Nivedita Fernandes., Margao V. Income Tax Officer, International Taxation., Margao

ITA 373/PAN/2014

• Counselvise Citation: 37324114 RSA 2014
• Duration Of Justice: 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2015
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Assessment Year: 2012-2013
• Appeal Filed On: 24-10-2014
• Court: TRIBUNAL
• Department Lawyers: R DURAI
• Keywords: Double taxation relief; Additional evidence
• Section: 5(2); 37; 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ,PANAJI BENCH, PANAJI [BEFORE SHRI P. K. BANSAL, AM & SHRI D.T GARASIA, JM ] I.T . A NO S . 373 TO 37 4 / PNJ/2014 A.Y S. 20 12 - 13 TO & 13 - 14 MRS. NIVEDITA FERNANDES VS. I.T.O, INTERNATIONAL TAX ATION, PAN: AAHPF 4105C MARGAO ( APPELLANT/ASSESSEE) ( RESPONDENT ) I.T.A NO . 375/PNJ/2014 A.Y 2012 - 13 MR. BR IAN COSME FERNANDES VS. I.T.O, INTERNATIONAL TAXATION, PAN: AA GPF 5536Q MARGAO ( APPELLANT/ASSESSEE) ( RESPONDENT ) FOR THE APPELLANT / ASSESEE : SHRI DEVENDRA A. BALE, CA, LD.AR FOR THE RESPONDENT/DEPARTMENT : SHRI R. DURAI PANDIAN, LD.DR DATE OF HEARING: 19 - 01 - 2015 DATE OF PRONOUNCEMENT: 19 - 01 - 2015 ORDER PER SHRI D.T GARASIA, J M: T HESE APPEALS HAVE BEEN FILED BY BOTH THE ASSESSEE S AGAINST THE RESPECTIVE ORDER OF THE LD. CIT (A) , BANGALORE DATED 2 5 TH MARCH 2014 FOR THE ASSESSMENT YEARS 20 12 - 13 AND 2013 - 14 RESPECTIVELY . 2. THE ABOVE APPEALS PERTAIN TO COMMON ISSUES , THEREFORE, THESE ARE DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 3. THE FOLLOWING COMMON GROUNDS ARE RAISED BY THE RESPECTIVE ASSESSEE IN ITA NOS. 373 TO 375/P NJ/2014 FOR THE ASSESSMENT YEARS 20 12 - 13 AND 2013 - 14 : - 1. THE LEARNED CIT(A) ERRED IN DISMISSING THE APPEAL FOR WANT OF EVIDENCE. 2. TOUR APPELLANT PRAYS THAT THE PASSPORTS OF THE PORTUGESE LAWYERS BE TAKEN ON RECORD AS EVIDENCE. 3. YOUR APPELLAN T PRAYS THAT THE ORDER OF CIT(A) DATED 25/08/2014 BE SET ASIDE AND THE ORDER OF I TO (INT. TAX) DATED10/02/2014 BE QUASHED. 2 ITA NO S. 373 - 375/PN? - 14 - JM MRS. NIVEDITA FERNANDES & MR. BR IAN COSME FERNANDES 4. YOUR APPELLANT CRAVES LEAVE TO AMEND, ALTER OR ADD ANY GROUND DURING THE HEARING. 4. THE COMMON S HORT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A PROPRIETOR OF M/S. GOAN SUPPORT INDIA /M/S. EXCELLENCY SERVICES ENGAGED IN THE ACTIVITIES OF COLLECTING THE DOCUMENTS LIKE MARRIAGE CERTIFICATES, BIRTH CERTIFICATES, DEATH CERTIFICATES, PASSPORT COPIES ETC. FROM THE CLIENTS IN I NDIA AND SENDING IT TO LAWYERS IN PORTUGAL (HEREINAFTER REFERRED TO AS PROTUGESE BENEFICIARIES) IN CONNECTION WITH PORTUGESE NATIONALITY WORK UNDERTAKEN BY THE PORTUGESE BENEFICIARIES, WHO PROVIDE LEGAL CONSULTANCY SERVICES IN CONNECTION WITH THE SAID POR TUGESE NATIONALITY WORK AND CORRESPOND WITH PORTUGESE AUTHORITIES IN PORTUGAL IN THIS REGARD. THE ASSESSEE COLLECTS AND REMITS THE FIXED CHARGES FOR DIFFERENT SERVICES FROM THE CLIENTS IN INDIA AS PER THE BILLS RAISED BY THE PORTUGESE BENEFICIA RIES. THES E MONIES ARE BEING TRANSFERRED FROM THE A XIS (UTI) BANK LTD., CURRENT ACCOUNT NO.909020038739826 /911020021329794 OF M/S. GOAN SUPPORT INDIA //M/S. EXCELLENCY SERVICES TO PORTUGESE BENEFICIARIES ON DEMAND. 5. THEREAFTER, THE AO HELD THAT THE ENTIRE SUM RE MITTED ABROAD FELL WITHIN THE PURVIEW OF SECTION 5(2) OF THE I.T ACT, AND THE ASSESSEE WAS LIABLE TO WITHHOLD TAX UNDER THE PROVISIONS OF SECTION 195 OF THE ACT . HE ALSO EXAMINED ARTICLE 14 OF THE RELEVANT DTAA AND CONCLUDED THAT THE SAME WAS NOT BENEFICI AL TO THE ASSESSEE. 6 . MATTER CARRIED TO LD. CIT(A) AND CIT(A) HAS DISPOSED OF THE APPEALS BY HIS COMMON ORDER BY OBSERVING AS UNDER: - PARA 5 5 . BEFORE ME, THE ASSESSEES REPRESENTATIVE WERE UNABLE TO PRODUCE THE PASSPORTS OF THE RECIPIENTS. THEREBY, THE FACT REGARDING PERIOD OF STAY IN INDIA REMAINS UNESTABLISHED VIS - - VIS CONDITIONS LAID DOWN IN THE TREATY. THUS, I HAVE NO OPTION BUT TO CONFIRM THE ACTION OF THE A.O FOR WANT OF EVIDENCE. IT IS ORDERED ACCORDINGLY. 7 . BOTH THE ASSESSEE ARE IN APPEA L AGAINST THE DECISION OF THE LD.CIT(A). 8 . DURING THE COURSE OF HEARING BEFORE US T HE LD.AR SUBMITTED THE WRITTEN SUBMISSIONS, WHICH READS AS UNDER: - 1. THE FACTS AND THE POINT OF LAW INVOLVED IN THE PRESENT APPEAL IS FULLY COVERED BY THE DECISION OF HON'BLE TRIBUNAL , PANAJI BENCH IN THE CASE OF CEDRIK JORDAN DA SILVA V/S INCOME TAX OFFICER IN ITA NO.61/PNJ/2012 DATED 08/08/2013 (COPY OF ORDER ATTACHED). 3 ITA NO S. 373 - 375/PN? - 14 - JM MRS. NIVEDITA FERNANDES & MR. BR IAN COSME FERNANDES 2. YOUR APPELLANT HAS PAID FEES TO PORTUGESE LAWYERS TOWARDS THEIR LEGAL SERVICES RENDERED AT PORT UGAL. 3. YOUR APPELLANT CLAIMED THAT THE FEES PAID TO LAWYERS ARE COVERED UNDER ARTICLE 14 OF DTAA WITH THE GOVERNMENT OF PORTUGESE REPUBLIC (COPY ATTACHED), AND HENCE DOES NOT ATTRACT THE PROVISIONS OF WITHHOLDING OF TAX UNDER INCOME TAX ACT, 1961. 4. THE LEARNED I.T.O REJECTED THE CLAIM OF YOUR APPELLANT AND HELD YOUR APPELLANT LIABLE FOR WITHHOLDING OF TAX U/S195 OF INCOME TAX ACT, 1961. 5. THE LEARNED CIT(A) ACCEPTED THE CONTENTION OF YOUR APPELLANT, RELYING ON THE DECISION OF HON'BLE TRIBUNAL, PA NAJI BENCH IN THE CASE OF CEDRIK JORDAN DA SILVA V/S. I.T.O IN ITA NO.61/PNJ/2012 DATED 08/08/2013, BUT DISMISSED THE APPEAL FOR NON PRODUCTION OF PASSPORTS OF THE PORTUGESE LAWYERS, HOLDING AT PARA 5BEFORE ME, THE ASESSEES REPRESENTATIVE WERE UNABLE TO PRODUCE THE PASSPORT OF THE RECIPIENTS. THEREBY, THE FACT REGARDING PERIOD OF STAY IN INDIA REMAINS UNESTABLISHED VIS - - VIS CONDITIONS LAID DOWN IN THE TREATY. THUS, I HAVE NO OPTION BUT TO CONFIRM THE ACTION OF THE AO FOR WANT OF EVIDENCE. 6. THE PASSP ORTS OF THE RECIPIENTS WERE NOT IN THE POSSESSION OF THE APPELLANT AND HENCE THE SAME COULD NOT BE PRODUCED AT THE TIME OF HEARING. 7. YOUR APPELLANT HAS FILED PASSPORTS OF THE RECIPIENTS ALONG WITH A PRAYER UNDER RULE 29 OF APPELLATE TRIBUNAL RULES 196 3 PRAYING FOR PRODUCTION OF PASSPORTS OF RECIPIENTS AS ADDITIONAL EVIDENCE. 8. A SCRUTINY OF THE PASSPORTS CLEARLY INDICATES THAT THE ADVOCATES WERE NOT IN INDIA FOR MORE THAN 183 DAYS AS DEPICTED BELOW: ASS YR NAME OF ADVOCATE NO OF DAYS STAY PERIOD 201 2 - 13 DR. VASCO ADOLFO FARIA ESTEVES 9 16/01/2012 TO 24/01/2012 2012 - 13 MINGUEL REIS 23 04/11/2011 TO 26/11/2011 2 013 - 14 0 0 9. YOUR APPELLANT SUBMITS THAT AS THE PERIOD OF STAY OF PORTUGESE LAWYERS IN INDIA IS LESS THAN 183 DAYS, IT IS NOT HIT BY THE EXCEPTION OF ARTICLE 14(B) OF DTAA WITH THE GOVERNMENT OF THE PORTUGESE REPUBLIC. 10. THE HON'BLE TRIBUNAL ON THE SAME FACTS AND POINT OF LAW HAS HELD IN THE CASE OF CEDRICK JORDA DA SILVA V/S. INCOME TAX OFFICER IN ITA NO.61/PNJ/2012 DATED 08/08 /2013 AS FOLLOWS: PARA 2.2 LAST PART: BUT DUE TO THE DTAA BETWEEN INDIA AND PORTUGAL IF THE INCOME IS NOT CHARGEABLE TO TAX, WE ARE OF THE FIRM VIEW THAT THE DTAA WILL PREVAIL AND THE INCOME WILL NOT BE CHARGEABLE TO TAX IN INDIA. SINCE THE INCOME IS NOT CHARGEABLE TO TAX IN INDIA, THE ASSESSEE WAS NOT UNDER AN OBLIGATION TO DEDUCT THE TDS . WE, ACCORDINGLY , SET ASIDE THE ORDER OF CIT(A) AND QUASH THE ORDER PASSED U/S201(1) AND 201(1A) OF THE INCOME TAX ACT. 11. YOUR APPELLANT PRAYS THAT THE OR DER OF CIT(A) DATED 25/08/2014 BE SET ASIDE AND THE ORDER OF ITO(INT.TAX) DATED 10/02/2014 BE QUASHED. 9. THE LD.DR HAS RELIED ON THE ORDERS OF THE TAX AUTHORITIES. 4 ITA NO S. 373 - 375/PN? - 14 - JM MRS. NIVEDITA FERNANDES & MR. BR IAN COSME FERNANDES 1 0 . WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE FIND THAT THE AO AN D LD.CIT(A) HELD THAT THE ASSESSEE IS LIABLE FOR WITHHOLDING OF TAX U/S195 OF THE I.T ACT 1961. THE LD. CIT(A) HAS ACCEPTED THE DECISION IN THE CASE OF CEDRICK JORDAN DA SILVA VS.ITO IN ITA NO.61/PNJ/2012 DATED 08.08.2013. THE ASSESSEE COULD NOT PRODUCE THE PASSPORT S OF PORTUGESE LAWYERS. THE ASSESSEE WAS UNABLE TO PRODUCE THE SAME BEFORE US ALSO. THE PASSPORTS CLARIFY THAT THE ADVOCATES WERE NOT IN INDIA FOR MORE THAN 183 DAYS. THE ASSESSEE HAS TO PROVE THIS FACT. THE LD.AR SUBMITTED THAT AS PER DTAA WI TH THE GOVERNMENT OF PORTUGESE REPUBLIC ARTICLE 14(B) IF THE PORTUGESE LAWYERS STAY IN INDIA IS LESS THAN 183 DAYS . HOWEVER, THE ASSESSEE WANTED TO PRODUCE THESE PASSPORTS BEFORE THE AO TO PROVE THE CLAIM OF THE ASSESSEE. THEREFORE, IN THE INTEREST OF NATU RAL JUSTICE AND FAIR PLAY, WE RESTORE THIS ISSUE TO THE FILE OF THE AO. THE AO IS DIRECTED TO VERIFY THE PORTUGUESE PASSPORTS OF THE LAWYERS AS REQUIRED ARTICLE 14(B) OF DTAA WITH GOVERNMENT OF PORTUGESE REPUBLIC. THE AO IS DIRECTED TO DECIDE THE MATTER AF RESH AFTER GIVING DUE OPPORTUNITY OF HEARING TO THE ASSESSEE. 1 1 . IN THE RESULT, APPEAL S OF THE BOTH THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER IS PRONOUNCED IN THE OPEN COURT ON 19 - 01 - 2015 SD/ - SD/ - ( P. K. BANSAL ) ( D.T GARAS IA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 19 - 01 - 2015 **PRADIP (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. A PPELLANT 2 RESPONDENT 3. THE CIT(A) CONCERNED 4. 5. THE C IT CONCERNED THE D . R 6. GUARD FILE TRUE COPY, BY ORDER, ASSTT. REGISTRAR .