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TMI Blog2017 (3) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... mmission and the assessee replied the same. Therefore, it cannot be inferred that the materials facts related to the payments of commission was not before Assessing Officer during the original assessment proceedings. The basis for reopening is admittedly the circular dated 22/10/2009 which was not having retrospective effects as held by the Hon’ble Jurisdictional High Court in the case of CIT Vs. Modern Insulators (2014 (10) TMI 748 - RAJASTHAN HIGH COURT ) wherein it has been held that the circular no. 7 dated 22/10/2009 cannot be considered retrospectively to make it applicable to make payment before that date - Decided in favour of assessee X X X X Extracts X X X X X X X X Extracts X X X X ..... fore ld. CIT(A) wherein the assessee had challenged to reopening of the assessment. The ld. CIT however granted relief by holding that there is no law to deduct tax at source on commission under section 195 or chapter XVII-B of the IT Act,1961. 3.1 However, the Ld. CIT(A) rejected the grounds challenging for the reopening of the assessment against both these revenue and assessee have challenged by filing appeal before this Tribunal. The Ld. Counsel for the assessee reiterated the submissions as made in the written submissions. He submitted that the reassessment was made after expiry four years. Therefore, it was incumbent upon the assessing officer to demonstrate that assessee has failed to disclose fully and truly all materials facts nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Therefore, it cannot be inferred that the materials facts related to the payments of commission was not before Assessing Officer during the original assessment proceedings. The basis for reopening is admittedly the circular dated 22/10/2009 which was not having retrospective effects as held by the Hon'ble Jurisdictional High Court in the case of CIT Vs. Modern Insulators(supra) wherein the Hon'ble High Court has held as under: "From a perusal of relevant paragraph 2 of the aforesaid circular, it clearly specifies that the question of deduction of tax at source under section 195 would arise only if the payment of commissioner to a non-resident is chargeable to tax in India the fact that the said payment was remitted directly abroad and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are of the considered view that the assessing officer was not justified for reopening the assessment. Therefore, we hereby quash the assessment order dated 10/3/2015. The ground raised in this appeal are allowed. The appeal of the assessee is allowed. 4. Now, we take up the Revenue's Appeal in ITA No 970/JP/2016, pertaining to the assessment year 2008-09. The revenue has raised followings grounds of appeal: 1. "Whether on the facts and circumstances of the case and in law, ld. CIT(A) has erred in deleting addition made by the AO u/ 40(a)(ia) of the Act though the assessee was required to deduct TDS as per provisions of the section 195 of the Act and income is chargeable to tax u/s 9 o the IT Act. 2. The appellant craves its rights t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that the said payment was remitted directly abroad and it cannot be held to have been received on or on behalf of the agent in India. It is a finding by the two appellate authorities that the commission pay abroad is not chargeable to tax in India under the Income-tax Act. Circular No.7, dated October 22, 2009, in our view, cannot be considered retrospectively to make it applicable for payments made before that date. The Income-tax Appellate Tribunal has also held that the above non-residents/foreign agents have provided services for earning commission and the services have been rendered outside India, the commission so earned by the non-resident is a business profit. As per the DTAA between India and the UK and the DTAA between India ..... X X X X Extracts X X X X X X X X Extracts X X X X
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