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TMI Blog2021 (5) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... pts could never have been raised. Nevertheless, the basis for CASS selection and the specific questions raised in the questionnaire dated October 23, 2017 vividly show that the issue as involved in the present applications were already pending before the Income-tax authority. Thus is found that the issue involved in the questions raised in the two applications filed before us was already pending before the Income-tax authority and the bar in terms of clause (i) of the proviso to section 245R(2) is found attracted in these cases. Therefore, both the applications are not admitted and consequently rejected. - A.A.R. Nos. 11 And 12 of 2018 - - - Dated:- 25-1-2021 - Narendra Prasad Sinha Chairman (In-Charge) And Ramayan Yadav Member Law For the Applicant : Vishal Kalra , Advocate, and Ms. Sumisha Murgai , Chartered Accountant For the Department : Anurag Prasad , Commissioner of Income-tax (Departmental representative) and Smt. Radha Katyal Narang , Additional Commissioner of Income-tax RULING 1. Whessoe Engineering Ltd. (the applicant) is a company incorporated in U.K. and engaged in the business of providing technical services in connection with hydr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that as per this agreement the applicant was required to provide technical review services from outside India in relation to construction of the facilities by Reliance and its local contractors based in India. Further, that the services were provided entirely from outside India (i. e. U.K.), except for occasional short visits of employees for attending review meetings and for high level review of third-party Indian contractors work etc. The applicant has raised the following question in respect of PTC agreement with Reliance in this application : Question 1. Whether, on the stated facts and in law, the sum received by the applicant under the project technical consulting ser vices agreement, for rendering services to Reliance Industries Limited, are not liable to tax as fee for technical services ('FTS') under article 13 of the India-UK Double Taxation Avoidance Agreement ('DTAA') in the absence of a permanent establishment ('PE') in India ? As the questions raised in the two applications are identical and in respect of taxability of offshore services, they are taken up for disposal vide this common order. 4. The CIT's report has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer. 5. The learned authorised representative for the applicant submitted that mere disclosure of the amount of TDS deducted by the payers in respect of income received during the year in the return of income (ROI) and claiming refund in respect of same does not lead to a conclusion that the issues raised in the applications were already pending. According to him the question can be said to be pending only when the lower authorities had raised specific similar question. He submitted that mere filing of return of income and claiming refund in respect of tax deducted will not tantamount that the question raised in the applications before the Authority for Advance Rulings were pending before the Income-tax authorities. Reliance in this regard was placed on the decision of the hon'ble Delhi High Court in the case of Hyosung Corporation v. AAR [2016] 382 ITR 371 (Delhi). The learned authorised representative explained that return of income filed for the assessment year 2015-16 was only in respect of project office maintained by the applicant in relation to the contract with GSPC for provision of onshore services. According to the learned authorised representative the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vided that the Authority shall not allow the application where the question raised in the application,- (i) is already pending before any Income-tax authority or Appel late Tribunal except in the case of a resident applicant falling in sub-clause (iii) of clause (b) of section 245N or any court ; (ii) involves determination of fair market value of any property ; (iii) relates to a transaction or issue which is designed prima facie for the avoidance of Income-tax except in the case of a resident applicant falling in sub-clause (iii) of clause (b) of section 245N or in the case of an applicant falling in sub-clause (iiia) of clause (b) of section 245N : 7. There is no dispute to the facts of the case and the events, with their corresponding date, which are relevant for deciding the objections of the Revenue are as under : Sl. No. Date Event 1. 30-3-2017 Filing of return for the assessment year 2015-16 by the applicant. 2. 19-9-2017 Issue of notice under section 143(2). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... S the following receipts and tax deductions are found reflected : Sl. No. Name of deductor Section Total amount paid/credited Total tax deducted 1 GSPC LNG Limited 195 17,97,67,952 1,94,42,324 2. Reliance Industries Limited 195 3,48,37,816.93 43,37,320 Total 21,46,05,768.93 2,37,79,662 In the return of income the applicant had claimed credit for TDS of ₹ 1,98,89,409 in respect of GSPC LNG Ltd. and of ₹ 43,37,320 in respect of Reliance Industries Ltd. and the total TDS credit claimed was ₹ 2,42,26,729 which was higher than the total TDS of ₹ 2,37,79,662 as reflected in form 26AS. On the other hand total turnover disclosed in the return of income was ₹ 3,16,12,190 only as against total receipt of ₹ 21,46,05,768.93 as appearing in form 26AS. This mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were provided. As already mentioned earlier, the contract of the applicant with Reliance stipulated that there would be occasional short visits of employees for attending meetings with Indian contractors. Thus, this question is found relevant with the PTC agreement with Reliance but the details as requisition were never provided. As per the notice under section 142(1) the applicant was required to furnish these details on November 13, 2017. However, there was no compliance by the applicant to any of the notices and the information and details as requisitioned vide questionnaire was never filed before the Assessing Officer. Thereafter, the Transfer Pricing Officer had also issued a notice dated March 27, 2018 wherein copies of relevant agreements in respect of international transactions were called for. It is apparent from the notice under section 142(1) and the questionnaire that the issue of technical agreements entered into by the applicant with Indian customers was already pending with the Assessing Officer before the filing of the pre sent two applications before this authority. 10. The contention of the applicant is that mere disclosure of TDS deducted by the payers in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the applications filed before this authority was subject matter of pendency before the Assessing Officer or not. The question of pendency will arise only in a case where the application is filed after issue of scrutiny notice by the Department. Therefore, what is relevant to consider is whether the issue involved in the questions raised in the application is subject matter of enquiry before the Assessing Officer. As the application in such cases is filed afterwards, an applicant can always para-phrase the question so as to make it appear different from the question raised by the Assessing Officer. There can never be exact replication of the question raised in the application with the question as raised by the Department and such replication can never be the intention of the Legislature while framing the bar in clause (i) of the proviso to section 245R(2) of the Act. What we have to consider is whether the issue germane to the question raised in the application filed before the authority was pending before any Income-tax authority or not. As mentioned earlier the applicant had claimed credit for TDS on offshore services in its return but the corresponding receipt was not disclo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerned, the notices were issued only on November 24, 2012 whereas the date of filing of the application before the Authority for Advance Rulings was September 23, 2011. In the present case also the notice under section 142(1) was issued prior to the filing of the present applications and as already discussed earlier the issue involved in the questions that are subject matter of present applications were raised in the notice under section 142(1) of the Act. Therefore, the ratio of this decision is squarely applicable to the facts of the present case and does not support the applicant. 14. In the case of Sage Publications Ltd., U.K. (supra) also relied upon by the applicant, the hon'ble High Court had held that issue of notice under section 143(2) even prior to filing of application before Authority for Advance Rulings ipso facto would be insufficient to attract automatic rejection of said application under the proviso to section 245R(2) of the Act and the special leave petition filed against this decision was dismissed by the apex court. Thus that case was decided on the basis of issue of notice under section 143(2) only as no notice under section 142(1) was issued ..... X X X X Extracts X X X X X X X X Extracts X X X X
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