9911796707
TMI Blog1979 (2) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... ave a certain income chargeable in Pakistan. We are concerned in this reference with the scheme for avoidance of double taxation of income in India and Pakistan. Broadly speaking, the procedure prescribed in the agreement for the avoidance of double taxation is for the ITO to keep the estimated amounts of tax which would have to be given by way of abatement, in abeyance, till the figures are finally settled. The assessment would be made on the entire income in the usual manner and the demand would be completed, but a portion of the demand would be held over. A time is prescribed within which the assessee has to produce the certificate of assessment in Pakistan and on production of this certificate the uncollected portion of the demand would be adjusted against the abatement allowable under the agreement. If the certificate is not produced within the prescribed time or the extended time, the abatement shall cease to be operative and it would follow that the entire amount of tax which was kept back would be collected from the assessee. In the assessee-company's case, the particulars of the Pakistan assessments were unknown when the material assessments were completed. The ITO, to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lief under the said agreement. The common order of the AAC for all these years is annexed as annex " B " to the statement of case and in that order the AAC has set out the figures of the income on which abatement was estimated originally, the Pakistan income on which abatement was allowed, and what, according to the assessee, the ITO ought to have allowed. The basis of this difference of opinion need not be gone into since a very limited question arises in this reference and, in the view which we are inclined to take, the merits of the respective contentions will have to be gone into by the AAC. According to the AAC, the orders of the ITO which were the subject-matter of appeals before him were passed to give effect to the Double Taxation Avoidance Agreement, but did not amount to assessments. In the AAC's view, the assessments which had been originally made, had been made under s. 23(3) and these assessments had become final and conclusive long ago. According to the AAC, if the assessee-company had any grievance about the original assessment it could have filed an appeal at that time, but not having done so, it could not prefer an appeal at a later stage. However, according to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntitled to. In a later decision of that very High Court, viz., ITO v. State Bank of India [1968] 69 ITR 833 (Cal), the scope of what the ITO can do at a subsequent stage, i.e., when the certificate is produced before him, has been indicated. Based on the observations in these decided cases, Mr. Joshi on behalf of the Commissioner contended that the claim for abatement has to be made at the time of the original assessment. In his view if at that time the Pakistani assessment had been completed, then the claims would have been gone into by the ITO and it was at that time that the assessee could have gone in appeal if dissatisfied with the relief allowed by the ITO since this was the stage of assessment according to the learned counsel for the Commissioner. In answer to a query from the Bench he fairly stated that if this question, i.e., the question of giving double taxation avoidance relief had been determined at the stage of the original assessment (on the footing that necessary certificate was then available from the Pakistani authorities) then the assessee-company could have, in its appeal, agitated the question of relief allowed to it by the ITO if it had been dissatisfied wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ill have to produce certificate of assessment in Pakistan within one year in respect of profits arising in Pakistan as provided in the agreement." Now it is easily perceivable that this order could in no way have aggrieved the assessee-company or given rise to any appeal on its part inasmuch as the full amount of the estimate by the company was accepted, but as the officer himself made it clear, it was accepted for the present, i.e., tentatively for the time being. This was clearly not a final determination of the amount of relief to be given to the assessee-company but a provisional decision taken pending production of the certificate of assessment from Pakistan within one year as indicated in the order itself. When that certificate was produced within the prescribed time, the officer (whether he be the same officer or his successor) went on to complete the process of assessment and finally determine the quantum of relief allowable to the assessee-company and the amount of tax collectable from the assessee-company. Once this order and the subsequent order (part of annex. " E ") are properly perused, there is no doubt that the process of assessment was, in the instant case, at a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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