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TMI Blog2015 (3) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... carries ambiguity and misinterpretation of legal provisions of the Act and inconsistent with the ratio of the decision of Special Bench in the case of J.M. Baxi (supra) and, therefore, we set aside the same by holding that the notice issued to the assessee was well within the period prescribed under the Act. - Decided in favour of revenue. Assessment of income of the assessee - whether was in the nature of Technical Services being rendered and taxable as per provisions of the section 115A r/w section 9(1)(vii) of the Act ? - Held that:- since by the earlier part of this order, we have decided the issue of limitation in favour of the Revenue and thus, it has been held that the CIT(A) was not correct in holding that the notice u/s 148 of the Act was issued beyond prescribed limitation period and the impugned order of the CIT(A) has been set aside, therefore, we deem it appropriate to restore the other issues on merits to the file of the first appellate authority i.e. CIT(A) for adjudication on merits. - Decided in favour of revenue for statistical purposes. - ITA NO. 652/DEL/2012 - - - Dated:- 13-2-2015 - SHRI S.V. MEHROTRA And Shri Chandramohan Garg For the Appellan: Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment u/s 147/148 of the Act were disposed of by the AO vide order dated 09.12.2010. 4. The assessee, thereafter, instead of filing details in the case contended that the notices issued in the names of M/s Foster Wheeler Energy Ltd. and not in the name of ONGC as representative assessee of M/s Foster Wheeler Energy Ltd. The AO noticed and observed that the notice dated 31.3.2010 u/s 148 of the Act has been issued in the name of the assessee M/s Foster Wheeler Energy Ltd. and not in the name of representative assessee M/s ONGC Ltd. and, therefore, it is not barred by limitation of time u/s 149(3) of the Act as contended by the assessee. The related operative part of assessment order reads as under:- 3. The assessee, thereafter, instead of filing details in the case, has contended that the notices are issued in the name of M/s Foster Wheeler Energy Ltd. and not in the name of ONGC as representative assessee of M/s Foster Wheeler Energy Ltd. In this regard it is noted that the revised return of Income has been filed in the name of ONGC as representative assessee of M/s Foster Wheeler Energy Ltd. Further, the notices have been issued in the name of ONGC as M/s Foster Whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter Wheeler Energy Ltd. beyond the time prescribed in section 149(3) of the Act reveals that in this case the first return was filed on 19.10.2005 (for AY 2005-06). This was revised on 28.1l.2006 and a notice u/s 148 of the Act was issued on 3l.03 .20] O. It is seen that the notice dated 3l.03.2010 was issued to M/s Foster Wheeler Energy Ltd. UK, C/o ONGC, Dehradun . Thereafter, while disposing off the objections to reopening of the case vide order dated 09.12.2010 it is seen that in para 3 at page 2 of this order it is categorically mentioned as under:- Further, the notice doted 31.03.2010 u/s 148 of the IT Act has been issued in the name of the assessee M/s Foster Wheeler Energy Ltd. and nor in the name of the representative assessee ONGC Ltd ... It is also seen that the impugned order and notice or demand clearly mentions ('ONCC as rep (sic) assessee of M/s Foster Wheeler Energy Ltd. UK, C/o ONGC, Corporate Tax Division, IDT, ONGC Kaulagarh Road, Dehradun . [Here the PAN of ONGC is seen to have been used]. 4.2 Considering the above mentioned facts it is seen that the assessment has been framed on M/s ONGC by treating it as a representative assessee of M/s foste ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reassessment u/s 147/148 of the Act could be done on ONGC as representative assessee u/s 163 of the Act for M/s Foster Wheeler Energy Ltd. UK beyond the time prescribed in section 149(3) of the Act. Ld. AR further contended that in this case first return was filed on 19.10.2005 (for AY 2005-06) and the same was revised on 28.11.2006 and a notice u/s 148 of the Act was issued on 31.3.2010. Ld. DR further pointed out that from the notice dated 31.3.2010, it is clear that the notice iu/s 148 of the Act was isused to M/s Foster Wheeler Energy Ltd. UK C/o ONGC Dehradun and while disposing of the objections for reopening of the case vide order dated 9.12.2010 in para 3 at page 3, it was categorically mentioned that the notice dated 31.3.2010 u/s 148 of the Act has been issued in the name of the assessee M/s Foster Wheeler Energy Ltd. UK and not in the name of representative asessee ONGC Ltd. 9. Ld. AR has further drawn our attention towards impugned order and the notice of demand and submitted that it is clearly mentioned that ONGC as rep (sic) assessee of M/s Foster Wheeler Energy Ltd. UK C/o ONGC, Corporate Tax Division, IDT, ONGC Kaulagarh Road, Dehradun which shows that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itatively held by their Lordships of Bombay High Court. Having regard to the act and conduct of the assessee noted above in detail, it is difficult to dispute that the assessee did not waive this benefit or privilege under the statutory provision. Therefore, the assessee agent can not turn around and raise an objection of failure to provide an opportunity of being heard u/s 163(2). The assessee was not and could not be treated as an agent u/s 163 of the Act. Besides, the circumstances under which original returns in all the assessment years under reference were filed u/s 139, accepting position of agent of non-resident remained unaltered. These unaltered circumstances are to be considered at the time of application of Section 147/148 of the Act for assessment of non-resident through the agent. As pointed out by their Lordships of Bombay High Court, assessment includes reassessment. It is not possible to contend that he is an agent for filing returns u/s 139(1) and for regular assessment but not for reassessment. Therefore, on the facts and circumstances of the case, provision of Section 149(3) has no application in this case nor was there any necessity to pass any order in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t notice u/s 148 of the Act dated 31.3.2010 was issued to M/s Foster Wheeler Energy Ltd. UK, Dehradun to the similar address (PB page 68 69). We further note that the ONGC filed reply dated 29.4.2010 to the AO mentioning Sub: reassessment proceedings in the case of M/s Foster Wheeler Energy Ltd. UK for AY 2005-06 . At this juncture, it would be appropriate and relevant to consider the agreement dated 7.7.2004 clause 11 at internal page 12 of the agreement (PB page no. 40) wherein it has been agreed that the consultant viz. M/s Foster Wheeler Energy Ltd. UK shall bear all applicable duties, levy etc. including both the corporate and personal taxes. It was also agreed between ONGC and non-resident company M/s Foster Wheeler Energy Ltd. UK that if any tax benefit is available to the consultant as a result of credits claimed of withholding taxes paid by ONGC, the same shall be passed on to ONGC by the consultant NRC. The relevant clause is being reproduced for the sake of clarity and transparency:- 11.0 Duties and Taxes 11.1 . Consultant shall bear all applicable taxes, duties, levies etc, including both corporate arid personnel taxes but not limited to taxes on income levi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 442. In the present case, as we have noted earlier that the ONGC filed original return and revised return as representative assessee of non-resident M/s Foster Wheeler Energy Ltd. voluntarily and adhering to clause 11 of the agreement between ONGC and M/s Foster Wheeler Energy Ltd., non-resident company and this act and conduct of the assessee ONGC clearly shows that the ONGC waived benefit of privilege available u/s 163(2) of the Act. In this situation, the assessee agent i.e. ONGC cannot turn around and raise an objection of failure to provide an opportunity of being heard u/s 163(2) of the Act as the circumstances clearly reveal that original return for the year under consideration as well as revised return under appeal was filed u/s 139 of the Act accepting the position of agent/representative assessee of non-resident company M/s Foster Wheeler Energy Ltd. UK remained unaltered. 16. We further hold that at the time of application of 147/148 of the Act for reassessment of non-resident through the agent/representative assessee, the facts and circumstances remained the same. In the light of well-accepted legal proposition that assessment includes reassessment it is not possibl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e but also carries ambiguity and misinterpretation of legal provisions of the Act and inconsistent with the ratio of the decision of Special Bench in the case of J.M. Baxi (supra) and, therefore, we set aside the same by holding that the notice issued to the assessee was well within the period prescribed under the Act. Accordingly, ground no. 1 and 2 of the revenue are allowed. Ground No.3 of the Revenue 20. Apropos ground no. 3, the ld. DR pointed out that the CIT(A) has also erred in not giving a finding on merits that the income of the assessee was in the nature of Technical Services being rendered and taxable as per provisions of the section 115A r/w section 9(1)(vii) of the Act by following the decision of ITAT I Bench Delhi dated 17.7.2014 in the case of CGG Marine SAS vs ADIT in ITA No.234/Del/2013 for AY 2005-06. Ld. Counsel of the assessee replied that when the notice u/s 148 of the Act was found to be issued beyond prescribed limit period, therefore, there was no necessity to adjudicate the other issues on merits. 21. On careful consideration of above submissions of both the parties, we are of the view that since by the earlier part of this order, we have decided ..... X X X X Extracts X X X X X X X X Extracts X X X X
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