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TMI Blog2024 (6) TMI 1137X X X X Extracts X X X X X X X X Extracts X X X X ..... t also does not have unhindered and unlimited access to assessee premises. The arrangement between Assessee Company and University of Cambridge is simple that of affiliation - HELD THAT:- As decided in immediately preceding A.Y. 2011-12 on careful consideration of the arrangements between the appellant and the University of Cambridge, it is seen that the appellant was engaged by University of Cambridge for the limited purposes i.e. to conduct examination at various Indian educational institutions run by the appellant. There is no evidence on record that the said Cambridge University had any supervision or control over the appellant company, nor does it indicate that it had unlimited and unhindered access to the appellant s premises. The arrangements between the appellant and the University of Cambridge are plain and simple as the appellant was getting the examination carried out for the University of Cambridge. The appellant company s Ryan Global School, Mumbai is certified to be a Cambridge International Centre, which was eligible to conduct the examinations for University of Cambridge. However, in terms of share holding, managerial and professional control, University of Cambridg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer ('AO') erred in passing the impugned assessment order dated February 2, 2015 ('Assessment Order') and the Hon'ble Commissioner of Income Tax (Appeals) ('CIT(A)') vide his appellate order under Section 250(6) of the Income-tax Act, 1961 ('Act') received by the Appellant on February 3, 2016 erred in partly disallowing the appeal made by the Appellant under Section 246A of the Act. On the facts and circumstances of the case and in law, the learned AO erred in assessing the income of the Appellant at Rs. 7,52,40,570 as against the returned income of Rs. 7.12,87,080. 2. On the facts and circumstances of the case and in law, the learned AO and the Hon'ble CIT(A) erred in making several allegations, observations and assertions based on mere conjectures and surmises, without any relevant material on record. Inter-alia the incorrect assumptions/ inferences made by the Hon'ble CIT(A) are as under: (a) The Hon'ble CIT(A) has erred in rejecting the contentions of the Appellant that the Appellant has not acted as the permanent establishment ('PE'). The Hon'ble CIT(A) has erred in holding that the Appellant has acted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lassify as fee for technical services under the Tax Treaty and accordingly the payments for examination lees made by the Appellant to foreign university are not chargeable to tax in India under the provisions of the Tax Treaty. 7. That the learned Assessing Officer (AO) and the Hon'ble CIT(A) have erred in ignoring order dated 22 December 2014 passed by the Hon'ble Commissioner of Income Tax Appears on similar matter in respect of earlier assessment year, i.e. AY 2011-12 wherein the Hon ble Commissioner of Income Tax (Appeals) 4 has clearly spelled out with detailed deliberations that the Appellant was not required to deduct any taxes at source of payment of examination fees to the foreign university. 8. That the learned AO erred in disallowing and the Hon'ble CIT(A) further erred in confirming the addition of Rs. 35,02,105 to the Appellant's returned income on account of disallowance under Section 40(a)(ia) of the Act without appreciating that Section 40(a)(ia) of the Act does not squarely cover payments made to non-residents. Section 40(a)(ia) of the Act covers only payments made to resident persons and inter alia reads as under: 40. Notwithstanding anything to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty. During the assessment proceedings, the Assessing Officer asked the assessee as to why the payment in respect of examination fee made to Cambridge University amounting to Rs. 35,02,105/- should be not be disallowed u/s 40(a)(ia) of the Income Tax Act, 1961 on account of non deduction of TDS on such payment. The assessee filed its reply dated 30.01.2015 and submitted that assessee company s Ryan Global School are affiliated with University of Cambridge. Accordingly the students who sits in the exam has to pay exam fee to the University of Cambridge and examination fee so collected from students by the assessee was transferred to University of Cambridge. It was further submitted that University of Cambridge is not a resident of India and it does not have any control over the assessee company and it also does not have unhindered and unlimited access to assessee premises. The arrangement between Assessee Company and University of Cambridge is simple that of affiliation. In terms of shareholding, managerial and professional control, University of Cambridge does not have any control over the assessee company. In support of its contention, the assessee submitted the following documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or technical service as defined under explanation 2 to section 9(1) of the Act and as per Article 13(5)(c) of the India- UK DTAA and therefore not taxable in the hand of recipient in India. It is further submitted that Ryan Global School has met the criteria to be affiliated with University of Cambridge and therefore was granted affiliation certificate and no further agreement is required for the arrangement between Assessee Company and University of Cambridge. It is pertinent to mention that similar disallowance was made by AO in immediately preceding A.Y. 2011-12 and same was deleted by ld. CIT(A). Relevant finding of the ld. CIT(A) is as under: 2 Regarding the Ground No. 1 of the appeal, keeping in view the certificate issued by HM Revenue and Customs dated 13.03.2010 in Form No. 10F, and keeping in view the facts of the case, it is evident that the University of Cambridge to whom payment was made is not resident in India. On careful consideration of the arrangements between the appellant and the University of Cambridge, it is seen that the appellant was engaged by University of Cambridge for the limited purposes i.e. to conduct examination at various Indian educational institut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. CIT(A) has observed as follows: 6.1.4 I have considered the finding of the AO and the submissions of the appellant. On perusal of the finding of the AO, I am unable to find the basis on which the AO concluded that the appellant company is the Permanent Establishment of the Foreign University. Just because the Indian party is collecting examination fees cannot be the basis of being a Permanent Establishment. Furthermore, on perusal of the submissions filed by the appellant, I am also of the view that as per Article 13 (para 5) of the DTAA between India and UK the appellant company cannot be held to be the PE of the Foreign University as there is no fixed place under control and disposal of the foreign university. Furthermore, the appellant company does not have any principal agent relationship with foreign university. On careful consideration, I find no reason to deviate from the appellant order of my Ld. Predecessor on the issue for AY 2011-12. 6.1.5 In this regard, reliance is also placed on the decision of the Hon'ble Delhi Bench of Income Tax appellate Tribunal in the case of M/s. Hughes Escort Communications Ltd. Vs. DCIT, Circle 2(2) [ITA No. 752/Del/2005]. 6.1.6 In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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