Nordic Maritime Pte Lltd, Dehradun V. DCIT Circle-2, New Delhi

ITA 1865/DEL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1392 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2015-2016
• Appeal Filed On: 05-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SATPAL GULATI
• Assessee Lawyers: ABHIMANYU JHAMBA
• Keywords: Business income; Revision of order; Double taxation relief; Permanent establishment; Question of law; Difference of opinion; Assessment record; Change of opinion; Set aside
• Section: 263; 63; 143(3); 5(2); 201; 13; 20

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D NEW DELHI BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA . NO. 1865 /DEL/20 1 9 ASSESSMENT YEAR S 201 5 - 16 M/S NORDIC MARITIME PTD LTD. C/O-TASS ADVISORS LLP E-17, RACE COURSE, DEHRADUN, UTTRAKHAND V. DCIT(INTERNATIONAL TAXATION) CIRCE-2, DEHRADUN TAN/PAN: AAECN5974D (APP ELL ANT) (RESPONDENT) APP ELL ANT BY: SHRI ABHIMANYU JHAMBA, ADVOCATE, SHRI SANJAY AGRAWA. CA, SHRI ASHISH JHAMBA MS. HATNEIMANI, ADVOCATE RESPONDENT BY: SHRI SATPAL GULATI DATE OF HEARING: 15 0 1 20 20 DATE OF PRONOUNCEMENT: 20 03 20 20 O R D E R PER AMIT SHUKLA, J.M.: THE AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE IMPUGNED ORDER DATED 14.01.2019, PASSED BY LD. CIT (IT)-3, NEW DELHI U/S. 263 FOR THE ASSESSMENT YEAR 2015-16. IN THE GROUNDS OF APPEAL, THE ASSESSEE HAS RAISED FOLLOWIN G GROUNDS: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. COMMISSIONER OF INCOME TAX (INTERNATIO NAL TAXATION-3) (HEREINAFTER REFERRED TO AS LD. CIT) ERRED IN WRONGFULLY INVOKING THE PROVISIONS OF SECTION 263 O F THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT). 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY LD. CIT U/S 263 IS IN COMP LETE ITA NO.1865/DEL/2019 2 DEFIANCE OF LAW AND AGAINST SPECIFIC MANDAMUS ISSUE D BY THE HONBLE UTTARAKHAND HIGH COURT IN WRIT PETITION AND CONSEQUENT SPECIAL APPEAL FILED BY THE APPELLANT BE FORE HONBLE UTTARAKHAND HIGH COURT. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY LD. CIT U/S 263 BAD IN LAW IN AS MUCH IT DOES NOT FULFILL THE JURISDICTIONAL COND ITIONS ENVISAGED BY SECTION 263 OF THE ACT. 4. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY LD. CIT U/S 263 IS AGAINST THE SETTLED LEGAL DICTUM IN AS MUCH THAT THE LD. CIT ER RED IN NOT APPRECIATING THAT- A. IT WAS NOT A CASE WHERE NO ENQUIRY WAS MADE BY THE LD. ASSESSING OFFICER, ON THE CONTRARY, WAS A CASE WHERE ASSESSMENT ORDER WAS PASSED AFTER MAKING DETAILED ENQUIRIES. B. THAT 263 PROCEEDINGS CANNOT BE INITIATED ON A MERE CHANGE OF OPINION C. THAT WHERE TWO VIEWS ARE POSSIBLE AND ASSESSING OFFICER HAS ADOPTED ON OF THE VIEWS, 263 DOES NOT L IE D. IF TWO REASONABLE CONSTRUCTIONS OF A TAXING PROVISI ON ARE POSSIBLE, THE CONSTRUCTION THAT FAVOURS THE ASSESSEE HAS TO BE ADOPTED. 5. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT HAS FAILED TO APPRECIATE THE INTER PLAY BETWEEN ARTICLE 5(1) AND ARTICLE 5(5) OF THE AGREEMEN T FOR AVOIDANCE OF DOUBLE TAXATION BETWEEN INDIA AND SINGAPORE. 6. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT HAS ERRED IN NOT CONSIDERING THE N ATURE AND STIPULATION(S) OF THE CONTRACT ENTERED IN TO BY THE APPELLANT. 7. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT ERRED IN HOLDING THAT SEISMIC VESS ELS CONSTITUTE A PERMANENT ESTABLISHMENT WITHOUT APPRECIATING THAT THE CONTRACT WAS SERVICES AND NOT EQUIPMENT CENTRIC. ITA NO.1865/DEL/2019 3 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IS INCORPORATED UNDER LAWS OF SINGAPORE AND IT IS A TA X RESIDENT OF SINGAPORE. IT IS ENGAGED IN THE BUSINESS OF REND ERING OFFSHORE GEOPHYSICAL SERVICES TO INTERNATIONAL OIL & GAS INDUSTRY. THE ASSESSEE COMPANY HAD ENTERED INTO A C ONTRACT WITH CAIRN INDIA LIMITED ON 11.02.2014 FOR PROVISIO N OF 3D MARINE SEISMIC DATA ACQUISITION SERVICES. DURING TH E YEAR UNDER CONSIDERATION, I.E., AY 2015-16, THE SAME CON TRACT WAS CONTINUING AND THE ASSESSEE HAS FILED ITS RETURN OF INCOME ON 30.09.2015, DECLARING NIL INCOME AND HAS CLAIMED RE FUND OF AMOUNT OF TAX DEDUCTED AT SOURCE. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS, THE LD. AO CALLED FOR THE COPIES OF CONTRACT VIDE NOTICE DATED 18.07.2016 AND OTHER DETAILS. IN RESPONSE, THE ASSESSEE HAS FILED COPY O F THE CONTRACT AND THE WORK EXECUTED AND THE TIME PERIOD FOR WHICH THE ASSESSEE HAS PROVIDED SERVICES IN INDIA. THE AS SESSING OFFICER THEN HAD SPECIFICALLY REQUIRED THE ASSESSEE TO JUSTIFY THE BASIS FOR CLAIM OF NON-EXISTENCE PE IN INDIA. I N RESPONSE, THE ASSESSEE FILED A VERY DETAILED REPLY VIDE LETTE R DATED 23.12.2016 AND SUBMITTED THAT IT IS TAX RESIDENT OF SINGAPORE AND ACCORDING TO ARTICLE 5(3) READ WITH ARTICLE 5(5 ) OF INDIA- SINGAPORE TREATY, WHICH PROVIDES THAT THE ACTIVITY OF INSTALLATION OR ASSEMBLY PROJECTS, CONSTRUCTION, ET C. IN THE CONTRACTING STATE SHALL NOT FORM A PE UNLESS THE AC TIVITIES CARRIED OUT IS MORE THAN 183 DAYS. THUS, TAX RESIDE NT OF SINGAPORE SHALL BE DEEMED TO PE IN INDIA ONLY IT PR OVIDES SERVICES OF FACILITIES IN INDIA FOR A PERIOD OF MOR E THAN183 DAYS ITA NO.1865/DEL/2019 4 IN ANY FISCAL YEAR IN CONNECTION WITH EXPLORATION, EXPLOITATION OR EXTRACTION OF MINERAL OIL IN INDIA. THEREAFTER, THE AO ASKED FOR DETAILS OF DAYS OF THE ACTIVITIES CARRIED OUT T O WHICH ASSESSEE POINTED OUT THAT TOTAL AGGREGATE DAYS OF A CTIVITIES CARRIED OUT IN INDIA WAS 102 DAYS IN THE FINANCIAL YEAR 2014- 15; AND IN SUPPORT, FILED VARIOUS DOCUMENTS LIKE BI LLS, VOUCHERS AND INVOICES, DETAILS OF EXPATS WHO HAD CO ME TO INDIA WAS ALSO SUBMITTED. AFTER EXAMINING THE CONTR ACT AND ALL THE DETAILS, THE ASSESSING OFFICER ACCEPTED THE ASSESSEES CONTENTION HOLDING THAT NO PE EXISTS IN INDIA. THE RELEVANT OBSERVATIONS AND FINDINGS OF THE ASSESSING OFFICER IN THE ASSESSMENT ORDER READS AS UNDER: - 2. THE ASSESSEE COMPANY INCORPORATED UNDER LAWS OF SINGAPORE AND IS A TAX RESIDENT OF SINGAPORE. IT IS ENGAGED IN THE BUSINESS OF RENDERING OFFSHORE GEOPH YSICAL SERVICES TO INTERNATIONAL OIL & GAS INDUSTRY. THE A SSESSEE HAS ENTERED INTO A CONTRACT WITH CAIRN INDIA LIMITED ON 11 FEBRUARY 2014 FOR PROVISION OF 3D MARINE SEISMIC DATA ACQUISITION SERVICES. 3. DURING THE YEAR UNDER CONSIDERATION ASSESSEE HAS FILED RETURN OF INCOME DECLARING GROSS INCOME AS NIL. DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS VIDE ORDER SHE ET ENTRY DATED 24.11.2016, THE ASSESSEE WAS ASKED TO SUBMIT THE BASIS OF FILING NIL RETURN. VIDE WRITTEN SUBMISSIONS DATED STATED THAT THE ASSESSEE IS A COMPANY INCORPORATED UNDER THE LAWS O F SINGAPORE AND IS ELIGIBLE FOR BENEFICIAL PROVISIONS OF DTAA BETWEEN INDIA AND SINGAPORE. THE ASSESSEE SUBMITTED THE COPY OF TRC ISSUED BY THE SINGAPORE INLAND REVENU E AUTHORITY JUSTIFYING ITS BASIS FOR ELIGIBILITY OF TH E DTAA. THE ASSESSEE SUBMITTED THAT AS PER THE PROVISIONS O F ARTICLE 5(5) OF INDIA SINGAPORE DTAA, THE SINGAPORE ITA NO.1865/DEL/2019 5 COMPANY SHALL CONSTITUTE A PERMANENT ESTABLISHMENT (PE) IN INDIA ONLY WHEN ITS ACTIVITIES IN INDIA DURING A FY EXCEEDS THE THRESHOLD LIMIT OF 183 DAYS AS PRESCRIB ED UNDER THE DTAA. IN ABSENCE OF PE IN INDIA, BUSINESS PROFITS AS DEFINED UNDER ARTICLE 7 OF THE DTAA CANNO T BE TAXED IN INDIA. VIDE SUBMISSION DATED 23.12.2016 TH E ASSESSEE SUBMITTED NECESSARY DOCUMENTARY EVIDENCES INCLUDING CERTIFICATE FROM CAIRN INDIA LIMITED AND BILL OF ENTRY ISSUED BY THE CUSTOMS DEPARTMENT CONFIRMING T HE DAYS OF OPERATION IN INDIA. ASSESSEES REPLY HAS BEEN CONSIDERED AND BASIS OF DOCUMENTARY EVIDENCES SUBMITTED BY THE ASSESSEE DUR ING THE COURSE OF HEARING IT IS HELD THAT THE TOTAL DUR ATION OF OPERATION IN INDIA DURING FY 2014-15 IS FOR 102 DAY S WHICH IS LESS THAN 183 DAYS THRESHOLD LIMIT PRESCRI BED UNDER THE DTAA. THEREFORE, THE RETURN IS ACCEPTED AS FILED BY THE ASSESSEE. FURTHER THE REASONS FOR SELECTION OF CASE IN SCRUTINY UNDER CASS HAVE BEEN EXAMINED AND RELEVA NT EXPLANATION IS PLACED ON RECORD. 4. INCOME IS THEREFORE, COMPUTED AS RETURNED BY TH E ASSESSEE AND ASSESSMENT IS COMPLETED U/S 143(3) ON NIL INCOME, ISSUE NOTICE OF DEMAND AND CHALLAN. 3. THEREAFTER, THE LD. CIT IN HIS REVISIONARY JURIS DICTION ON EXAMINATION OF ASSESSMENT RECORD INCLUDING ASSESSME NT ORDER CAME TO THE CONCLUSION THAT THERE ARE VARIOUS SHORT COMINGS IN THE ASSESSMENT ORDER WHICH WAS FOUND TO BE ERRONEOU S AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ACCORDI NGLY, SHOW CAUSE NOTICE WAS ISSUED U/S 263 ON 21.12.2017. THE MAIN CONTENTION OF THE LD. CIT WAS THAT SEISMIC VESSEL O F THE ASSESSEE PRESENT IN THE TERRITORIAL WATERS OF INDIA ITSELF CONSTITUTES A FIXED PLACE PERMANENT ESTABLISHMENT WITHIN THE MEANING OF ARTICLE 5(1) OF INDIA SINGAPORE DTAA ; AND ITA NO.1865/DEL/2019 6 ACCORDINGLY, AS PER ARTICLE 7, THE RECEIPT OF THE A SSESSEE IS TAXABLE IN INDIA AS BUSINESS INCOME. HENCE, BOTH AO AND THE ASSESSEE WERE ERRONEOUS TO RESORT TO ARTICLE 5(5) W ITHOUT CROSSING THRESHOLD OF ARTICLE 5(1). THUS, VESSEL AN D THE BOATS CONSTITUTE A FIXED PLACE PE OF THE ASSESSEE IN INDI A. 4. THE ASSESSEE, IN THE MEANTIME HAD APPROACHED HON BLE UTTARAKHAND HIGH COURT BY WAY OF WRIT PETITION CHAL LENGING THE MAINTAINABILITY OF THE PROCESS OF INITIATION OF REVISIONARY JURISDICTION U/S. 263 OF THE ACT, HOWEVER, THE HON BLE HIGH COURT HELD THAT THE LD. CIT WILL CONSIDER OBJECTION S TO THE SHOW CAUSE NOTICE AND DECIDE ACCORDINGLY. THEREAFTE R, THE ASSESSEE FILED DETAILED OBJECTIONS AND SUBMISSIONS BEFORE THE LD. CIT, THE COPY OF WHICH HAS BEEN PLACED IN THE P APER BOOK. HOWEVER, THE LD. CIT HELD THAT THE AO SHOULD HAVE S EEN THE APPLICABILITY OF ARTICLE 5(1) BEFORE COMING TO ARTI CLE 5(5) AND HELD THAT THERE HAS TO BE PLACE OF BUSINESS TO FALL WITHIN THE AMBIT OF PE AND THERE HAS TO BE LINKED BETWEEN THE PLACE OF BUSINESS AND A SPECIFIC GEOGRAPHICAL POINT AND IT D OES NOT MEAN THAT EQUIPMENT CONSTITUTING THE PLACE OF BUSIN ESS HAD TO BE ACTUALLY FIXED TO THE SOIL ON WHICH IT STANDS . THE WORDS THROUGH WHICH ARE ALSO OPEN TO WIDE INTERPRETATION, FIRST TO APPLY TO ANY SITUATION WHERE BUSINESS ACTIVITIES WE RE CARRIED OUT, THAT IS, A PARTICULAR LOCATION WHICH IS AT THE DISPOSAL OF THE ENTERPRISE FOR THAT PURPOSE. THUS, HE HELD THAT SEISMIC SURVEY VESSEL WAS AT THE DISPOSAL OF THE ASSESSEE F ROM WHERE IT HAS PERFORMED ITS DUTIES WITHIN THE SPECIFIC GEO GRAPHICAL LOCATION AND THEREFORE, VESSEL CONSTITUTES A FIXED PLACE PE ITA NO.1865/DEL/2019 7 WITHIN ARTICLE 5(1). WHILE COMING TO THIS CONCLUSIO N, HE HAS QUOTED JUDGMENT OF ITAT DELHI BENCH IN THE CASE OF FUGRO ENGINEERS B.V. VS ACIT IN ITA NO.1754/DEL/2007 AND HONBLE MADRAS HIGH COURT IN THE CASE OF M/S POOMPU HAR SHIPPING CORP. LTD. VS ITO(IT), WHICH FOR THE SAKE OF READY REFERENCE IS REPRODUCED HEREUNDER:- IN ANOTHER CASE M/S POOMPUHAR SHIPPING CORP. LTD. VS. ITO(IT) [MAD HIGH COURT] (DATED. 09.10.2013) THE HO NBLE HIGH COURT, WHILE ADJUDICATING THE ISSUE OF EXISTEN CE OF PE IN THE SHAPE OF A MOVING SHIP WITHIN THE TERRITORY OF INDIAN WATERS, HELD THAT THE MOVING SHIP HAS A PLACE OF BU SINESS IN THE PLACE WHERE THE .SHIP IS DOCKED AND THE FACT THAT THE SHIP MOVED FROM ONE POINT TO ANOTHER IS THE RES ULT OF THE NATURE OF BUSINESS CONTRACT AND THE MOVEMENT IS AN INTEGRATED ONE HAVING BUSINESS AND GEOGRAPHICAL COHERENCE LEADS TO THE INFERENCE THAT THE FOREIGN ENTERPRISE HAS THE PLACE OF PERMANENT ESTABLISHMENT IN THIS COUNTRY. THE RELEVANT PART OF THE JUDGMENT IS REPRODUCED HEREUNDER: 139. THUS FOR PERMANENT ESTABLISHMENT, THERE MUST BE A PLACE FOR THE BUSINESS TO HE EARNED ON THROUGH THAT FIXED PLACE. THE CONCEPT OF PERMANENT ESTABLISHMENT ASSUMES SIGNIFICANCE IN THE CONTEXT O F THE DETERMINATION OF THE RIGHTS OF THE CONTRACTING STATE TO TAX THE PROFITS OF AN UNDERTAKING OF THE O THER CONTRACTING STATE. IN THE CONTEXT OF THE VARIOUS BUSINESS ACTIVITIES, IN THE CASE OF EQUIPMENT, A FI XED PLACE CAN BE FOUND TO EXIST EVEN THOUGH THE EQUIPMENT BY THE NATURE OF BUSINESS MAY BE RELOCATED FROM ONE SITE TO ANOTHER FOR A SINGLE CUSTOMER UNDER ONE INTEGRATED CONTRACT. A MOVABLE PLACE OF BUSINESS IS THUS TREATED AS FIXED, PLACE O F BUSINESS AND. MOST OF THE EQUIPMENT IS USED AT FIXE D POINTS WITHIN A PROXIMATE AREA ON A REPETITIVE CONTINUOUS BASIS FOR SUFFICIENT PERIOD OF TIME AS REQUIRED BY THE BUSINESS. THUS, WHEN THE BUSINESS ACTIVITIES ARE PERIPATETIC AND THE EQUIPMENT IS MOV ED BETWEEN, NEIGHBORING LOCATION, A SINGLE PLACE OF ITA NO.1865/DEL/2019 8 BUSINESS COULD BE CONSIDERED TO EXIST WHERE THE LOCATION TO WHICH THE EQUIPMENT IS MOVED, THEREBY PRESENTING A COHERENCE IN COMMERCIAL AND. GEOGRAPHICAL ASPECT WITH REGARD TO THE CONDUCT OF BUSINESS. WHEN THE COMMERCIAL COHERENCE IS NOT THERE EVEN IF THERE BE BUSINESS CARRIED ON WITHIN A LIMITED GEOGRAPHICAL LOCATION, THE SAME WOULD NOT B E CONSIDERED AS A SINGLE PLACE OF BUSINESS. 5. LASTLY, HE CANCELLED THE ASSESSMENT ORDER UPHOLD ING IT BE ERRONEOUS AS WELL AS THE PREJUDICIAL TO THE INTE REST TO THE REVENUE AFTER OBSERVING AS UNDER:- ON THE BASIS OF ABOVE DISCUSSION, IT IS EVIDENT TH AT THE ASSESSEE M/S NORDIC MARITIME PTE. LTD. HAS A FIXED PLACE OF BUSINESS IN THE SHAPE OF ITS VESSEL USED FOR CON DUCTING THE SEISMIC SURVEY AND HENCE, UNDER ARTICLE-7 OF IN DIA- SINGAPORE DTAA, THE RECEIPT OF THE ASSESSEE IS TAXABL E IN INDIA AS BUSINESS INCOME. WHILE VERIFYING THE APPLICABILITY OF ANY PROVISIONS OF ANY STATUTE LAW HAS TO BE READ FROM THE BEGINNING OF TH E PROVISION. ACCORDINGLY, THE TEST OF EXISTING OF PE UNDER THE PROVISION OF ARTICLE 5 OF THE DTAA HAS TO BE MADE STAR TING FROM FIRST SUB-ARTICLE. IF IT FAILS TO INCLUDE THE E XISTENCE OF PE UNDER SUB-ARTICLE (1) OF ARTICLE 5, THEN ONE HAS TO GO TO SECOND SUB-ARTICLE AND THEN THIRD AND SO ON. IN THI S CASE, THE VERY FIRST SUB ARTICLE STATES THAT A FIXED PLACE OF BUSINESS' COULD BE HELD AS A PE. THEREFORE, IT WAS INCORRECT ON THE PART OF THE ASSESSEE AS WELL AS TH E AO TO RESORT TO THE FIFTH SUB-ARTICLE WITHOUT VERIFYING T HE APPLICABILITY OF THE SUB-ARTICLE (1)-OF ARTICLE 5'OF THE DTAA; BASED ON THE ABOVE DISCUSSION, IT IS EVIDENT THAT T HE AO WRONGLY ACCEPTED THE ARGUMENT OF THE ASSESSEE THAT IT DID NOT HAVE PE IN INDIA FOR THE ABOVE CONTRACT. THE AB OVE INCORRECT APPLICATION OF STATUTE/DTAA BY THE AO RENDE RS THIS ASSESSMENT ERRONEOUS. BY VIRTUE OF THIS ERRONE OUS VIEW, REVENUE TO THE TUNE OF RS. 100.33 CRORE HAS NO T BEEN BROUGHT INTO THE TAX NET, MAKING THE ABOVE ASSESSMENT ORDER DATED 20.01.2017 PREJUDICIAL TO TH E ITA NO.1865/DEL/2019 9 INTEREST OF REVENUE. IN VIEW OF THE ABOVE DISCUSSION, THE ASSESSMENT FRA MED BY THE AO VIDE ORDER DATED 20.01.2017 IS HELD TO BE ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. THE ASSESSMENT SO FRAMED IS HEREBY CANCELLE D AND SET ASIDE SPECIFICALLY ON THE ISSUE OF TAXABILI TY OF REVENUE TO THE TUNE OF RS. 100.33 CRORE AS PER ARTICLE 5(1) OF DTAA BETWEEN INDIA - SINGAPORE WITH THE DIRECTION S TO THE AO TO FRAME THE ASSESSMENT AFRESH AFTER INCLUDIN G THE TAXABILITY OF REVENUE AND AFTER GRANTING OPPORTUNIT Y OF BEING HEARD TO THE ASSESSEE . 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT, HERE IN THIS CASE, FIRSTLY, THE AO HAD DULY A PPLIED HIS MIND AND HAS RAISED SPECIFIC QUERY AND CARRIED OUT THOROUGH ENQUIRIES AND EXAMINATION AS TO WHETHER THE ACTIVIT IES CARRIED OUT BY THE ASSESSEE CONSTITUTES A PE IN INDIA OR NO T; AND SECONDLY, WHETHER INCOME EARNED BY THE ASSESSEE IS TAXABLE AS BUSINESS INCOME IN INDIA OR NOT. ONCE, SUCH AN E NQUIRY HAS BEEN CONDUCTED AND INFORMATION HAS BEEN FOUND B Y THE AO TO BE CORRECT, THEN THE LD. CIT CANNOT HOLD THAT SUCH AN ORDER IS ERRONEOUS OR PREJUDICIAL TO THE INTEREST O F THE REVENUE. SIMPLY BECAUSE A DIFFERENT OPINION CAN BE ARRIVED AT IT CANNOT BE HELD THAT ORDER OF ASSESSING OFFICER I S ERRONEOUS; AND MOREOVER IT IS NOT A CASE OF LACK OF ENQUIRY BY THE ASSESSING OFFICER. THEREFORE, ASSESSMENT ORDER CANN OT BE CANCELLED WITHIN THE SCOPE AND PURVIEW OF SECTION 2 63 OF THE ACT. IN SUPPORT, HE DREW OUR ATTENTION TO THE VARIO US NOTICES AND THE REPLIES FILED BEFORE THE AO AND THE DETAILS SUBMITTED AS WELL AS THE SUBMISSIONS AND OBJECTIONS FILED BEF ORE THE LD. CIT. ITA NO.1865/DEL/2019 10 7. ON THE OTHER HAND, THE LD. CIT-DR SUBMITTED THAT THE ASSESSMENT ORDER IS ERRONEOUS IN LAW FOR THE REASON THAT HE SHOULD HAVE EXAMINE THE ISSUE FROM THE PERSPECTIVE OF ARTICLE 5(1) INDIA SINGAPORE TREATY DTAA FIRST AND THEN ONL Y HE COULD HAVE RESORTED TO OTHERS PARAGRAPHS OF ARTICLE 5. HO WEVER, THE LD. CIT HAS GIVEN VERY DETAILS REASONS AS TO WHY AR TICLE 5(1) WILL APPLY AND ALSO REFERRED TO THE DECISIONS AS QU OTED ABOVE BY THE LD. CIT IN THE IMPUGNED ORDER. THUS, HE STRO NGLY RELIED UPON THE ORDER OF THE LD. CIT. 8. WE HAVE HEARD RIVAL SUBMISSIONS AND ALSO PERUSED THE RELEVANT FINDINGS GIVEN IN THE IMPUGNED ORDER AS WE LL MATERIAL ON RECORD PLACED BEFORE US. WE HAVE ALREADY DISCUSS ED THE FACTS IN DETAIL IN THE PRECEDING PARAGRAPHS. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAD CARRIED OUT 3D MARINE S EISMIC DATA ACQUISITION SERVICES FOR CAIN INDIA LTD. AND T HE SCOPE OF WORK CONSISTED OF ACQUISITION AND PROCESSING OF SEI SMIC DATA AS WELL AS GRAVITY AND MAGNETIC DATA. DURING THE YE AR, THE ASSESSEE HAS SHOWN GROSS REVENUE OF RS.133 CRORES A ND HAS CLAIMED THAT IT IS NOT LIABLE TO BE TAXED IN INDIA AS A TAX RESIDENT OF SINGAPORE, IN VIEW OF ARTICLE 5(5) OF I NDIA SINGAPORE DTAA. THE EXPLANATION OF THE ASSESSEE WAS THAT, IT HAS PROVIDED SERVICES AND FACILITIES IN INDIA FOR A PER IOD OF LESS THAN 183 DAYS AND HAS ALSO GIVEN DETAILS AND EVIDEN CES TO PROVE THAT THE ACTIVITIES CARRIED OUT IN INDIA WERE 102 DAYS WHICH FACT HAS BEEN ACCEPTED BY THE ASSESSING OFFIC ER AFTER VERIFICATION AND SAME HAS NOT BEEN DISPUTED BY THE LD. CIT ALSO. THE ONLY CASE OF THE LD. CIT IS THAT THE AO S HOULD HAVE ITA NO.1865/DEL/2019 11 EXAMINE THE APPLICABILITY OF FIXED PLACE PE UNDER A RTICLE 5(1) AS THE SEISMIC VESSELS THROUGH WHICH THE ASSESSEE C ARRIED OUT ACTIVITIES IN INDIA CONSTITUTE A FIXED PLACE PE THR OUGH WHICH IT HAS CARRIED OUT THE BUSINESS ACTIVITY IN INDIA. 9. FOR SAKE OF READY REFERENCE ARTICLE-5 OF INDIA SINGAPORE DTAA READS AS UNDER: 1. FOR THE PURPOSE OF THIS AGREEMENT, THE TERM PERMAN ENT ESTABLISHMENT MEANS A FIXED PLACE OF BUSINESS THRO UGH WHICH THE BUSINESS OF THE ENTERPRISE IS WHOLLY OR P ARTLY CARRIED ON. 2. THE TERM PERMANENT ESTABLISHMENT INCLUDES ESPE CIALLY: (A) A PLACE OF MANAGEMENT; (B) A BRANCH; (C) AN OFFICE (D) A FACTORY (E) A WORKSHOP; (F) A MINE, AN OIL OR GAS WELL, A QUARRY OR ANY OTHER PLACE OF EXTRACTION OF NATURAL RESOURCES; (G) A WAREHOUSE IN RELATION TO A PERSON PROVIDING STORAGE FACILITIES FOR OTHERS; (H) A FARM PLANTATION OR OTHER PLACE WHERE AGRICULTURE, FORESTRY, PLANTATION OR RELATED ACTIVITIES ARE CARRIED ON; (I) PREMISES USED AS A SALES OUTLET OR FOR SOLICITING AND RECEIVING ORDER; (G) AN INSTALLATION OR STRUCTURE USED FOR THE EXPLORATION OR EXPLOITATION OF NATURAL RESOURCES BUT ONLY IF SO USED FOR A PERIOD OF MORE THAN 120 DAYS IN ANY FISCAL YEAR. ITA NO.1865/DEL/2019 12 3, A BUILDING SITE OR CONSTRUCTION, INSTALLATION OR A SSEMBLY PROJECT CONSTITUTES A PERMANENT ESTABLISHMENT ONLY IF IT CONTINUES FOR A PERIOD OF MORE THAN 183 DAYS IN ANY FISCAL YEAR , 4. AN ENTERPRISE SHALL BE DEEMED TO HAVE A PERMANENT ESTABLISHMENT IN A CONTRACTING STATE AND TO CARRY O N BUSINESS THROUGH THAT PERMANENT ESTABLISHMENT IF IT CARRIES ON SUPERVISORY ACTIVITIES IN THAT CONTRACTI NG STATE FOR A PERIOD OF MORE THAN 183 DAYS IN ANY FISCAL YE AR IN CONNECTION WITH A, BUILDING SITE OR CONSTRUCTION, INSTALLATION OR ASSEMBLY PROJECT WHICH IS BEING UND ERTAKEN IN THAT CONTRACTING STATE. 5, NOTWITHSTANDING THE PROVISIONS OF PARAGRAPHS 3 AND 4, AND. ENTERPRISE SHALL BE DEEMED TO HAVE A PERMANENT ESTABLISHMENT IN A CONTRACTING STATE AND TO CARRY ON BUSINESS THROUGH THAT PERMANENT ESTABLISHMENT IF IT PROVIDES SERVICES OR FACILITIES IN THAT CONTRACTING STATE FOR A PERIOD OF MORE THAN 18 3 DAYS IN ANY FISCAL YEAR IN CONNECTION WITH THE EXPLORATION, EXPLOITATION OR EXTRACTION OF MINERAL OILS IN THAT CONTRACTING STATE . 6. AN ENTERPRISE SHALL BE DEEMED TO HAVE A PERMANENT ESTABLISHMENT IN A CONTRACTING STATE IF IT FURNISHE S SERVICES, OTHER THAN SERVICES REFERRED TO IN PARAGR APHS 4 AND 5 OF THIS ARTICLE AND TECHNICAL SERVICES AS DEF INED IN ARTICLE 12, WITHIN A CONTRACTING STATE THROUGH EMPL OYEES OR OTHER PERSONNEL, BUT ONLY IF: (A) ACTIVITIES OF THAT NATURE CONTINUE WITHIN THAT CONTRACTING SLATE FOR A PERIOD OR PERIODS AGGREGATING MORE THAN 90 DAYS IN ANY FISCAL YEAR; OR ITA NO.1865/DEL/2019 13 (B) ACTIVITIES ARE PERFORMED FOR A RELATED ENTERPRI SE (WITHIN THE MEANING OF ARTICLE 9 OF THIS AGREEMENT} FOR A PERIOD OR PERIODS AGGREGATING MORE THAN 30 DAYS IN ANY FISCAL YEAR. 7. NOTWITHSTANDING THE PRECEDING PROVISIONS OF THIS AR TICLE, THE TERM PERMANENT ESTABLISHMENT SHALL BE DEEMED NOT TO INCLUDE; (A) THE USE OF FACILITIES SOLELY FOR THE PURPOSE OF STORAGE, DISPLAY OR OCCASIONAL DELIVERY OF GOODS OR MERCHANDISE BELONGING TO THE ENTERPRISE (B) THE MAINTENANCE OF A STOCK OF GOODS OF MERCHANDISE BELONGING TO THE ENTERPRISE SOLELY FOR THE PURPOSE OF STORAGE, DISPLAY OR OCCASIONAL DELIVERY; (C) THE MAINTENANCE OF A STOCK OF GOODS OR MERCHANDISE BELONGING TO THE ENTERPRISE SOLE:;, FOR THE PURPOSE OF PROCESSING BY ANOTHER ENTERPRISE; (D) THE MAINTENANCE OF A FIXED PLACE OF BUSINESS SOLELY FOR THE PURPOSE OF PURCHASING GOODS OR MERCHANDISE, OR OF COLLECTING INFORMATION. FOR THE ENTERPRISE; (E) THE MAINTENANCE OF A FIXED PLACE OF BUSINESS SOLELY FOR THE PURPOSE OF ADVERTISING, FOR THE SUPPLY OF INFORMATION, FOR SCIENTIFIC RESEARCH O FOR SIMILAR ACTIVITIES WHICH HAVE A PREPARATION OR AUXILIARY CHARACTER, FOR THE ENTERPRISE. HOWEVER, THE PROVISIONS OF SUB-PARAGRAPHS (A) TO (E ) SHALL NOT I APPLICABLE WHERE THE ENTERPRISE MAINTAINS ANY OTHER FIXED PLACE BUSINESS IN THE OTHER CONTRACTING STATE THROU GH WHICH THE BUSINESS OF THE ENTERPRISE IS WHOLLY OR PARTLY CARRIED ON. ITA NO.1865/DEL/2019 14 8. NOTWITHSTANDING THE PROVISIONS OF PARAGRAPHS 1 AND 2, WHERE A PERSON - OTHER THAN AN AGENT OF AN INDEPEND ENT STATUS TO WHOM PARAGRAPH APPLIES - IS ACTING IN A C ONTRACTING STATE ON BEHALF OF AN ENTERPRISE OF T OTHER CONTRAC TING STATE THAT ENIERPRI.SE SHALL BE DEEMED TO HAVE PERMANENT ESTABLISHMENT IN THE FIRST-MENTIONED. STATE, IF (A) HE HAS AND HABITUALLY EXERCISES IN THAT STATE AUTHORITY TO CONCLUDE CONTRACTS ON BEHALF OF THE ENTERPRISE; UNLESS HIS ACTIVITIES ARE LIMITED TO THE PURCHASE OF GOODS OR MERCHANDISE FOR THE ENTERPRISE; (B) HE HAS NO SUCH AUTHORITY, BUT HABITUALLY MAINTAINS IN THE FIRST-MENTIONED STATE A STOCK GOODS OR MERCHANDISE FROM WHICH HE REGULAR DELIVERS GOODS OR MERCHANDISE ON BEHALF OF THE ENTERPRISE; OR (C) HE HABITUALLY SECURES ORDERS IN THE FIRST MENTIONED STATE, WHOLLY OR ALMOST WHOLLY FOR THE ENTERPRISES ITSELF OR FOR THE ENTERPRISE AND OTHER ENTERPRISES CONTROLLING, CONTROLLED BY, OR SUBJECT TO THE SAME COMMON CONTROL, AS THAT ENTERPRISE 9. AN ENTERPRISE OF A CONTRACTING STATE SHALL NOT BE DEEMED TO HAVE A PERMANENT ESTABLISHMENT IN THE OTH ER CONTRACTING STATE MERELY BECAUSE IT CARRIES ON BUSI NESS IN THAT OTHER STATE THROUGH A BROKER, GENERAL COMMISSI ON AGENT OR ANY OTHER AGENT OF AN INDEPENDENT STATUS PROVIDED, THAT SUCH PERSONS ARE ACTING IN THE ORDIN ARY COURSE OF THEIR BUSINESS. HOWEVER, WHEN THE ACTIVIT IES OF SUCH, AN AGENT ARE DEVOTED WHOLLY OR ALMOST WHOLLY ON BEHALF OF THAT ENTERPRISE ITSELF OR ON BEHALF OF TH AT ENTERPRISE AND OTHER ENTERPRISES CONTROLLING, CONTR OLLED BY, OR SUBJECT TO THE SAME COMMON CONTROL, AS THAT ENTE RPRISE, ITA NO.1865/DEL/2019 15 HE WILL NOT BE CONSIDERED AN AGENT OF AN INDEPENDEN T STATUS WITHIN THE MEANING OF THIS PARAGRAPH. 10. THE FACT THAT A COMPANY WHICH, IS A. RESIDENT OF A CONTRACTING STALE CONTROLS OR IS CONTROLLED BY A CO MPANY WHICH IS A RESIDENT OF THE OTHER CONTRACTING STATE, OR WHICH CARRIES ON BUSINESS IN THAT OTHER CONTRACTING STATE {WHETHER THROUGH A PERMANENT ESTABLISHMENT OR OTHER WISE SHALL NOT OF ITSELF CONSTITUTE/EITHER COMPANY A PER MANENT ESTABLISHMENT OF THE OTHER. 10. THE CORE ISSUE BEFORE US IS THAT, WHETHER AS SESSEE WHO IS CARRYING OUT SPECIFIC ACTIVITY OF PROVIDING SERV ICES OR FACILITIES IN CONNECTION WITH THE EXPLORATION, EXPL OITATION OR EXTRACTION OF MINERAL OILS, WHICH ACTIVITY FALLS WI THIN THE SCOPE AND DEFINITION GIVEN IN ARTICLE 5(5), THEN WHETHER GENERAL PROVISION OF ARTICLE 5(1) WOULD APPLY OR NOT. THERE ARE THREE TYPES OF PE CONTEMPLATED UNDER ARTICLE 5, FIRSTLY A N ESTABLISHMENT WHICH IS CARRYING OUT A BUSINESS FROM A FIXED PLACE OF BUSINESS LIKE OFFICE, BRANCH, ETC. AND SEC OND TYPE IS AGENCY PE. THE THIRD TYPE OF PE IS FOR CONSTRUCTION AND INSTALLATION SITES; SUPERVISORY OR CARRYING OUT ASS EMBLY PROJECT ON A SITE, OR SERVICES OR FACILITIES IN CONNECTION WITH THE EXPLORATION, EXPLOITATION OR EXTRACTION OF MINERAL OILS ETC., WHICH ARE SPECIFIC ACTIVITY BASED PE GENERALLY WITH A THRESHOLD PERIOD, WHICH HERE IN THIS CASE IS 183 DAYS. ARTICL E 5(1) CONTAINS THE GENERAL RULE FOR PERMANENT ESTABLISHME NT THAT IT MUST BE A FIXED PLACE BUSINESS AT THE DISPOSAL OF T HE ENTERPRISE THROUGH WHICH THE BUSINESS ENTERPRISE CA RRIES ON ITS BUSINESS. ARTICLE 5(2) CONTAINS ILLUSTRATIVE LI ST OF PLACES OF BUSINESS WHICH PRIMA FACIE CONSTITUTE PE, PROVIDED IT SATISFIES ITA NO.1865/DEL/2019 16 THE REQUIREMENT OF ARTICLE 5(1). ARTICLE 5(3) TO 5( 5) CONTAINS SPECIAL RULE FOR CONSTRUCTION AND INSTALLATION SITE OR SERVICES OR FACILITIES IN CONNECTION WITH THE EXPLORATION, E XPLOITATION OR EXTRACTION OF MINERAL OILS ETC. AND IT IS A LIMITATION ON THE GENERAL PROVISION OF ARTICLE 5(1). ONCE ACTIVITIES AS DEFINED PARA 5 OR 3 ARE ATTRACTED, THE MINIMUM PERIOD TEST HAS TO BE APPLIED AND BEING SPECIFIC ACTIVITY BASED ARTICLE, IT WILL PREVAIL OVER GENERAL RULE OF ARTICLE 5(1). IF SUCH ACTIVITY BASED PE ARE TO SEEN FROM THE GENERAL RULE PERSPECTIVE ONLY THEN THERE IS NO REQUIREMENT OF SUCH CLAUSES IN THE TREATY AND THRES HOLD PERIOD. IN THAT CASE THERE WOULD BE FIXED PLACE PE AND AGENCY PE. EVEN THOUGH THE SPECIFIC ACTIVITY BASED PE CAN HAVE A FIXED PLACE THROUGH WHICH IT CARRIES OUT THE ACTIVI TIES, BUT PRESCRIBED THRESHOLD OR MINIMUM PERIOD HAS TO BE RE AD INTO AND SUCH TIME PERIOD THUS PUTS A LIMITATION ON THE GENERAL RULE OF ARTICLE 5(1). HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF DIT VS. HYUNDAI HEAVY INDUSTRIES CO. LTD. IN ITA NO.30/2011 HAVE DEALT THE SIMILAR ISSUE WHEREIN, THE HONBLE COURT RELYING UPON (2007) 163 TAXMAN 378 (UTTARAKHAND), HELD THAT DIVISION BENCH OF THIS COURT UPHELD THE F INDINGS OF THE ITAT THAT ARTICLE 5(3) IS AN EXCEPTION TO ARTIC LE 5(1) AND 5(2) AND WOULD PREVAIL NOTWITHSTANDING ARTICLE 5(1) AND 5(2). SINCE, THE FORMER IS A SPECIFIC PROVISION. THE RELE VANT OBSERVATION OF THE HONBLE HIGH COURT READS AS UNDE R:- IN COMMISSIONER OF INCOME-TAX VS. HYUNDAI HEAVY INDUSTRIES CO. LTD: (2007) 163 TAXMAN 378, THE DIVISI ON BENCH OF THIS COURT HAD OBSERVED: ITA NO.1865/DEL/2019 17 ..... THE INCOME-TAX APPELLATE TRIBUNAL IN ITS JUDGMENT HAS RECORDED THAT LEARNED COUNSEL STATED T HAT SUB-PARAGRAPH 1 OF THE ARTICLE 5 OF THE CADT GENERAL LY PROVIDED THAT AFFIXED PLACE OF BUSINESS WOULD BE RE GARDED AS A PERMANENT ESTABLISHMENT IF THE ASSESSEE CARR IED ON HIS BUSINESS WHOLLY OR PARTLY FROM THIS FIXED PLACE . ARTICLE 5 (2) PROVIDED THAT THE TERM PERMANENT ESTABLISHME NT WOULD INCLUDE SIX LOCATIONS REFERRED TO THEREIN. ACC ORDING TO LEARNED COUNSEL, THE SIX LOCATIONS COULD BECOME PERMANENT ESTABLISHMENTS ONLY IF THEY SATISFIED THE TEST LAID DOWN IN ARTICLE 5 (1), I.E. THE BUSINESS OF TH E ENTERPRISE WAS WHOLLY OR PARTLY CARRIED ON THROUGH SUCH LOCATIONS. ARTICLE 5 (3) ACCORDING TO LEARNED COUNSE L WAS A SPECIFIC PROVISION AND IT WAS WELL-SETTLED THAT A S PECIFIC PROVISION OVERRIDES THE GENERAL PROVISION. THE PLEA IN CONCLUDING WAS THAT ARTICLE 5 (3) WAS AN EXCEPTION TO ARTICLE 5(1) AND ARTICLE 5 (2) AND WHERE A BUILDING , SITE OR CONSTRUCTION ASSEMBLY OR INSTALLATION PROJECT DOES NOT EXIST FOR A PERIOD EXCEEDING NINE MONTHS, AN OFFICE RENDERING SUPPORT SERVICES TO SUCH PROJECT COULD NO T BE REGARDED AS A PERMANENT ESTABLISHMENT WITHIN THE MEANING OF ARTICLES 5(1) AND 5(2) SINCE ARTICLE 5(3 ) WAS A SPECIFIC PROVISION. THE INCOME-TAX APPELLATE TRIBUN AL HAS ALSO RECORDED IN ITS FINDING THAT WE ARE NOT SUFFIC IENTLY CONVINCED TO TREAT THE INCOME FROM INDIAN OPERATION S AT RS. NIL FOR THE ASSESSMENT YEAR 1988-89, SPECIALLY WHERE THE ASSESSEE HAD FAILED EVEN BEFORE THE TAX AUTHORI TIES TO ITA NO.1865/DEL/2019 18 SUPPORT ITS FACTS AND FIGURES AND WE HAVE UPHELD TH E APPLICATION TO SECTION 145. THE INCOME-TAX APPELLAT E TRIBUNAL WAS RIGHT IN REJECTING THE ARGUMENT OF ZER O PROFIT ON THE INDIAN OPERATIONS AND TO ACCEPT THE ALTERNAT IVE ARGUMENT HOLDING THAT INSTRUCTION NO. 1767 IS AFTER ALL A GUIDELINE AND COMPUTATION CAN BE MADE UNDER THE RELEVANT PROVISIONS OF THE ACT READ WITH THE GUIDELI NES THEMSELVES. THE INCOME-TAX APPELLATE TRIBUNAL AFTER DETAILED DISCUSSIONS HELD THAT INSTRUCTION NO. 1767 IS AFTER ALL A GUIDELINE AND COMPUTATION CAN BE MADE U NDER THE RELEVANT PROVISIONS OF THE ACT READ WITH THE GUI DELINES THEMSELVES AND FURTHER HELD THAT IT WOULD BE FAIR A ND REASONABLE IF PROFITS FROM INDIAN OPERATIONS ARE WO RKED OUT BY APPLYING A RATE OF 3 PER CENT. WITH THE AGRE EMENT OF LEARNED COUNSEL FOR THE PARTIES, THE INCOME-TAX APP ELLATE TRIBUNAL HAS RIGHTLY HELD THAT A SPECIFIC PROVISION WOULD OVERRIDE A GENERAL PROVISION. ALL THE ISSUES IN THE APPEAL ARE CONCLUDED BY A FINDING OF FACT. 7 THUS, IN OUR OPINION, NO SUBSTANTIAL QUESTION OF LAW ARISES TO BE ANSWERE D IN THESE APPEALS.. (EMPHASIS SUPPLIED). THE FINDING RECORDED BY THE INCOME TAX APPELLATE TR IBUNAL IN THE ORDERS PASSED IN THE AFORESAID THREE YEARS, WAS THAT ARTICLE 5 (3) IS AN EXCEPTION TO ARTICLES 5 (1) & 5 ( 2), AND WOULD PREVAIL NOTWITHSTANDING ARTICLE 5 (1) & 5 (2), SINCE THE FORMER WAS A SPECIFIC PROVISION. THIS CONCLUSION OF THE TRIBUNAL HAS NOT BEEN NEGATED BY THE DIVISION BENCH OF THIS COURT IN THE AFORESAID JUDGMENT. WHILE SRI H.M. BHA TIA, ITA NO.1865/DEL/2019 19 LEARNED SENIOR STANDING COUNSEL FOR INCOME-TAX, MAY BE JUSTIFIED IN HIS SUBMISSION THAT THE DIVISION BENCH HAS NOT, INDEPENDENTLY, ANALYZED THE SCOPE OF ARTICLE 5 OF TH E DTAAA, AND HAS NOT RECORDED ITS OPINION ON THE CONSTRU CTION TO BE PLACED ON VARIOUS SUB-ARTICLES OF ARTICLE 5 OF THE DTAA, THE FACT REMAINS THAT THE DIVISION BENCH HAS NOT IN TERFERED WITH THE ORDER OF THE TRIBUNAL. THE COMMISSIONER OF INCOME TAX (APPEALS) WAS, IN THE PRESENT CASE, JUSTIFIED I N HOLDING THAT, SINCE THE ISSUE STOOD CONCLUDED IN THE EARLIE R ASSESSMENT YEAR IN THE ASSESSEES OWN CASE, BY THE INCOME TAX APPELLATE TRIBUNAL, NO INTERFERENCE WAS CALLED FOR. 11. THUS, THE CONCLUSION OF THE ASSESSING OFFICER IS CONSONANCE WITH JUDGMENT OF JURISDICTIONAL HIGH COU RT; THEREFORE, IT CANNOT BE HELD THAT THE ASSESSMENT OR DER IS ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THEREFORE, THE LD. CIT WAS NOT JUSTIFIE D IN CANCELLING THE ASSESSMENT ORDER IN HIS REVISIONAL J URISDICTION U/S. 263 OF THE ACT. MOREOVER, LD. ASSESSING OFFICE R HAS NOT ONLY CARRIED OUT PROPER ENQUIRY BUT ALSO EXAMINED T HE ISSUE IN DETAIL AND REACH TO A CONCLUSION WHICH IS PERMIS SIBLE VIEW AND LD. CIT CANNOT CANCEL THE ASSESSMENT BASED ON H IS OPINION. ACCORDINGLY, THE IMPUGNED ORDER PASSED U/S . 263 IS QUASHED. 12. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ITA NO.1865/DEL/2019 20 ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH MARCH, 2020. SS SD/ - SD/ - SD/- /- [ PRASHANT MAHARISHI ] [ AMIT SHUKLA ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20.03.2020 SHEKHAR, SR. PS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR ASSISTANT REGISTRAR