in re-filing appeals, Assessment Year (AY) 2018-19, AY 2019-20, AY 2017-18, Existence of Permanent Establishment (PE) in India, Arm's Length Transaction, Remand to Tribunal for decision on second issue.

On the issue of condonation of delay in re-filing the appeals, the appellant sought condonation of delays of 162 days for two appeals and 440 days for another. The court, considering the circumstances, condoned the delays and disposed of the applications accordingly.

Regarding the appeals concerning different Assessment Years, ITA 800/2023 and ITA 801/2023 challenged a common order by the Tribunal for AY 2018-19 and AY 2019-20 respectively, while ITA 803/2023 challenged an order for AY 2017-18. The common order was based on the order for AY 2017-18.

The Tribunal addressed the issue of whether the respondent had a Permanent Establishment (PE) in India and if the transaction was at Arm's Length. The Tribunal found no fixed place PE or dependent agent PE in India, making the second issue academic. The respondent had raised an alternative plea on the second issue.

The court decided to remit the matters to the Tribunal for a decision on the second issue to save time and costs. Parties were given liberty to appeal the orders. The period between the appeals being filed and the Tribunal's decision post-remand would not count towards the limitation period for filing appeals.

The Tribunal was instructed to expedite the matter within three months. Parties were to act based on digitally signed copies of the order.