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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 ..... one, we are of the firm opinion that the Tribunal failed to act as a last fact finding authority. It failed to discharge its duty and function expected of it by the law. Answering question nos.1 and 2 as reproduced above in favour of the Assessee and against the Revenue. - Income Tax Appeal No. 1198 OF 2015 With Income Tax Appeal No. 260 of 2016 With Income Tax Appeal No. 264 of 2016 - - - Dated:- 29-8-2018 - S.C. DHARMADHIKARI B. P. COLABAWALLA, JJ. Mr. Niraj Sheth a/w Mr. Atul K. Jasani, for the Appellant. Mrs. S. V. Bharucha, for the Respondent. ORAL JUDGMENT:(Per S. C. DHARMADHIKARI, J.) These Appeals involve common questions of law. They were heard together and can be conveniently disposed off by a common order. 2 Admit. 3. By consent heard finally on the following substantial questions of law, which found at page 24 of the paper book in Income Tax Appeal No. 1198 of 2015. They read as under:- (i): Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in not concluding that the Appellant does not have a Permanent Establishment in India and instead setting aside the order of the CIT (A)? (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant would submit that the Tribunal should not have remanded the matter back to the lower authorities for the simple reason that the entire material was indeed before the authorities. 10. The facts are that the Appellant is a tax resident of Netherlands and is entitled to claim the benefit of the Double Tax Avoidance Agreement (for short DTAA ) between India and Netherlands. In fact, the Rabo bank group is a group, of which the Appellant is part and parcel. An Indian company, the Rabo India Finance Private Limited is registered as a non-banking financial company with the Reserve Bank of India. It provides a wide range of financial services such as credit facilities, investment banking, strategic, financial and project advisory services. This company also belongs to the Rabo group. The Appellant is specialized in financing of food and agricultural business. It is claimed that both, the Appellant and the said Indian Company are independent entities but work together on select assignments as and when required. During the previous year relevant to the assessment year under consideration, the Appellant-Assessee claims to have provided assistance on principle to principle basis to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termine whether RI was an agent having independent status or was merely working on behalf of the assessee, as alleged by the AO. In absence of such basic material facts, it is not possible to come to a conclusion as to whether the assessee had PE in India or not. There is no material available on record to prove as to whether RI had significant independent activities on its own or not. The FAA, while allowing the appeal has dealt with the DTAA and held that provisions of Article 5 (1), 5 (2) of the DTAA of Indo-Netherland were not applicable. But, he has not discussed the actual work and the nature of the job done by the assessee for RI nor has he given the reasons as to how he arrived at the said conclusion. In our opinion, the assertion- that advisory services were rendered or that guarantee commission was received for the job outside India or that he was rendering services independently in itself-is not sufficient to prove or disprove the claim made by the assessee. Such a claim has to proved by facts. The agreements entered into by RI with outsiders and the agreements entered into by RI with the assessee have to examined to understand the real nature of the transaction. It also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ings have been rendered by the Commissioner without adverting to either the DTAA or relevant Articles thereof or some germane piece of evidence. Thus, the Tribunal should have decided the matter itself for the record was complete. 17. Surprisingly, in the rectification application when all this was brought to the notice of the Tribunal, the Tribunal concluded that the issue was rightly remitted to the Assessing Officer by inter alia observing that the quantum of work done, services rendered, the contract undertaken for outsiders would have to be examined to determine whether the Rabo Finance India Private Limited was an agent having independent status or was merely working on behalf of the Assessee as held by the Assessing Officer. Thus, these basic material facts were not there, and therefore, it is not possible to come to a conclusion either-way. Then, the Tribunal reiterated its earlier conclusion that the agreement entered into by Rabo Finance India Private Limited with outsiders and the agreement entered into by M/s. Rabo with the Assessee have to be examined to understand the real nature of the transaction. Thus, the First Appellate Authority did not call for remand rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vate. Based on these two contracts, the First Appellate Authority concluded that it cannot be said that Rabo India Finance Private Limited is acting as an agent of the Assessee. On the contrary, the agreements point towards the said Indian company obtaining independent contracts and subcontracting the part of the work thereunder to the Assessee. On each of the counts, namely, guarantee commission and other services, the First Appellate Authority has held that the Assessing Officer committed a mistake. The clear conclusion in this order is that the business profits of the Assessee are not taxable in India in absence of any permanent establishment in India within the meaning of Article 5 of the DTAA. 24. These very materials could have been examined by the Tribunal and it would have arrived at the satisfaction whether the Assessing Officer was correct or whether the First Appellate Authority was right in reversing the order of the Assessing Officer and holding as above in favour of the Appellant-Assessee. We do not see why, when the Tribunal refers to all the factual matters in paragraph 2 of its order and has in earlier paragraphs crystallized the issues, then, what was the occas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deems it fit and proper to remand the case. If there was indeed no material on record, then, the above conclusion was impossible to be reached. 27. Be that as it may, we do not wish to express any opinion on the rival contentions for it may prejudice both sides. In fact, resorting to such shortcuts, results in wastage of precious judicial time of the Tribunal as also Higher courts and delaying the collection and recovery of Revenue, if any. It only enables the parties to postpone the inevitable. It also results in uncertainty and chaos. Judicial decisions have to be consistent and all the more there should be no confusion. There ought to be some predictability and when given facts and circumstances give rise to certain legal principles which parties assert are applicable, then, as a last fact finding authority, the Tribunal could have summoned all records and thereafter should have arrived at a categorical conclusion whether the First Appellate Authority was right or the Assessing Officer. This having admittedly not been done, we are of the firm opinion that the Tribunal failed to act as a last fact finding authority. It failed to discharge its duty and function expected of it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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