Tetra Pak India Pvt. Ltd., Pune V. Deputy Director of Income-tax,

ITA 1863/PUN/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 5535 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-06-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 06-03-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 13-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUNIL TAMBE
• Keywords: Period of limitation; Retrospective amendment
• Section: 201(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUN E . , , ! , ' # BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AW ASTHY, JM . / ITA NO.1856/PUN/2014 '% & '& / ASSESSMENT YEAR : 2007-08 THE DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-II, PUNE. ....... / APPELLANT (% / V/S. TETRA PAK INDIA PRIVATE LIMITED. GROUND FLOOR, MAYFAIR TOWERS, MUMBAI- PUNE ROAD, SHIVAJI NAGAR, PUNE-411 005. PAN: AAACT3467B / RESPONDENT . / ITA NO.1863/PUN/2014 '% & '& / ASSESSMENT YEAR : 2007-08 TETRA PAK INDIA PRIVATE LIMITED. B-53, MIDC PHASE-II, CHAKAN INDUSTRIAL AREA, VILLAGE VASULI, TALUKA- KHED, PUNE-410 501 PAN : AAACT3467B ....... / APPELLANT (% / V/S. THE DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION)-II, PUNE. / RESPONDENT ASSESSEE BY : SHRI NIKHIL PATHAK & SHRI SUNIL TAMBE REVENUE BY : SHRI SANJEEV GHEI 2 ITA NO. 1856/PUN/2014 ITA NO.1863/PUN/2014 A.Y.2007-08 / DATE OF HEARING : 06.03.2019 / DATE OF PRONOUNCEMENT : 03.06.2019 ) / ORDER PER VIKAS AWASTHY, JM THESE CROSS APPEALS BY THE REVENUE AND THE ASSESSE E ARE DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX(APPEALS)-IT /TP, PUNE DATED 28.07.2014 FOR THE ASSESSMENT YEAR 2007-08. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE: THE ASSESSEE-COMPANY IS ENGAGED IN MANUFACTURING AND SUPPLY OF CARTON PACKAGES BASED ON ASEPTIC TECHNOLOGY. DURING THE PERIOD RELEVANT TO THE ASSESSMENT YEAR UNDER APPEAL, THE ASSESSEE MADE FOREIGN REMITTANCES FOR ACQUIRING SOFTWARE LICENSE, IT SUPPORT SERVICES AND FOR CE RTAIN OTHER TRANSACTIONS. THE ASSESSING OFFICER ISSUED NOTICE TO THE A SSESSEE ON 18.09.2012 FOR FURNISHING DETAILS OF FOREIGN REMITTANCES MADE DURING FINANCIAL YEAR 2005-06 TO 2011-12. THE ASSESSEE VIDE COM MUNICATION DATED 21.09.2012 COMPLIED WITH THE DIRECTIONS OF ASSESSING OFFICER AN D FURNISHED REQUISITE DETAILS OF FOREIGN REMITTANCES. THE ASSESSING OFFICER VIDE ORDER DATED 30.03.2013 PASSED U/S.201(1) AND 201(1A) OF THE INCO ME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) HELD THAT THE OVERSEAS PAYMENTS MADE BY THE ASSESSEE WERE TAXABLE UNDER THE PROVISION OF THE ACT, AS WELL AS UNDER INDIAS DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA ) WITH RESPECTIVE COUNTRIES. THE ASSESSEE OUGHT TO HAVE DEDUCTED TAX AT SOURCE ON SUCH PAYMENTS MADE TO THE PARTIES ABROAD. ACCORDINGLY, THE A SSESSING OFFICER RAISED DEMAND OF RS.70,19,865/- FOR ASSESSMENT YEAR 2007- 08 TOWARDS TAX AND INTEREST. 3 ITA NO. 1856/PUN/2014 ITA NO.1863/PUN/2014 A.Y.2007-08 3. AGGRIEVED BY THE ORDER U/S.201(1) AND 201(1A) OF THE AC T, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS) INTER-ALIA CHALLENGING VALIDITY OF THE SAID ORDER ON THE GROUND OF LIMITA TION. THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED THE GROUND RAISED BY THE ASSESSEE CHALLENGING VALIDITY OF ORDER PASSED U/S.201(1) OF TH E ACT. HOWEVER, ON MERITS, PART RELIEF WAS GRANTED TO THE ASSESSEE. HENC E, THE PRESENT CROSS APPEALS BY THE REVENUE AND ASSESSEE. 4. SHRI NIKHIL PATHAK APPEARING ON BEHALF OF THE ASSESSEE S UBMITTED AT THE OUTSET THAT BEFORE EXAMINING THE ISSUE ON MERITS, IT WOULD BE NECESSARY TO FIRST ADJUDICATE THE ISSUE OF VALIDITY OF ORDER PASSED BY THE ASSESSING OFFICER U/S.201(1) OF THE ACT. THE LD. AR OF THE ASSESSEE SU BMITTED THAT THE ASSESSING OFFICER HAS PASSED ORDER U/S.201(1) AND 201(1A) OF THE ACT ON 30.03.2013 FOR THE ASSESSMENT YEAR 2007-08. THE PROVISION OF SUB-SECTION (3) TO SECTION 201(1) AS THEY WERE APPLICABLE PRIOR TO THE AMENDMENT BY FINANCE NO. (2) ACT, 2014 W.E.F. 01.10.2014 PROVIDES THAT THE A SSESSING OFFICER SHOULD HAVE PASSED ORDER FOR FINANCIAL YEAR COMMENC ING ON OR BEFORE 1 ST APRIL, 2007 ANY TIME ON OR BEFORE 31 ST MARCH, 2011. WHEREAS, IN THE PRESENT CASE, THE ORDER HAS BEEN PASSED AFTER THE DAT E SPECIFIED UNDER THE ACT. THUS, THE ORDER PASSED BY THE ASSESSING OFFICER BEYO ND PERIOD OF LIMITATION AS MANDATED UNDER SUB SECTION (3) TO SECTION 201 IS NOT SUSTAINABLE. THE LD. AR IN SUPPORT OF HIS CONTENTIONS PLACED RELIANCE ON THE DECISION OF CO-ORDINATE BENCH OF THE TRIBUNAL IN THE CASE O F SANDVIK ASIA PRIVATE LIMITED VS. DDIT, INTERNATIONAL TAXATION-II, PUNE IN ITA NO. 1515/PUN/2014 FOR ASSESSMENT YEAR 2007-08 DECIDED ON 11.01.20 19. 5. ON THE OTHER HAND, SHRI SANJEEV GHEI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE VALIDITY OF ORDER PASSED U/S.201(1) OF THE A CT. 4 ITA NO. 1856/PUN/2014 ITA NO.1863/PUN/2014 A.Y.2007-08 6. WE HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIV ES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW. BEFORE ADVERTING TO THE MERITS OF THE ADDITION, IT IS IMPERATIVE TO FIRST ADJUDICATE T HE VALIDITY OR OTHERWISE OF THE ORDER PASSED U/S. 201(1) AND 201(1A) OF TH E ACT VIDE WHICH THE ASSESSEE IS HELD TO BE ASSESSEE IN DEFAULT AND DEM AND HAS BEEN RAISED. SUB-SECTION (3) TO SECTION 201 WAS INSERTED BY FINANCE NO . (2) ACT, 2009 W.E.F. 01.04.2010. THEREAFTER, IT WAS AMENDED BY THE FINANCE A CT, 2012 WITH RETROSPECTIVE EFFECT FROM 01.04.2010. THE PROVISIONS OF SUB-S ECTION (3) AS THEY WERE APPLICABLE TO ASSESSMENT YEAR 2007-08 READS AS UNDE R: (3) NO ORDER SHALL BE MADE UNDER SUB-SECTION (1) DEEMING A PERSON TO BE AN ASSESSEE IN DEFAULT FOR FAILURE TO DEDUCT THE WHOLE OR ANY PART OF THE TAX FROM A PERSON RESIDENT IN INDIA, AT ANY TIM E AFTER THE EXPIRY OF- (I) TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE STATEMENTS IS FILED IN A CASE WHERE THE STATEMENT REFERRED TO IN SECTION 200 HAS BEEN FILED; (II) SIX YEARS FROM THE END OF THE FINANCIAL YEAR I N WHICH PAYMENT IS MADE OR CREDIT IS GIVEN, IN ANY OTHER CASE: PROVIDED THAT SUCH ORDER FOR A FINANCIAL YEAR COMME NCING ON OR BEFORE THE 1 ST DAY OF APRIL, 2007 MAY BE PASSED AT ANY TIME ON OR BEFORE THE 31 ST DAY OF MARCH, 2011. A BARE PERUSAL OF THE PROVISO TO SUB SECTION (3) WOULD S HOW THAT ANY ORDER FOR FINANCIAL YEAR COMMENCING ON OR BEFORE 1 ST APRIL, 2007 IS TO BE PASSED AT ANY TIME ON OR BEFORE 31.03.2011. IN THE PRES ENT CASE, THE ORDER RELATING TO FINANCIAL YEAR 2006-07 (RELEVANT TO ASSESSMENT YEAR 2007-08) HAS BEEN PASSED ON 30.03.2013 I.E. MUCH BEYOND THE DATE OF 3 1.03.2011 SPECIFIED IN PROVISO TO SUB SECTION (3) TO SECTION 201(1) OF TH E ACT. THEREFORE, THE ORDER IS BARRED BY LIMITATION AND HENCE, THE SAME IS NON-EST . 7. WE FIND THAT SIMILAR ISSUE HAD COME UP BEFORE THE CO-OR DINATE BENCH OF TRIBUNAL IN THE CASE OF SANDVIK ASIA PRIVATE LIMITED VS. DD IT, 5 ITA NO. 1856/PUN/2014 ITA NO.1863/PUN/2014 A.Y.2007-08 INTERNATIONAL TAXATION-II, PUNE (SUPRA.) WHERE THE CO-ORDIN ATE BENCH OF THE TRIBUNAL AFTER CONSIDERING THE FACTS AND PROVISO TO SUB S ECTION (3) TO SECTION 201 HELD THAT THE ORDERS PASSED ON 25.03.2013 U/S.201(1 ) AND 201(1A) FOR THE ASSESSMENT YEAR 2007-08 ARE IN-VALID AND UNSUSTAINABLE. 8. THUS, IN VIEW OF THE FACTS OF THE CASE AND PROVISO TO SUB SECTION (3) TO SECTION 201(1), AS IT WAS APPLICABLE TO ASSESSMENT YEAR UND ER APPEAL, THE ORDER PASSED BY THE ASSESSING OFFICER U/S.201(1) AND 201(1A ) DATED 30.03.2013 IS VOID-AB-INITIO AND HENCE, QUASHED. CONSEQUENTLY, SUBSEQUENT PROCEEDINGS ARISING THERE FROM ARE VITIATED. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED AND T HAT OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON MONDAY, THE 3 RD DAY OF JUNE, 2019. SD/- SD/- ( . / D. KARUNAKARA RAO ) ( ! /VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; !' / DATED : 3 RD JUNE, 2019. SB ) * +',- . ', / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(APPEALS)-13, PUNE. 4. THE PR. CIT-5, PUNE. 5. %&' () , * () , +,- , / DR, ITAT, A BENCH, PUNE. 6. './ 01 / GUARD FILE. // TRUE COPY// *2 / BY ORDER, 3 (- / PRIVATE SECRETARY * () , / ITAT, PUNE. 6 ITA NO. 1856/PUN/2014 ITA NO.1863/PUN/2014 A.Y.2007-08 DATE 1 DRAFT DICTATED ON 06 .03.2019 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 29.05 .2019 SR.PS/PS 3 DRAFT PROPOSED AND PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/JM 5 APPROVED DRAFT COMES TO THE SR. PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 DATE OF UPLOADING OF ORDER SR.PS/PS 8 FILE SENT TO BENCH CLERK SR.PS/PS 9 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 10 DATE ON WHICH FILE GOES TO THE A.R 11 DATE OF DISPATCH OF ORDER