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TMI Blog2023 (1) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... which the assessee is an agent, on a voyage undertaken from India on 17-09- 2014. But for the impugned year, the assessee had filed his return of income declaring income for the entire year as per the provisions of Section 139(1) - This fact was pointed out by assessee to the Ld.CIT(A) as is evident from its submissions reproduced and copy of the return of income filed u/s 139(1) placed - The decision of the ITAT in the case of CMA CGM Agencies (India) (P.) Ltd. [ 2012 (11) TMI 510 - ITAT, RAJKOT] will therefore squarely apply, as per which the summary assessment order passed u/s. 172(4) needs to be set aside .The A.O. is further directed to take such action as may be warranted in terms of Section 172(7) of the Act. Appeal of the assessee is allowed in above terms. - ITA No. 3512/Ahd/2016 - - - Dated:- 1-6-2022 - Ms. Annapurna Gupta, Accountant Member And Shri Siddhartha Nautiyal, Judicial Member For the Appellant : Shri Rashmikant C. Modi, A.R. For the Respondent : Shri Nihar Ranjan Samal, Sr.D.R. ORDER PER : ANNAPURNA GUPTA, ACCOUNTANT MEMBER:- The present appeal has been filed by the Assessee against the order passed by the Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same in lieu of the Double Taxation Avoidance Agreement between India and Greece. This exemption was denied by the A.O. in his order passed u/s. 172(4) of the Act holding that this benefit could be availed by the assessee only in final assessment proceedings as per the provisions of Section 172(7) of the Act and not in the provisional assessment framed u/s. 172(4) of the Act. Accordingly the assessee was held liable to pay tax on the freight earned on this voyage without any benefit of exemption as per the Double Taxation Avoidance Agreement with Greece as claimed by the assessee. This order was upheld by the ld. CIT(A). 5. Before us the contentions of the Ld.counsel for the assessee were with respect to the additional grounds that the assessee had filed its return of income for the impugned year u/s 139(1) of the Act seeking assessment of its income for the entire year and therefore the provisions of Section 172(7) were attracted and the assessee needed to be assessed on its total income for the year as disclosed in the said return filed as per section 172(7) of the Act and this provisional assessment framed u/s. 172(4) of the Act for the solitary voyage undertaken on 17.02.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preting the provisions at 15 to 17 is as under: 15. Before proceeding further, it is considered useful to refer to the scheme of taxation u/s 172, which falls under Chapter XV of the Income-tax Act 1961. Chapter XV deals with Liability in Special Cases . Part H of Chapter XV contains only one section, i.e., section 172. It deals with Profits of non-residents from occasional shipping business . It therefore follows that the persons covered by section 172 are only those who are in occasional shipping business and not in the regular shipping business. Those who are in the regular shipping business are clearly outside the scope of section 172. They are covered by section 44B which contains Special provision for computing profits and gains of shipping business in the case of non-residents . While section 172 seeks to tax profits of non-residents from occasional shipping business, section 44B seeks to tax their profits from regular shipping business. Sub-section (1) section 172 empowers the Assessing Officer to levy and recover tax in the case of any ship belonging to or chartered by a non-resident in a summary manner notwithstanding anything contained in any other provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fits made by non-residents from occasional shipping shall be taxed by adopting the summary method of assessment by holding that 7 A1/2 per cent of the amount paid or payable on account of such carriage to the owner or the charterer is deemed to be income accruing in India to the owner or charterer on account of such carriage. It also provides that before departure of the ship, the master of the ship has to furnish to the Assessing Officer a return of the full amount paid or payable to the owner or charterer on account of the carriage of all passengers shipped at that port since the last arrival of the ship thereat. Sub-section (3) provides that if the master is unable to do so, he has to make satisfactory arrangement for the filing of the return and payment of the tax by any other person on his behalf. Sub-section (6) provides that a port clearance certificate shall not be granted to the ship until the Collector of Customs is satisfied that the tax assessable under this section has been duly paid or that satisfactory arrangements have been made for the payment thereof. In our view, the aforesaid procedure of assessing the income of a non-resident Indian because of his occasional ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not possible to deal with the cases covered by Double Taxation Avoidance Agreement. In the matters before us, the AO has rejected the claim of the respondent-company that its case falls under DTAA. Such an examination, in our view, cannot be undertaken in the proceedings u/s 172 as the AO has no discretion u/s 172(2)7(4) except to compute the income @ 7.5% of freight paid or payable. It is perhaps for this reason that section 172(7) gives an option to the owners/charterers of ships to seek assessment of their income in accordance with the normal provisions of the Income-tax Act. Once a return is filed by a non-resident u/s 139 claiming the benefit of DTAA, his assessment would need to be completed under the normal provisions of the Income-tax Act. 20. Apropos Ground No. (ii), it was vehemently contended by the Id. CIT-DR that the jurisdictional Assessing Officer should be directed to verify the position and tax the income of the freight beneficiary (represented by the respondent-company) from the business of handling cargo transportation (including slot chartering business) as per normal provisions of the Act. It is the case of the respondent-company that its income includin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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