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TMI Blog2016 (4) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 r.w.s. 143(3) of the Act, the clauses of the agreement with the customer was examined in detail to hold that the revenues earned under the said agreement falls within the taxable ambit of royalty as defined under section 9(1)(vi) of the Act as well as Article 12 of the India USA DTAA. Therefore, such royalty income was subject to tax @ 15% and even though PE was also alleged and Article 7 read with section 44D was not invoked. This fact in itself makes it clear that it was well within the knowledge of the Ld. AO that the said agreement has been entered before 31.03.2003 for invoking section 44D of the Act. For this reason alone, initiation of reopening of assessment U/S 147 of the Act for this assessment year beyond four years is not found to be sustainable both in facts and law as the case falls within the first proviso to section 147 of the Act. - Decided in favour of assessee - ITA No.6355/Del./2013 - - - Dated:- 4-3-2016 - SHRI J.S. REDDY, ACCOUNTANT MEMBER AND SHRI A.T. VARKEY, JUDICIAL MEMBER, JJ. For The Assessee : Shri Pawan Kumar and Arvind Rajan, CA For The Revenue : Shri S.K. Jain, DR ORDER PER A.T. VARKEY, JUDICIAL MEMBER : This is revenue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as passed holding that the receipts earned by the assessee from provision of satellite transmission services are liable to tax in India as royalties for use of process as well as equipment falling within the ambit of section 9(1)(vi) of the Act and article 12 of the India-USA DTAA. It was further held that the assessee has a fixed place PE in India in the form of an office in New Delhi and a master control facility at Hassan in South India. Furthermore, that the customer of the assessee constitutes dependent agent PE of AAP in India as per the provisions of Article 5(4) of India US DTAA. Consequently, income was assessed at ₹ 7,05,24,639/- taxable under Article 12 of the India-USA DTAA as being royalties. On the aspect of income attributable to PE, it was held that income would be such on which tax would come to be 15% of gross receipts. Hence, the total income was subject to tax on a gross basis at the rate of 15%. The assessee preferred an appeal against this assessment order before the Ld. CIT(A). 3.4. Subsequently, a notice dated 31.03.2010 U/S 148 of the Act was issued by the Ld. AO for the purported reason of taxing the royalty income at a higher rate of tax of 20% a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to incometax; (b) where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return ; (c) Where an assessment has been made, but- (i) Income chargeable to tax has been under assessed; or (ii) Such income has been assessed at too low a rate; or (iii) Such income has been made the subject of excessive relief under this Act; or (iv) Excessive loss or depreciation allowance or any other allowance under this Act has been computed In view of the above, I have reason to believe that the income of the assessee for the AY 2003-04 chargeable to tax has escaped assessment. In this case, not more than 6 years have elapsed from the end of the relevant Asstt. Year (i.e. AY 2003-04) and income of more than 1 Lakh has escaped assessment, therefore, the notice under section 148 read with section 147 of the IT Act, 1961 satisfies the time ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment itself. So he does not want us to interfere in the impugned order of the ld. CIT (A). 8. We have heard both the parties and perused the records. Further, there is no dispute as to the fact that notice for reopening was issued four years after end of the relevant assessment year, so 1st Proviso to section 147 needs to be satisfied before issuance of notice u/s 147/148. For ready reference, 1st Proviso to section 147 is reproduced below :- Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s 139 or in response to a notice issued under subsection (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary (or his assessment, (or that assessment year From the perusal of the aforesaid section it can be seen that, in order to assume jurisdiction u/s 147, in a case where assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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