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TMI Blog2019 (4) TMI 667X X X X Extracts X X X X X X X X Extracts X X X X ..... f cess and surcharge, in addition to the tax rate prescribed under the India UAE Double Taxation Avoidance Agreement, in our humble understanding, cannot be said to be lacking bonafides. Viewed thus, the CIT(A) was clearly in error in not condoning the delay in filing of appeal which was, in our humble understanding, a result of a bonafide, even if overoptimistic and erroneous, assessment about efficacy of section 154 to seek redressal of his grievance in question. The assessee had followed an inappropriate course, and, with the benefit of hindsight, there is no dispute about this error. The delay in filing of appeal before the CIT(A), against the assessment under section 143(3), therefore, indeed deserves to be condoned. We reverse the stand of the CIT(A) on this point. The order of the CIT(A) thus stands vacated. In this view of the matter, it is not even necessary to examine whether the time spent by the appellant in pursuing the remedy under section 154 is required to be excluded, under section 14(1) of the Limitations Act, in computation of time limit, and whether when that period is so excluded, whether the appellant can be found to be at fault so far as limitation aspect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) in the matter of assessment under section 143(3) of the Income Tax Act, 1961, for the assessment year 2012-13. 3. It is, at the outset, important to note the fact that the CIT(A) has summarily dismissed the appeal as time barred, and that he has declined to condone the delay in filing of appeal before him. The assessment order under section 143(3) in this case was passed on 31st March 2016. The assessee filed a rectification petition under section 154 in respect of levy of surcharge and cess on the tax rates prescribed under the tax treaties. The stand of the assessee was thus such a levy is a mistake apparent on record. The Assessing Officer rejected the said petition and held that there is no mistake apparent on record. Aggrieved, assessee carried the matter in appeal before the CIT(A) who declined relief to the assessee on the ground that it is a debatable issue and thus outside the scope of inherently limited scope of Section 154. This order was passed on 22nd September 2017 by the CIT(A), and served on the assessee on 24th November 2017. It was within 29 days of receiving this order that the assessee filed the appeal before the CIT(A) on 27th December 2017. The CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it . It is also only elementary that while interpreting a statutory provision one has to go from red to the black ( a rubro ad nigrum) which essentially lays down the principle that the heading must hold key to the text. Translated literally, the latin maxim a rubro ad nigrum implies that one has to read from the red to the black; from the rubric or title of a statute, (which, in ancients times used to be written in red letters) to its body, which was in the ordinary black. The provisions of this exclusion clause are required to be interpreted in a liberal manner in consonance with the object indicated by the heading of the section. Essentially, therefore, when the delay in filing of an appeal is on account of the fact that the person filing the appeal was pursuing his case before the wrong forum, the scheme of law requires such a delay to be condoned. When we thus interpret the provisions of Section 14(1), there is no ambiguity about the scheme of things envisaged by this statutory provision. What es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in error in not condoning the delay in filing of appeal which was, in our humble understanding, a result of a bonafide, even if overoptimistic and erroneous, assessment about efficacy of section 154 to seek redressal of his grievance in question. The assessee had followed an inappropriate course, and, with the benefit of hindsight, there is no dispute about this error. The delay in filing of appeal before the CIT(A), against the assessment under section 143(3), therefore, indeed deserves to be condoned. We reverse the stand of the CIT(A) on this point. The order of the CIT(A) thus stands vacated. In this view of the matter, it is not even necessary to examine whether the time spent by the appellant in pursuing the remedy under section 154 is required to be excluded, under section 14(1) of the Limitations Act, in computation of time limit, and whether when that period is so excluded, whether the appellant can be found to be at fault so far as limitation aspect is concerned. Let us now take up the issue in appeal on merits. 6 The assessee before us is a company fiscally domiciled in, and tax resident of, the United Arab Emirates. During the relevant previous year, the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Agreement in addition to, or in place of, the taxes referred to in paragraph 1. The competent authorities of the Contracting States shall notify each other of any substantial changes which are made in their respective taxation laws. ARTICLE 11 : INTEREST 1. Interest arising in a Contracting State and paid to a resident of the other Contracting State may be taxed in that other State. 2. However, such interest may also be taxed in the Contracting State in which it arises, and according to the laws of that State, but if the beneficial owner of the interest is a resident of the other Contracting State, the tax so charged shall not exceed : ( a) 10 per cent of the gross amount of the interest if such interest is paid on a loan granted by a bank carrying on a bona fide banking business or by a similar financial institution (including an insurance company) ; ( b) 15 per cent of the gross amount of the interest in all other cases. ( remaining portion of this article is not relevant for the present purposes) ARTICLE 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onclusion that education cess is nothing but an additional surcharge, it is only corollary thereto that the education cess will also be covered by the scope of Article 2. Accordingly, the provisions of Articles 11 and 12 must find precedence over the provisions of the Income Tax Act and restrict the taxability, whether in respect of income tax or surcharge or additional surcharge whatever name called, at the rates specified in the respective article. In any case, education cess was introduced by the Finance Act 2004, with effect from assessment year 2005-06 which was much after the signing of India Singapore tax treaty on 24th January 1994. In view of the specific provisions to the effect that the scope of Article 2 shall also cover any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Agreement in addition to, or in place of, the taxes referred to in paragraph 1 , and in view of the fact that education cess is essentially of the same nature as surcharge, being an additional surcharge, the scope of article 2 also extends to the education cess. 9. The view so taken by the coordinate bench, with w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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