IATA BSP INDIA, MUMBAI V. ADIT 3(1),

ITA 4289/MUM/2010

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3301 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-03-2016
• Appeal Filed By: Assessee
• Bench Allotted: L
• Next Hearing Date: 15-02-2016
• Assessment Year: misc
• Appeal Filed On: 26-05-2010
• Court: TRIBUNAL
• Department Lawyers: M RAGHAVEN
• Keywords: Double taxation relief; Retrospective amendment; Right to appeal; Commercial expediency; Condonation of delay

Judgement Text

, , L, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES L, MUMBAI , , , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NOS.2339,2340,2341, 2342, 2343,4289/M/2010 & ITA NOS.5666, 3272, 2147/M/2011 ASSESSMENT YEAR: NOT APPLICABLE INTERNATIONAL AIR TRANSPORT ASSOCIATION 101, HDO CORPORATE ENCLAVE, B WING, B.D. SAWANT MARG, CHAKALA, ANDHERI EAST, MUMBAI- 400099 / VS. ADIT, 3(1), MUMBAI- ( APPELLANT ) (REVENUE) P.A. NO. AAAFB6235E / APPELLANT BY SHRI NITESH JOSHI (AR) / REVENUE BY SHRI M. RAGHAVEN , (DR) ! ' / DATE OF HEARING : 18/02/2016 ! ' / DATE OF ORDER: 16/03/2016 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE APPEALS, INVOLVING IDENTICAL ISSUES, BELONGIN G TO ONE APPELLANT, HAVE BEEN FILED AGAINST SEPARATE ORD ERS OF LD. IATA, BSP, INDIA 2 CIT(A), WHICH WERE PASSED U/S 248 OF INCOME TAX ACT , 1961. LD. CIT(A) HAD DISPOSED THE APPEALS FILED BEFORE HI M AGAINST THE SEPARATE ORDERS PASSED U/S 195(2) OF THE ACT WH EREIN IT WAS HELD THAT THE APPELLANT WAS LIABLE TO DEDUCT TA X AT SOURCE ON THE REMITTANCES MADE BY IT TO INTERNATIONAL AIR TRANSPORT ASSOCIATION (CANADA). 2. DURING THE COURSE OF HEARING, ARGUMENTS WERE MADE BY SHRI NITESH JOSHI, AUTHORISED REPRESENTATIVE (AR) ON BEH ALF OF THE APPELLANT AND BY SHRI M. RAGHAVEN, DEPARTMENTAL REPRESENTATIVE (DR) ON BEHALF OF THE REVENUE. 3. THE BRIEF FACTS AS CULLED OUT FORM THE ORDERS OF T HE LOWER AUTHORITIES ARE THAT THE APPELLANT NAMELY INTERNATI ONAL AIR TRANSPORT ASSOCIATION BSP (IN SHORT REFERRED AS IAT A-INDIA) HAD FILED APPLICATIONS IN DIFFERENT YEARS FOR ISSUE OF CERTIFICATE U/S 195(1) OF THE ACT, FOR REMITTANCES TO INTERNATI ONAL AIR TRANSPORT ASSOCIATION (CANADA), IN SHORT REFERRED T O AS IATA- CANADA. THE APPELLANT (I.E. IATA-INDIA) WAS A BRANC H OFFICE OF IATA-CANADA. THE RESERVE BANK OF INDIA VIDE ITS LET TER DATED 25.11.1995 HAD PERMITTED IATA-CANADA TO ESTABLISH B RANCH OFFICE IN INDIA FOR THE PURPOSE OF UNDERTAKING CERT AIN NON- COMMERCIAL ACTIVITIES ON NO PROFIT BASIS. 4. IATA-CANADA THROUGH ITS ADMINISTRATIVE OFFICE IN G ENEVA, SWITZERLAND, HAD ENTERED INTO AN AGREEMENT WITH GSI TRANSPORT TOURISM SA, A CORPORATION INCORPORATED IN FRANCE (ADP-GSI) FOR BSP LINK SERVICES. IN PURSUANCE TO TH E ABOVE IATA, BSP, INDIA 3 AGREEMENT, ADP-GSI HAD DEVELOPED THE SYSTEM AS PER THE SPECIFIC NEED OF THE AIRLINES AND AGENTS TO PROVIDE BSP LINK SERVICES. BSP LINK IS A SYSTEM, WHEREIN THE MANUAL OPERATIONS SUCH AS ISSUE OF DEBIT NOTED/ CREDIT NOTES, ISSUE O F REFUND, BILLING STATEMENT AND ALL THE INFORMATION RELATING TO TICKETS ARE CARRIED OUT ELECTRONICALLY BY BSP LINK SYSTEM FOR A GENTS AS WELL AS FOR AIRLINES WHO HAVE PARTICIPATED IN THE B SP LINK. 5. IATA-INDIA (I.E. APPELLANT BEFORE US) WAS REQUIRED TO MAKE REMITTANCES TO IATA-CANADA TOWARDS REIMBURSEMENT OF INVOICES OF GSI TRANSPORT TOURISM SA, FRANCE. IN V IEW OF THESE FACTS THE APPELLANT FILED PETITIONS U/S 195 B EFORE THE CONCERNED OFFICER REQUESTING THEM TO ISSUE AN AUTHO RIZATION TO REMIT THE AMOUNTS WITHOUT ANY DEDUCTION OF TAX AT S OURCE. THE CONTENTION OF THE APPELLANT WAS NOT FOUND ACCEPTABL E BY THE OFFICER INTER-ALIA FOR THE REASONS THAT ACTUAL BENEFICIARY OF BSP LINK SERVICES WERE AIRLINES AND AGENTS IN INDIA AND SERVICE PROVIDER WAS PAID BY THESE ENTITIES THROUGH IATA-IN DIA AND IATA-CANADA. IT WAS HELD THAT SERVICE WAS IN NATURE OF A TECHNICAL SERVICE, AND THEREFORE, THE REMITTANCES W ERE IN THE NATURE OF FEE FOR TECHNICAL SERVICES (FTS) AND THER EFORE TAXABLE @ 10% IN VIEW OF ARTICLE 13 OF DTAA BETWEEN INDIA AND FRANCE. 6. BEING AGGRIEVED, IATA-INDIA (I.E. APPELLANT BEFORE US) HAD FILED APPEALS AGAINST VARIOUS ORDERS PASSED U/S 195 (2) TO LD. CIT(A) U/S 248 OF THE ACT BEFORE LD. CIT(A), WHEREI N DETAILED IATA, BSP, INDIA 4 SUBMISSIONS WERE MADE. BUT ALL THE APPEALS WERE DIS MISSED IN- LIMINIE BY THE LD. CIT(A) DUE TO FOLLOWING THREE REASONS : (I) SOME OF THESE APPEALS WERE FILED LATE BY THE AP PELLANT AND LD. CIT(A) REFUSED TO GRANT CONDONATION OF DELAY IN FILING OF THE APPEALS BEFORE LD CIT(A). (II) LD. CIT(A) HELD THAT FOR EACH REMITTANCES THER E SHOULD BE SEPARATE APPEAL AND IN SOME CASES THE APPELLANT HAD FILED ONE APPEAL FOR TWO OR MORE REMITTANCES AND THEREFORE, O NLY ONE APPEAL WAS ADMITTED AND BALANCE WERE DISMISSED. (III) IT WAS HELD BY LD. CIT(A) THAT IATA-INDIA WAS NOT ELIGIBLE TO FILE APPEAL U/S 248 FOR THE REASON THAT IT WAS NOT BEARING THE LIABILITY OF THE TAX DEDUCTED AT SOURCE ON THE REMI TTANCES MADE BY IT, WHICH IS A MANDATORY CONDITION PRESCRIBED U/ S 248. 7. WE HAVE HEARD BOTH THE PARTIES AT LENGTH ON ALL TH E AFORESAID THREE ISSUES. AFTER HEARING THE PARTIES A ND CONSIDERING FULL FACTS AND CERTAIN CRUCIAL ASPECTS AS WERE BROUGHT BEFORE US, WE FIND THAT THESE APPEALS CANNO T BE HEARD AND DISPOSED BY US ON MERITS, SINCE THESE NEED TO G O BACK TO THE FILE OF LD. CIT(A) FOR RE-EXAMINATION AND RE-AD JUDICATION. 8. WE HAVE DISCUSSED AND DECIDED ALL THE THREE ISSUES RAISED BY THE LD. CIT(A), IN THE FOLLOWING MANNER: 9. ISSUE OF FILING OF APPEAL(S) LATE BEFORE THE LD. CIT(A): 9.1. THE LD. CIT(A) REFUSED TO GRANT CONDONATION FOR DE LAY IN FILING OF THE APPEALS ON THE GROUNDS THAT PETITION SEEKING IATA, BSP, INDIA 5 CONDONATION OF DELAY WAS NOT ATTACHED ALONG WITH TH E APPEAL MEMO FILED IN FORM NO.35 AND THAT APPELLANT WAS NOT ABLE TO GIVE SUFFICIENT CAUSE TO JUSTIFY THE DELAY. 9.2. IN THIS REGARD WE FIND THAT AS PER LAW, IT IS NOT MANDATORY THAT PETITION FOR CONDONATION OF DELAY HAS TO BE MA NDATORILY ATTACHED ALONG WITH APPEAL MEMO. IF AN APPELLANT HA S FILED THE PETITION ON OR BEFORE THE DATE OF HEARING OF THE AP PEAL, THE APPELLATE AUTHORITY SHOULD NOT BRUSH ASIDE THE PETI TION MERELY FOR THE REASON THAT THE PETITION WAS NOT FILED ALON G WITH APPEAL MEMO. FURTHER WITH REGARD TO JUSTIFICATION OF DELAY , IT IS NOTED THAT THE APPELLANT HAD FILED DULY SWORN AFFIDAVIT B EFORE THE LD. CIT(A) IN SUPPORT OF THE REASONING GIVEN BY IT TO E XPLAIN THE DELAY. THE APPELLANT ALSO ATTACHED DETAILED NOTE ON REASONING FOR CONDONATION OF DELAY IN FILING OF THE APPEAL. W E FIND IT APPROPRIATE TO REPRODUCE THE SAID NOTE HEREUNDER: 1. IATA BSP INDIA (IATA, INDIA), THE APPELLANT IS A BRANCH OFFICE OF INTERNATIONAL AIR TRANSPORT ASSOCIATION, CANADA ('IATA, CANADA'). THE RESERVE BANK OF INDIA VIDE ITS LETTER DATED 25.11 .1995 HAS PERMITTED IATA, CANADA TO ESTABLISH BRANCH OFFICE I N INDIA FOR THE PURPOSE OF UNDERTAKING CERTAIN NON- COMMERCIAL ACTIVITIES ON NO PROFIT BASIS. 2. IATA, CANADA THROUGH ITS ADMINISTRATIVE OFFICE I N GENEVA, SWITZERLAND CONTRACT INTO AN AGREEMENT WITH GSI TRANSPORT TOURISM SA, A CORPORATION INCORPORATE D IN FRANCE ('ADP-GSI') FOR BSP LINK SERVICES. 3. FOR PROVIDING BSP LINK SERVICES, ADP-GSI RAISES INVOICES ON GENEVA OFFICE OF IATA, CANADA. 4. GENEVA OFFICE OF IATA, CANADA IN TURN RAISES INVOICES ON THE APPELLANT (AMONGST OTHER BSPS) FOR THE BSP LINK SERVICES. THIS IS DETERMINED DIRECTLY FROM THE INVOICE ISSUED BY ADP-GSI TO GENEVA OFFICE OF IATA, CANADA FOR BSP LINK SERVICES RELATING TO INDIA. GEN EVA IATA, BSP, INDIA 6 OFFICE OF IATA, CANADA ALSO PASSES ON THE PRO-RATA DISCOUNT GIVEN BY ADP-GSI TO THE APPELLANT. GENEVA OFFICE OF IATA, CANADA DOES NOT HAVE ANY MARK UP ON THE INVOICE RAISED ON THE APPELLANT. GENEVA OFFICE OF IATA, CANADA DOES NOT RENDER ANY SERVICE IN CONNECT ION WITH BSP LINK. 5. FOR MAKING THE REMITTANCE TO IATA, CANADA AGAINST THE AFORESAID INVOICE, THE APPELLANT COMPAN Y FILED AN APPLICATION BEFORE THE ASST. DIRECTOR OF INCOME-TAX (INTERNATIONAL TAXATION) - 3(1), MUMBAI ('ADIT') UNDER SECTION 195 OF THE INCOME- TAX ACT ( 'ITA'). 6. THE ADIT PASSED AN ORDER UNDER SECTION 195 OF TH E ITA DATED 12 JANUARY 2006 HOLDING THAT BSPL1NK SERVICES IS IN THE NATURE OF TECHNICAL SERVICES AND THEREFORE THE APPELLANT IS REQUIRED TO DEDUCT TAX A T SOURCE. THE AFORESAID ORDER WAS VALID TILL 31 MARCH 2006. 7. AGAINST THE AFORESAID ORDER THE APPELLANT HAS FI LED AN APPEAL BEFORE YOUR HONOUR ON 28 MARCH 2006 ((LATE O F PAYMENT TAX - 27 FEBRUARY 2006) I.E. WELL WITHIN TH E DUE DATE. 8. FOR SUBSEQUENT REMITTANCES MADE, THE APPELLANT COMPANY AGAIN MADE AN APPLICATION UNDER SECTION 195 AND BASED ON THE EARLIER ORDERS, THE ASSISTANT DIRE CTOR OF INCOME- TAX (INTERNATIONAL TAX) - 3(1) PASSED TH E SIMILAR ORDER UNDER SECTION 195 DATED 4 OCTOBER 200 7. 9. IN PURSUANCE TO THE ABOVE ORDER, THE PAYMENT WAS MADE ON DIFFERENT DATES AND ACCORDINGLY, THE TAX WA S ALSO PAID ON DIFFERENT DATES (28 NOVEMBER 2007 AND 7 FEBRUARY 2008). 10. THE ABOVE ORDER REMAINED IN FILE OF THE APPELLA NT AND INADVERTENTLY THE APPEAL WAS NOT FILED. HOWEVER, SUBSEQUENTLY THE APPELLANT REALISED THE MISTAKE AND HAS FILED AN APPEAL BEFORE YOUR HONOUR ON 29 DECEMBER 2008. THE APPLICANT MOST RESPECTFULLY SUBMITS THAT SINCE THIS WAS AN INADVERTENT ERROR ON THE PART OF THE APPLICANT WITHOUT ANY DELIBERATE INTENT OR PURPOSE, THE DELAY IN FILING THE APPEAL BE CONDONED . 11. WE FURTHER REQUEST YOUR HONOUR TO KINDLY TAKE L IBERAL APPROACH IN CONDONING DELAY IN FILING APPEAL. IATA, BSP, INDIA 7 9.3 . IN SUPPORT OF THE AFORESAID NOTE, RELIANCE HAS BE EN PLACED ON VARIOUS JUDGMENT INCLUDING THE JUDGMENT OF HONB LE SUPREME COURT IN THE CASE OF MST. KATIJI AND OTHERS 167 ITR 471(SC), RAM NATH SAHO ORDER DATED 27.02.2002 (SC) AND N. BALAKSRISHNAN (1998) 7SCC 123 FOR THE PROPOSITION T HAT IN ABSENCE OF ANY MALAFIDE INTENTION FOR CAUSING THE D ELAY DELIBERATELY AS A DILATORY TACTIC, COURT SHOULD NOR MALLY CONDONE THE DELAY. DURING THE COURSE OF HEARING IT HAS BEEN VEHEMENTLY ARGUED BY THE LD. COUNSEL THAT THERE WAS NO MAFAFIDE INTENTION ON THE PART OF THE APPELLANT IN FILING THE APPEAL LATE. THE DELAY OCCURRED INADVERTENTLY DUE T O MISUNDERSTANDING OF LEGAL POSITION AND INCORRECT AD VICE RECEIVED BY IT. THE CAUSE OF JUSTICE WILL SUFFER IN CASE THE DELAY IS NOT CONDONED. 9.4. ON THE OTHER HAND, THE LD. DR HAS CONTENDED THAT L D. CIT(A) HAS RIGHTLY HELD THAT THE APPELLANT WAS ASSI STED BY A WELL ESTABLISHED FIRM OF CONSULTANTS AND THEREFORE, JUSTIFICATION OF DELAY GIVEN BEFORE LD. CIT(A) WAS NOT ACCEPTABLE IN THE GIVEN FACTS OF THE CASE. 9.5. WE HAVE GONE THROUGH THE DETAILED REASONING GIVEN BY THE APPELLANT FOR DELAY IN FILING OF THESE APPEALS AND ALSO GONE THROUGH THE ORDERS OF LD. CIT(A). WE DO NOT FULLY A CCEPT THE CONTENTIONS OF THE REVENUE. IT CANNOT BE SAID THAT THE APPELLANT COULD NOT HAVE RECEIVED WRONG ADVICE OR T HAT IT COULD NOT HAVE MISUNDERSTOOD THE PROVISIONS OF LAW, MEREL Y BECAUSE APPELLANT WAS ASSISTED BY WELL ESTABLISHED FIRM OF CONSULTANTS. IATA, BSP, INDIA 8 THE ISSUES WITH REGARD TO TDS PROVISIONS ON FOREIGN REMITTANCES AND FILING OF APPEAL U/S 248 ARE QUITE COMPLEX IN NATURE. LD. CIT(A) SHOULD NOT HAVE PRESUMED THAT TH E APPELLANT HAD MALAFIDE INTENTION OR DELAY WAS DELIBERATE, WITHOUT THERE BEING ANY CONTRARY MATERIAL ON RECORD . THE APPELLANT HAS JUSTIFIED THE DELAY ALONG WITH DULY S WORN AFFIDAVIT SIGNED BY ITS COUNTRY MANAGER. LD. CIT(A) , BEFORE REJECTING THE DEPOSITION MADE IN THE AFFIDAVIT, DID NOT FIND IT APPROPRIATE TO EXAMINE THE DEPONENT. NO REMAND REPO RT WAS CALLED FROM THE AO. NO FACTS WERE BROUGHT ON RECORD TO SHOW THAT APPROACH OF THE APPELLANT WAS NOT BONAFIDE. IN CORRECT ADVICE MAY BE RECEIVED BY ANY PERSON AT ANY POINT O F TIME. WE DO NOT FIND APPROACH OF LD CIT(A) FOR DEALING WITH THE ISSUE OF CONDONATION OF DELAY, TO BE FAIR AND JUDICIOUS. THE REFORE, KEEPING IN VIEW, THE FACTS OF THE CASE AND JUDGMENT S RELIED UPON BY THE LD. COUNSEL, WE FIND IT APPROPRIATE TO CONDONE THE DELAY AND DIRECT THE LD. CIT(A) AND TAKE THESE APP EALS ON RECORD FOR HEARING, SUBJECT TO COMPLIANCE OF OTHER REQUIREMENTS OF LAW, DISCUSSED HEREINAFTER. 10. FILING SEPARATE APPEAL FOR EACH REMITTANCE: 10.1. THE LD. CIT(A) HAS HELD THAT FOR EVERY REMITTANCES THERE SHOULD BE SEPARATE APPEAL. WE ARE NOT ABLE TO APPRE CIATE AS TO WHAT ARE THE BASIS WITH THE LD. CIT(A) TO LAY DOWN SUCH KIND OF PROPOSITION. IN OUR CONSIDERED OPINION, FOR EVERY O RDER PASSED U/S 195(2), THERE WOULD BE ONLY ONE APPEAL REQUIR ED TO BE FILED U/S 248 BEFORE LD. CIT(A). BUT, IF THE ORDER U/S 195(2) IS IATA, BSP, INDIA 9 FOR THE REMITTANCES FOR MORE THAN ONE FINANCIAL YEA R AND CONSOLIDATED ORDER IS PASSED U/S 195(2), THEN, SEPA RATE APPEAL WILL BE REQUIRED TO BE FILED FOR EACH YEAR. THUS, W E DIRECT LD. CIT(A) TO TAKE UP THE APPEALS KEEPING IN VIEW AFORE SAID GUIDELINES. 11. ELIGIBILITY OF THE APPELLANT FOR FILING OF APPE AL U/S 248: 11.1. IN ALL THESE APPEALS, THE APPELLANT BEFORE US WAS AGGRIEVED WITH THE ORDERS PASSED BY THE RESPECTIVE OFFICER U/S 195(2) HOLDING THE APPELLANT AS LIABLE TO DEDUCT TA X AT SOURCE ON THE IMPUGNED REMITTANCES. SUCH ORDERS ARE NOT AP PEALABLE TO LD. CIT(A) U/S 246A AS WOULD BE CLEAR FROM THE P LAIN READING OF SECTION 246A. THEREFORE, WITH A VIEW TO PROVIDE THE REMEDY OF APPEAL AGAINST SUCH ORDERS, SECTION 248 W AS SPECIFICALLY BROUGHT ON STATUTE, WHEREIN IT HAS BEE N PROVIDED THAT IF A PERSON DISPUTES ITS OBLIGATION TO DEDUCT TAX AT SOURCE U/S 195, THEN, HE MAY APPEAL TO LD. CIT(A) FOR OBTA INING A CLARITY AND DETERMINATION OF THE ISSUE THAT WHETHER THE SAID PERSON IS LIABLE TO DEDUCT TAX AT SOURCE ON CERTAIN REMITTANCES. LD. CIT(A) HAS HELD IN ALL THE APPEAL BEFORE US THA T THE APPELLANT WAS NOT ELIGIBLE TO FILE APPEAL U/S 248 A S IT DID NOT FULFILL REQUISITE CONDITIONS OF SECTION 248 AND THE REFORE, HE DISMISSED THE APPEAL OF THE APPELLANT IN-LIMINIE . 11.2. BEING AGGRIEVED, THE APPELLANT CONTESTED THE ORDER S OF THE LD. CIT(A) BEFORE US, OBJECTING TO THE ACTION O F LD. CIT(A) IN IATA, BSP, INDIA 10 HOLDING THAT THE APPEAL OF THE APPELLANT WAS NOT MA INTAINABLE AS PER PROVISIONS OF SECTION 248 OF THE ACT. 11.3. BEFORE WE PROCEED TO DISCUSS THE FACTS OF THE CASE , WE FIND IT APPROPRIATE TO REPRODUCE SECTION 248, AS AM ENDED BY FINANCE ACT, 2007 W.E.F. 01.06.2007, AS UNDER: WHERE UNDER AN AGREEMENT OR OTHER ARRANGEMENT, THE TAX DEDUCTIBLE ON ANY INCOME, OTHER THAN INTEREST, UNDE R SECTION 195 IS TO BE BORNE BY THE PERSON BY WHOM TH E INCOME IS PAYABLE, AND SUCH PERSON HAVING PAID SUCH TAX TO THE CREDIT OF THE CENTRAL GOVERNMENT, CLAIMS THA T NO TAX WAS REQUIRED TO BE DEDUCTED ON SUCH INCOME, HE MAY APPEAL TO THE COMMISSIONER (APPEALS) FOR A DECLARAT ION THAT NO TAX WAS DEDUCTIBLE ON SUCH INCOME. BEFORE THE AMENDMENT WAS MADE BY FINANCE ACT, 2007, SECTION 248 READ AS UNDER: APPEAL BY PERSON DENYING LIABILITY TO DEDUCT TAX- ANY PERSON HAVING IN ACCORDANCE WITH THE PROVISIONS OF SECTION 195 AND 200 DEDUCTED AND PAID TAX IN RESPECT OF ANY SUM CHARGEABLE UNDER THIS ACT, OTHER THAN INTEREST, WHO DENIES HIS LIABILITY TO MAKE SUCH DEDUCTION, MAY APPEAL TO THE COMMISSIONER (APPEALS) TO BE DECLARED NOT LIABLE TO MAKE SUCH DEDUCTION. 11.4. THE PERUSAL OF THE SECTION 248, AS AMENDED BY THE FINANCE ACT, 2007, REVEALS THAT FOLLOWING CONDITION S ARE IATA, BSP, INDIA 11 REQUIRED TO BE FULFILLED TO ENABLE A PERSON TO FILE AN APPEAL U/S 248 AGAINST ORDER PASSED U/S 195: (A) AN ORDER HAS BEEN PASSED AGAINST THE SAID PERSO N U/S 195(2) OF THE ACT, (B) THE TAX DEDUCTABLE ON THE INCOME AS MENTIONED I N THE AFORESAID ORDER IS TO BE BORNE BY THE PERSON WHO IS PAYER, UNDER AN AGREEMENT OR OTHER ARRANGEMENT. (C) THE SAID PERSON HAS PAID TAX TO THE CREDIT OF T HE CENTRAL GOVERNMENT. IT MAY BE NOTED THAT CONDITION AT POINT NO (B) ABOV E, HAS BEEN INTRODUCED BY THE FINANCE ACT, 2007 W.E.F. 01.06.20 07. 11.5. IN THE APPEAL BEFORE US, IT HAS BEEN HELD BY THE L D. CIT(A) THAT THE APPELLANT HAS NOT FULFILLED THE AFO RESAID CONDITION MENTIONED AT POINT (B) ABOVE I.E. APPELLA NT HAS NOT BEEN ABLE TO SHOW THAT TAX LIABILITY IS TO BE BORNE BY THE APPELLANT AS PER THE AGREEMENT. 11.6. DURING THE COURSE OF HEARING BEFORE US, LD. COUNSE L HAS VEHEMENTLY SUBMITTED THAT LD. CIT(A) HAS NOT CORREC TLY APPRECIATED THE FACTS OF THE APPELLANT AND MISUNDE RSTOOD THE POSITION OF LAW IN THIS REGARD. HE HAD DRAWN OUR AT TENTION UPON CERTAIN EVIDENCES ENCLOSED IN THE PAPER BOOK T O SHOW THAT ULTIMATELY TAX LIABILITY WAS BORNE BY THE APPE LLANT. HE HAS ALSO SUBMITTED IN DETAIL THAT SECTION 248 HAS BEEN AMENDED W.E.F. 01.06.2007, AND THEREFORE, REMITTANCES MADE PRIOR TO THE SAID DATE DO NOT REQUIRE COMPLIANCE OF FIRST CONDIT ION FOR FILING IATA, BSP, INDIA 12 OF APPEAL U/S 248. ON THE OTHER HAND, LD. DR HAS SU BMITTED THAT THE APPELLANT HAS NOT BEEN ABLE TO DEMONSTRATE PROPERLY ON FACTS THAT TAX LIABILITY HAS BEEN BORN BY IT. TH ERE IS CONFUSION AND CONTRADICTION IN EVIDENCES FILED BY T HE APPELLANT AND THEREFORE LD. CIT(A) HAS RIGHTLY REJECTED THE S TAND OF THE APPELLANT. 11.7. WE HAVE GONE THROUGH THE ORDERS PASSED BY THE LD. CIT(A) AND SUBMISSIONS MADE BY BOTH THE SIDES. IN O UR CONSIDERED VIEW THIS ISSUE ALSO REQUIRES RE-EXAMINA TION BY LD. CIT(A) IN TERMS OF OUR DIRECTIONS AND GUIDANCE DISC USSED HEREUNDER: (1) WE FIND FORCE IN THE ARGUMENTS OF LD. COUNSEL THAT RIGHT OF APPEAL IS SUBSTANTIVE RIGHT, AND THEREFORE, IT CANN OT BE CURTAILED WITH RETROSPECTIVE EFFECT. THUS, IN VIEW OF CLEAR AND WELL SETTLED POSITION OF LAW, THE RIGHT OF APPEAL V ESTED IN FAVOUR OF THE APPELLANT ON THE DATE OF MAKING OF REMITTANC E. THE RIGHT OF APPEAL IS A STATUTORY RIGHT AND HAS BEEN CONFERR ED BY THE STATUTE UPON THE PERSONS WHO MAY BE AGGRIEVED WITH CERTAIN PROVISIONS OF THE STATUTE. AS PER SECTION 195, THE OBLIGATION OF DEDUCTION OF TAX AT SOURCE ARISES, SIMULTANEOUSLY A ND IMMEDIATELY, ON THE MAKING OF THE REMITTANCE BY A P ERSON AND THEREFORE, STATUTE GRANTS AND VESTS UPON SAID PERSO N, SIMULTANEOUSLY, A RIGHT OF APPEAL U/S 248, AS SOON AS THE LIABILITY OF TAX IS CREATED. THEREFORE, IN OUR CONS IDERED OPINION, FOR ALL THE REMITTANCES MADE PRIOR TO 01.06.2007, T HE APPEAL CAN BE FILED U/S 248, IN TERMS OF ITS PROVISIONS, A S THEY STOOD IATA, BSP, INDIA 13 PRIOR TO 01.06.2007, AND ACCORDINGLY, FOR THE REMIT TANCES MADE ON OR AFTER 01.06.2007, THE APPEAL SHOULD HAVE BEEN FILED, IN ACCORDANCE WITH SECTION 248, AS IT STOOD AFTER THE AMENDMENT MADE BY FINANCE ACT, 2007. IN OTHER WORDS THE REQUI REMENT OF COMPLIANCE OF THE CONDITION OF BEARING OF LIABILITY OF TDS BY THE PAYER IS NOT REQUIRED TO BE MET FOR FILLING OF APPE AL U/S 248 WITH RESPECT TO THE REMITTANCES MADE PRIOR TO 01.06 .2007. THUS, THE LD. CIT(A) IS DIRECTED TO EXAMINE ALL THE SE FACTS APPEAL AND ADMIT THE SAME ACCORDINGLY, U/S 248. (2) FURTHER, AS FAR AS COMPLIANCE OF CONDITION OF BEAR ING THE TAX LIABILITY BY THE APPELLANT IS CONCERNED, WE FIN D THAT THE REQUIREMENT OF LAW HAS NOT BEEN INDEED PROPERLY UND ERSTOOD BY LD. CIT(A) WHILE EXAMINING THE FACTS OF THE CASE OF THE APPELLANT. THE SECTION USES THE EXPRESSIONS THAT W HERE UNDER AN AGREEMENT OR OTHER ARRANGEMENT... IT SHOWS THA T THE SECTION HAS BEEN DRAWN IN A MANNER SO AS TO INCLUDE WIDER RANGE OF POSSIBILITIES IN WHICH TAX LIABILITY CAN B E BORNE BY A PERSON. THE SECTION COULD HAVE MERELY USED THE TERM AGREEMENT, BUT IT DID NOT STOP THERE AND FURTHER ADDED ANOTHER EXPRESSION I.E. ARRANGEMENT, THEREBY WIDE NING ITS SCOPE. IN OUR OPINION, IT MEANS THAT A PERSON CAN B EAR LIABILITY (OF TAX) AS PER A WRITTEN AGREEMENT OR UNDER SOME A RRANGEMENT MADE BETWEEN THE TWO PARTIES KEEPING IN VIEW THEIR COMMERCIAL EXPEDIENCY. THUS, IT SHALL ALSO COVER A SITUATION WHERE EVEN IF AS PER THE INITIAL AGREEMENT, THE LIA BILITY (OF TAX) WAS NOT UPON THE PAYER, BUT LATER, DUE TO CERTAIN REASONS THE LIABILITY IS ULTIMATELY BORNE BY HIM UNDER ANY ARRA NGEMENT IATA, BSP, INDIA 14 MADE BETWEEN THE PARTIES INTER SE , THEN HE IS ELIGIBLE TO FILE APPEAL U/S 248. IT IS A WELL ACCEPTED PRINCIPLE UND ER THE INCOME TAX LAW THAT A REVENUE OFFICER CANNOT BE SIT IN THE ARM CHAIR OF A BUSINESSMAN TO DECIDE WHAT IS COMMERCIAL LY EXPEDIENT FOR HIM. (3) THUS, IN THE CASES BEFORE US, IF THE TAX LIABILITY IS ULTIMATELY BORN BY IATA- INDIA (I.E. APPELLANT BEFORE US), UND ER ANY ARRANGEMENT MADE BETWEEN THE PARTIES INTER SE , EVEN IF INITIAL WRITTEN AGREEMENT MAY NOT CLEARLY SUGGEST SO, THEN UNDER SUCH CIRCUMSTANCES, HE CAN BE SAID TO HAVE COMPLIED WITH REQUISITE CONDITION OF SECTION 248. THEREFORE, WE S END THIS ISSUE BACK TO THE FILE OF LD. CIT(A) TO EXAMINE THE FACTS OF THESE CASES KEEPING IN MIND THIS LEGAL BACKGROUND. THE AP PELLANT IS DIRECTED TO SUBMIT BEFORE THE LD. CIT(A) ALL REQUIS ITE EVIDENCES TO SHOW THAT THE APPELLANT HAS BORNE IMPUGNED LIABI LITY OF TAX DEDUCTED AT SOURCE UNDER AN AGREEMENT OR OTHER ARRA NGEMENT, AS THE CASE MAY BE. THE LD. CIT(A) SHALL GIVE ADEQU ATE OPPORTUNITY OF HEARING TO THE APPELLANT AND SHALL A LLOW HIM TO RAISE ALL LEGAL AND FACTUAL ISSUES ON THIS ASPECT. THE APPELLANT SHALL ALSO FILE REQUISITE EVIDENCES TO SHOW THAT TH E IMPUGNED AMOUNT OF TAX HAS BEEN PAID BY IT TO THE CREDIT OF CENTRAL GOVERNMENT, WHICH IS ANOTHER MANDATORY CONDITION FO R FILING OF APPEAL U/S 248. 12. THUS, ALL APPEALS ARE SENT BACK TO THE FILE OF THE LD. CIT(A) TO BE DECIDED AFRESH IN TERMS OF OUR DIRECTIONS AS GIVEN ABOVE IN THE ORDER. THE APPELLANT IS PERMITTED TO RAISE A LL LEGAL AND IATA, BSP, INDIA 15 FACTUAL ISSUES, AND TO FILE REQUISITE EVIDENCES WHI CH SHALL BE DULY CONSIDERED BY LD. CIT(A) BEFORE DECIDING THESE APPEALS. 13. THE LD. CIT(A) SHALL ALSO DECIDE THOSE APPEAL ON M ERITS WHICH ARE FOUND MAINTAINABLE BY HIM U/S 248 AFTER G IVING ADEQUATE OPPORTUNITY OF HEARING TO THE APPELLANT TO MAKE ITS SUBMISSIONS AND SUBMIT EVIDENCES IN SUPPORT OF ITS GROUNDS ON MERITS. 14. IN THE RESULT, THESE APPEALS ARE ALLOWED FOR STATI STICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH MARCH, 2016. SD/- (SANJAY GARG ) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER MUMBAI; $ DATED : 16 / 03 /2016 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. & '( / THE APPELLANT 2. )*'( / THE RESPONDENT. 3. + + , ( & ) / THE CIT, MUMBAI. 4. + + , / CIT(A)- , MUMBAI 5. /0 ) 1 , + &' 12 , / DR, ITAT, MUMBAI 6. 3 4 / GUARD FILE. / BY ORDER, * /& ) //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI