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TMI Blog2009 (5) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... ot personally present in Chennai during the relevant period. Later on, when the same was brought to his notice, necessary arrangements were made to file the appeal. 3. In this regard, the learned Departmental Representative submitted that the order was duly served and acknowledgment in this regard dt. 19th March, 2008 is also available. The learned counsel of the assessee when confronted with this acknowledgment argued that the Signature on the acknowledgment is of a different person other than the assessee. Hence, she claimed that assessee's submission is correct that he was made aware of the order later on, which resulted in the delay. 4. We have carefully considered the submissions. Admittedly, the Department is having an acknowledgment of service of letter addressed to Shri Mustaq Ahmed, Chennai-17, dt. 19th March, 2008. There is an acknowledgment also by way of seal of M/s Mustafa Gold Mart, Chennai-17, but the learned counsel of the assessee has sought to raise a doubt that the receiver is a person other than the assessee. This has been attributed to the delay in filing of the appeal. Upon careful consideration of the circumstances as narrated above, in our considered opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 of the IT Act. She further argued that AO has properly applied his mind and taken a view which was one of the possible views and hence she argued that the provisions of s. 263 of the IT Act are not applicable and the assessment order cannot be said to be an erroneous one. In this regard, she placed reliance upon Hon'ble apex Court decision in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 159 CTR (SC) 1 : (2000) 243 ITR 83 (SC). 8. On the other hand, the learned Departmental Representative, Shri K.R. Meena, submitted that provisions of under s. 80HHC very clearly provide that, assessee being a non-resident is not at all eligible for deduction under s. 80HHC of the IT Act. He argued that for the asst. yr. 2002-03, the assessee's assessment was only an intimation under s. 143(1). Hence, he claimed that it cannot be said that assessee was granted such deduction under an appropriate assessment procedure. For the asst. yr. 2003-04, he argued that as per assessee's counsel's own admission, there was no such deduction under s. 80HHC granted for the said assessment year. 9. The learned Departmental Representative further referred to cl. (4) of art. 26 of the DTAA between India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act reads as under: "Where the Central Government has entered into an agreement with the Government of any country outside India under sub-s. (1) for granting relief of tax, or as the case may be, avoidance of double taxation, then, in relation to the assessee to whom such agreement applies, the provisions of this Act shall apply to the extent they are more beneficial to that assessee." 13. A reference to the relevant art. 26 of the DTAA between India and Singapore is as under: "1. The nationals of a Contracting State shall not be subjected in the other Contracting State to any taxation or any requirement connected therewith which is other or more burdensome than the taxation and connected requirements to which nationals of that other State in the same circumstances and under the same conditions are or may be subjected. 2. The taxation on a PE which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances or under the same conditions. This provision shall not be construed as preventing a Con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, a plain reading of s. 80HHC unambiguously states that the same is available to an Indian company or a person (other than a company) resident in India. Thus, a plain reading of s. 80HHC shows that the assessee is not at all eligible for deduction under the said section. However, we note that s. 90(2) of the IT Act gives precedence to the DTAA over the provisions of the IT Act. There is no dispute in this regard. Article 26 of the DTAA under the heading, 'Non-discrimination' vide cl. (2) provides that the taxation on a PE which an enterprise of a Contracting State has in the other Contracting State shall not be less favourably levied in that other State than the taxation levied on enterprises of that other State carrying on the same activities in the same circumstances or under the same conditions. The learned counsel of the assessee has interpreted this clause that on the basis of this clause, relevant provisions of s. 80HHC in as much as it discriminates on the basis of residence, cannot be sustained. However, we find that in cl. (4)(a) of the said art. 26 of the DTAA, it has been provided that these paras shall not be construed as obliging the Contracting State to grant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f mind. Hence, it cannot be said that he was taking one of the possible views. 20. In this regard, we also place reliance upon order of the Hon'ble Rajasthan High Court in the case of CIT vs. Emery Stone Manufacturing Co. (1995) 126 CTR (Raj) 345; (1995) 213 ITR 843 (Raj), wherein it was held that, allowing certain deductions without proving the claim or without proper verification or in ignorance of the provisions of law are the various instances on the basis of which the order could be considered prejudicial to the Revenue and could be set right in revisional jurisdiction. 21. As discussed in the preceding para, we have already come to the conclusion that AO has not at all applied his mind on this issue in the proper perspective. Moreover, as explained in preceding paras, there is no question of two possible views on this issue. Sec. 80HHC clearly mandates that deduction under this section cannot be granted to non-residents. Clause (4)(a) of the non-discrimination clause of art. 26 of the DTAA between India and Singapore clearly provides that the said article cannot oblige India to grant such deduction to the assessee, being resident of Singapore. Under the circumstances, we up ..... 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