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TMI Blog2020 (12) TMI 570X X X X Extracts X X X X X X X X Extracts X X X X ..... dings initiated by revenue under said provision is in accordance with parameters of said section? (ii) Whether in the facts and circumstances of the case, the tribunal is justified in law in holding that the assessee cannot be held as 'assessee in default' under Section 201(1A) of I.T.Act even when the proceedings initiated by revenue under said provision is in accordance with parameters of said section? (iii) Whether on the facts and circumstances of the case, the tribunal is right in holding that the payments made by assessee to Abbey National Plc, UK are not liable for deduction of TDS under Section 195 of the I.T. Act and as such invoking of Section 40(a)(i) by assessing authority is not proper even when the nature of transactions and materials available on record established that payments made by assessee to Abbey National Plc, UK, can be categorized as 'fees for technical services' under Section 9(1)(vii) of the Act' and as such liable for deduction of TDS under Section 195 of the Act? (iv) Whether on the facts and circumstances of the case, the tribunal is right in law in holding that the assessee cannot be held as 'assessee in default under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax who rejected the petition preferred by the assessee. 3. Thereafter, the Assessing Officer heard the assessee and found that assessee had deducted tax only on an amount of Rs. 16,62,04,340/- and did not deduct the tax on the balance amount of Rs. 10,91,02,724/-. The Assessing Officer vide order dated 07.07.2010 inter alia held that as per the agreement, the employees of ANP were seconded to India who were highly skilled in technical personnel and ANP had agreed to provide training to some of the employee of MSourcE. It was further held that the assessee's claim that there was nexus between ANP and the provision of services rendered by the expatriates is not correct as the employees were on the payroll of ANP and ANP was involved in providing technical services. The Assessing Officer held that amount of Rs. 10,91,02,724/- was towards payment of 'fees for technical services' as per Section 9(i)(vii) of the Act, Explanation 2 and Article 13(4)(c) of Indo-UK Double Taxation Avoidance Agreement (hereinafter referred to as 'the DTAA' for short). 4. Being aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) who by an order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24 and 30 and 32 respectively. 6. It is also urged that the tribunal ought to have appreciated that the order under Section 201 is strictly in conformity with Section 201 of the Act and the Assessing Officer was well within his jurisdiction to pass such an order. It is also pointed out that the order dated 18.07.2012 passed by the tribunal in I.T.A.No.1141(B)/2010 in case of the assessee by the tribunal is subject matter of appeal filed by the revenue before this court viz., I.T.A.No.420/2015 and the fate of the aforesaid appeal would depend on the decision taken by this court in this appeal. It is therefore urged that in view of decision of Delhi High Court in M/S CENTRICA INDIA OFFSHORE PVT. LTD. supra the substantial questions of law framed in this appeal deserve to be answered in favour of the revenue. 7. On the other hand, learned counsel for the assessee at the outset submitted that the order passed by the Assessing Officer is per se without jurisdiction as the Assessing Officer has assumed jurisdiction under Section 201(1A) of the Act while examining the issue in the light of the order passed by the Director of Income Tax in the context of Section 195(2) of the Act. It i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... OF 2016 (BOMBAY), 'DIT VS. HCL INFOSYSTEM LTD', (2005) 274 ITR 261 (DELHI), ' CIT VS. DE BEERS INDIA MINERALS (P.) LTD.', (2012) 346 ITR 467 (KAR), ' IDS SOFTWARE SOLUTTIONS (INDIA)(P.) LTD. VS. ITO', (2009) 122 TTJ 410 (BANGALORE) & 'DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION) VS. MORGAN STANLEY & CO.', (2007) 292 ITR 416 (SC). 9. We have considered the submissions made by learned counsel for the parties and have perused the record. Before proceeding further, it is apposite to take note of Section 9(i)(vii) and Section 195(1) of the Act, which is reproduced below for the facility of reference: 9(i)(vii) income by way of fees for technical services13 payable by- (a) the Government ; or (b) a person who is a resident, except where the fees are payable in respect of services utilised in a business or profession carried on by such person outside India or for the purposes of making or earning any income from any source outside India ; or (c) a person who is a non-resident, where the fees are payable in respect of services utilised in a business or profession carried on by such person in India or for the purposes of making or earning an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apply if the beneficial owner of the royalties or fees for technical services, being a resident of a Contracting State, carries on business in the other Contracting State in which the royalties or fees for technical services arise through a permanent establishment situated therein, or performs in that other State independent personal services from a fixed base situated therein, and the right, property or contract in respect of which the royalties or fees for technical services are paid is effectively connected with such permanent establishment or fixed base. 11. Now we may advert to the facts of the case in hand. From perusal of the relevant clauses of the agreement as well as the nature of services provided by the assessee under the agreement, it is evident that the assessee had entered into a secondment agreement for securing services to assist assessee in its business. The expenses incurred by the seconded employees which were reimbursed by the assessee is not liable to deduction to tax at source and the aforesaid amount could not be considered as 'fees for technical services'. It is also pertinent to note that secondment agreement constitutes an independent contract ..... X X X X Extracts X X X X X X X X Extracts X X X X
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