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TMI Blog2016 (1) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeded for reassessment of the case without issuing a notice U/S 143(2) of the Act and Ld. CIT(A) has also lost sight of this fact while passing the impugned order. In the light of factual matrix discussed in the preceding paragraphs, it is proved on record that the Assessing Officer does not have jurisdiction to reopen the assessment - Decided in favour of the assessee. Services rendered in the nature of technical and professional - whether the same are covered under Article 12 of DTAA between India and Netherlands - whether the service rendered is also covered u/s 9(J)(vii)? - Held that:- The Coordinate Bench in assessee's own case, in the light of the provisions contained under DTAA came to the conclusion that ground handling services and technical services rendered by another airline at Indian airport, would be considered a part of operation of aircraft in the international traffic. The aforesaid decision of the coordinate bench squarely applies to the facts and circumstances of the present case. Ld. D.R. has failed to bring on record any reason to deviate from the order passed by the Tribunal in assessee's own case in the subsequent year. - I.T.A. No. 1259/Del/2009, I.T.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciate that Ld. Assessing had grossly erred in not appreciating that the Ld. Assessing officer had failed to pass an speaking order to the objections filed by the assessee challenging the validity of the notice issued U/S 1471148. Not Pressed. 5. That the Ld Commissioner of Income Tax (Appeal) has failed to appreciate that the Ld. Assessing officer had framed the assessment order without issuance of the statutory notice U/S 143 (2) to the assessee and merely because the counsels for the assessee had participated in the assessment proceeding it could not have been said that the requirement of section 143(2) had been complied with and had been satisfied. 6. That the Ld. Commissioner of Income Tax (Appeal) has failed to appreciate that Ld. Assessing had grossly erred in not appreciating that the services rendered by the assessee were directly connected with the operation of aircraft in International Traffic covered under Article 8 of the DT AA and could be said to be in the nature of fee for technical services under article 12 of the DT AA between India and Netherlands. 7. That the Ld Commissioner of Income Tax (Appeal) has erred in holding that the revenue earned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of facts and circumstances of the case and orders of tax authorities below. 8. Grounds No.1, 2,3 5 ofI.T.A. No. 13921De1l2009: To decide the moot point, the first question arises for determination in this case is, as to whether the Assessing Officer has no reason/tangible material to assume jurisdiction u/s 148 of the Act . Undisputedly, reopening of the assessment of the assessee's cases of preceding and succeeding years, except Assessment Year 2000-01 have already been dropped the assessment order dated 31.03.2005 for Assessment Year 2000-01 has been passed by the Assessing Officer by reopening the assessment on the basis of original return filed on 25.02.2004; the assessee has shown its entire income as exempt income and a note to the effect that entire income is exempt from taxation u/s 90 of the I. T. Act read with Article 8 of DTAA between India and Netherlands has been given on relevant return of income . 9. Ld. D .R. challenging the impugned order, contended inter alia that Ld. CIT(A) has erred in directing the Assessing Officer to tax Fee for Technical Services (FTS) as per DT AA by ignoring the fact that FTS is effectively connected to the Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional High Court has also followed its own decision rendered in the case entitled CIT Vs Orient Craft Ltd., the operative part of the judgement (supra) is reproduced as under: The argument of the revenue that an intimation cannot be equated to an assessment, relying upon certain observations of the Supreme Court in Rajesh Jhaveri (supra) would also appear to be self-defeating, because if an intimation is not an assessment then it can never be subjected to Section 147 proceedings, for, that section covers only an assessment and we wonder if the revenue would be prepared to concede that position. It is nobody's case that an intimation cannot be subjected to Section 147 proceedings; all that is contended by the assessee, and quite rightly, is that if the revenue wants to invoke Section 147 it should play by the rules of that section and cannot bog down. In other words, the expression reason to believe cannot have two different standards or sets of meaning, one applicable where the assessment was earlier made under Section 143(3) and another applicable where an intimation was earlier issued under Section 143(1). It follows that it is open to the assessee to co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered u/s 9(J)(vii) of the Income tax Act, 1961. During the relevant F. Y. the assessee company has Permanent Establishment in India. Also the services were rendered in territory of India in the normal course of business activity. Therefore, relying on the decision of AAR in the case of MIs. Ericsson Telephone Corporation India, AB Vs CIT (1996), the fee received will be taxed U/S 44D read with Section 115A of the Act. As the agreement was entered prior to 3Ft May, 1997 the fee received was liable to tax @ 30% on gross basis. 15. Ld. A.R. relied upon the order dated 19.11.2010 passed by Income tax Appellate Tribunal Delhi Bench 'D', New Delhi in the case entitled as CIT Vs KLM Royal Dutch Airlines in I.T.A. NosA03 and 404IDe1l2010 and contended that the issue in controversy is duly covered under the same. To repel this argument, Ld. D.R. has failed to bring on record any decision contrary to it. The sole issue required to be determined in this case is, as to whether the revenue earned by the assessee was to be treated as FTS as per DTAA . 16. Ld. CIT(A) by overturning the findings returned by the Assessing Officer, came to the conclusion that, even though t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s in flight operation and received fee of US$ 1,00,0001- for two years under the agreement during the relevant financial yeas 1998-99 and 1999-2000. Assessing Officer taxed the amount of US$ 1,00,000/- u/s 44D read with Section 1l5A of the Act, whereas Ld. CIT(A) directed the Assessing Officer to tax FTS as per DTAA. 18. The Coordinate Bench in assessee's own case, in the light of the provisions contained under DTAA came to the conclusion that ground handling services and technical services rendered by another airline at Indian airport, would be considered a part of operation of aircraft in the international traffic. The aforesaid decision of the coordinate bench squarely applies to the facts and circumstances of the present case. Ld. D.R. has failed to bring on record any reason to deviate from the order passed by the Tribunal in assessee's own case in the subsequent year. 19. Ground No.8 of appeal No.1392/Del/2009: The Assessing Officer vide assessment order dated 31.03.2005 qua Assessment Year 2000-01 assessed the total income at ₹ 36,05,000/- and taxed @ 30% i.e. ₹ 1 0,81 ,5001-, to be recovered along with interest u/s 234 of the Act and these f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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