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TMI Blog2018 (9) TMI 231X X X X Extracts X X X X X X X X Extracts X X X X ..... es of the case and in law, the Tribunal was justified in remanding the matter back to Assessing officer for fresh consideration when the Assessing officer has not discharged the burden of proving that the Appellant had a PE in India?" 4 By these Appeals, the Assessee-Appellant has challenged the order passed by the Income Tax Appellate Tribunal Bench at Mumbai in three Appeals. The orders have been passed on 1st April, 2015 for the Assessment Years 2002-2003, 2003- 2004 and 2005-2006. 5. During the pendency of these Appeals, this Court noted that there were applications filed for rectification of the mistake in the order passed by the Tribunal. Noting that fact on 9th April, 2018, this Court passed the following order:- "These Appeals under Section 260-A of the Income Tax Act,1961 (the Act), challenge the order dated 1.4.2015 passed by the Income Tax Appellate Tribunal (the Tribunal). The impugned order dated 1.4.2015 relates to Assessment Years 2002-03, 2003-04 and 2005- 06. 2. The basic issue urged by the Appellant before us is that whether the Tribunal was justified in restoring the matter to the Assessing Officer even when all material was available before the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antee commission in the sum mentioned in the Appeal Memo before this Court, and particularly, in paragraphs 2.1 to 2.3. 11. It is then claimed that a return of income was filed for the assessment year 2002-2003 declaring Nil income. The amounts received under the aforesaid category were not offered to tax in India on the ground that the Assessee-Appellant does not have a permanent establishment in India within the meaning of Article (5) of the DTAA. 12. As far as the Assessing Officer is concerned, an order came to be passed by him on 28th March, 2005 holding that the Indian Company Rabo India Finance Private Limited is a permanent establishment of the Appellant-Assessee within the meaning of the above Article and particularly Article 5 (5) of the DTAA. Hence, certain percentage of the sums under the category referred above were taken as profits attributable to the permanent establishment. A further percentage from that was taken as a profits chargeable to tax in India. This resulted in the return depicting total income to Rs. 31,25,060/- 13 Aggrieved by this assessment order, the matter was carried in Appeal to the Commissioner of Income Tax (Appeals). He passed a detailed orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not call for a remand report from the AO in that regard. The role of expatriate Director deputed to India has not been inquired into. What were his duties and what function actually he had performed, is not known. Similarly, the circumstances in which guarantee commission was paid by RI to the assessee are not discussed by the FAA. The circumstances, under which RI for approached the assessee which entitled it to get roughly one third of the commission, are not known. In short, the appeal has been decided by discussing the principles governing DTAA and not mentioning as to how those principles were applicable to the facts of the case. In our opinion, the matter needs further investigation. Therefore, in the interest of justice, the matter is restored back to the file of the AO to determine the issue afresh after affording a reasonable opportunity of hearing to the assessee. Third ground of appeal filed by the AO is allowed in his favour, in part. ITA/3633 & 5056/Mum/2007 & 2010, AY.s. 2003-04 & 2005-06 The facts and circumstances of the cases are identical to the facts of the year 2001-02. As we have already restored back the issue to the file of the AO for fresh adjudicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous Applications, there were indeed on record, the documents and Mr. Sheth tenders a compilation before us and says that with the Miscellaneous Applications, the documents have indeed been tendered in triplicate. There is an acknowledgement to that effect. 19. Thus, according to Mr. Sheth, on the date when the Miscellaneous Applications for rectification of the mistakes were taken up, there was indeed a record of the transactions and if at all the Tribunal was inclined to examine them, they could have done so. However, they committed a further mistake by not deciding the matter fully. At least, in this round they could have corrected their mistake. 20. It is in these circumstances he would submit that above projected questions are substantial questions of law. 21. Mrs. Bharucha appearing on behalf of the Revenue though not disputing that a rectification application was indeed filed and some documents were tendered during the course of its pendency, would urge that these are pure findings of fact and no prejudice will cause by mere a remand back to the Assessing Officer. She would submit that the questions projected are not substantial questions of law. Hence, the Appeals be dism ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the First Appellate Authority and argued that the concept of fixed place, permanent establishment requires the enterprises to have their business or a place of management/branch in India or office in India and the Assesee had neither. 25. The activities of the Indian company did not result in constitution of any agency or permanent establishment of the Assessee and that the Indian company did not have any authority to conclude the contract on behalf of the Assesee, that it did not maintain any stock of any goods or merchandise of the Assessee nor did it secure any orders from the Assessee that it was economically and legally independent, that it was acting in ordinary course of its business not dependent on the Assessee. During the year under Appeal, the Indian company had income from various sources amounting to Rs. 1386.70 Millions. The Assessee received professional income and guarantee commission. There was also certain reimbursement of expenses by the Indian company. 26. In the backdrop of all this, and further facts noted, a cryptic order has been passed by the Tribunal. In fact, in paragraph 5 of the order under challenge in reference to the Income Tax Appeal No. 4632/MU ..... 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