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TMI Blog2019 (11) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of ONGC is not maintainable. Commissioner (Appeals), in our view, was not competent under the provisions of section 246A of the Act to entertain such an appeal. We, therefore, set aside the impugned order passed by the learned Commissioner (Appeals) and restore the order of the Assessing Officer under section 195(2). - Decided in favour of revenue - ITA no.2130/Mum./2016 - - - Dated:- 25-10-2019 - Shri Saktijit Dey, Judicial Member And Shri Manoj Kumar Aggarwal, Accountant Member For the Assessee : None For the Revenue : Shri O.P. Meena ORDER PER SAKTIJIT DEY. J.M. Captioned appeal has been filed by the Revenue challenging the order dated 30th November 2015, passed by the learned Commissioner of Income Tax (Appeals) 55, Mumbai, for the assessment year 2014 15. 2. The effective grounds raised are as under: 1. On the facts and in the circumstances of the case and in law, the Id. CIT(A) has erred in adjudicating the appeal filed by M/s. Abu Dhabi Ship Building PJSC who is not Applicant of the adjudicating the appeal filed by M/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant to the assessment year 2013 14. Against the order passed directing withholding of tax, ONGC did not prefer any appeal but the respondent company preferred appeal before the first appellate authority, which was decided in its favour by holding that the income of the respondent company is not taxable in India. Based on the aforesaid decision of learned Commissioner (Appeals), ONGC again filed an application seeking an order to allow payment to be made to the respondent company without deducting tax or deducting tax at lower rate for the payments to be made in the financial year 2013 14 corresponding to assessment year 2014 15. However, the Assessing Officer rejected the application filed by the ONGC and directed it to withhold tax as per applicable rate. Against the said order, respondent company preferred appeal before the first appellate authority. The learned Commissioner (Appeals), following the order passed by him in the assessment year 2013 14 in assessee s own case, allowed the claim of the respondent company holding that its income is not taxable in India, therefore, ONGC is not liable to withhold tax in respect of payments to be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority, it is necessary to look into some of the statutory provisions which has relevance to the issue at hand. Section 195 of the Act mandates that a person responsible for paying to a non resident or a foreign company any interest or any other sum chargeable under the provisions of the Act except salary, at the time of credit of such income to the account of the payee or at the time of payment in cash, cheque or demand draft or by any other mode shall deduct income tax at source at the prescribed rate. However, sub section (2) of section 195 provides that if the payer / deductor paying any sum to the non resident considers that the whole of such sum would not be income chargeable of the recipient he can make an application to the Assessing Officer to determine by an order the appropriate portion of such sum chargeable to tax so that tax shall be deducted on such proportion of the sum determined as chargeable to tax. Sub section (3) of section 195 also provides an option to the recipient of income to make an application in the prescribed manner to the Assessing Officer for grant of a certificate authorising him to receive such interest or other sum without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is the contention of the learned Authorised Representative appearing for the assessee that the expression an order against the assessee where the assessee denies his liability to be assessed under this Act used in clause (a) of section 246A(1) enables the assessee to file appeal against the order under section 195(2) before the learned Commissioner (Appeals). However, we are not impressed with the aforesaid contention of the learned Authorised Representative. The expression, an order against the assessee where the assessee denies his liability to be assessed under this Act cannot be considered in isolation but has to be read not only in the context of the provisions contained under section 246A of the Act but other provisions of the Act also. If we read the provisions of section 246A as a whole, it would emerge that the order appealed against must be an order against the assessee determining its liability to be assessed under the Act. In the present case, the order passed u/s 195(2) admittedly is not against the assessee but against ONGC. Moreover, the liability of the assessee to be assessed under the Act can only be determined in an assessment proceeding and not under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned Authorised Representative. 16. In the case of M. Pyngrope (supra), the assessee had filed return of income under section 139 declaring certain income. The Assessing Officer processed the return of income under section 143(1) of the Act and determined the tax payable. Against the order under section 143(1), assessee filed an appeal before the first appellate authority claiming that his income is exempt under section 10(26). The learned Commissioner (Appeals) entertaining the appeal of the assessee, allowed his claim. The Department challenged the decision of the learned Commissioner (Appeals) before the Tribunal raising the issue of maintainability of the appeal. However, the Tribunal upheld the order of the learned Commissioner (Appeals) by holding that the appeal is in respect of an order against the assessee where the assessee denies his liability to assessee under the Act. In the present case, the order passed under section 195(2) is not against the assessee. Therefore, this decision is not applicable to the facts of the present case. 17. In the case of M. Anandan (supra), the facts are almost simil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nate shares in the income but the Tribunal had no power under the Act to direct the ITO to exercise his power in one way or other. When the matter went in reference to the High Court, the High Court held that the Appellate Tribunal has jurisdiction to give directions to appropriate authority to cancel the assessment made on the AOP and make a fresh assessment on the members of that association independently. Thus, as could be seen, the issue in the aforesaid decision was in relation to powers of the Appellate Authority. Moreover, the order appealed against before the first appellate authority and the Tribunal was passed against the assessee and not against a third person. Therefore, in these circumstances, we are of the view that these decisions are of no help to the assessee not only because of the fact that in all these cases, orders were passed directly against the assessee determining a liability under the Act but the assessees have denied their liability. Whereas, in the appeal before us, the order appealed against is an order passed under section 195(2) against ONGC requiring it to deduct tax at source on payments made to the assessee. Further, there is no final determination ..... X X X X Extracts X X X X X X X X Extracts X X X X
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