Convergys Customer Management Group Inc., New Delhi V. Assistant Director of Income Tax, New Delhi

ITA 4679/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3767 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-06-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 26-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Double taxation relief; Opportunity of being heard; Principle of natural justice; Permanent establishment; Advance ruling

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A. NO.4679/DEL/2010 ASSESSMENT YEAR : 2007-08 CONVERGYS CUSTOMER MANAGEMENT VS. ASSTT. D.I.T., GROUP INC., 201, EAST FOURTH STREET, CIRCLE-1(1),IN TERNATIONAL CINCINNATI, OHIO 45202, USA TAXATION, NEW DELHI PAN NO.AACCC 8989 M (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PAWAN KUMAR, AR RESPONDENT BY : MS. Y. KAKKAR, SR. DR ORDER PER K.G. BANSAL,AM: IN THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE ASSESSMENT ORDER IN RESPECT OF THE FINDING ABOUT THE EXISTENCE O F PERMANENT ESTABLISHMENT (PE FOR SHORT) AND ATTRIBUTION OF PROFIT TO THE PE. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DE TAILED SUBMISSIONS WERE MADE BEFORE THE DISPUTE RESOLUTION PANEL (DRP FOR SHORT) ON BOTH THE ISSUES, BUT IT HAS CONFIRMED THE DRAF T ORDER BY MAKING SUMMARY OBSERVATIONS AS UNDER:- WE HAVE CONSIDERED THE DRAFT ASSESSMENT ORDER ALSO THE WRITTEN SUBMISSION AND ARGUMENTS OF THE ASSESSEES REPRESENTATIVE. IT IS FOUND THAT THE ASSESSING OFFICER H AS GIVEN DETAILED REASONS FOR CONSIDERING THE PE STATUS OF THE ASSESSEE SUBSIDIARY IN INDIA. IN VIEW OF THE REASONS GIVE N AS ALSO THE EARLIER STATUS DISCUSSED IN THE ASSESSMENT ORDER WE DO NOT FIND ANY REASONS TO DISAGREE WITH THE FINDING OF THE ASSESSING OFFICER. AS THE PE STATUS HAS BEEN ACCEPTED HENCE ATTRIBUTION OF PROFIT CANNOT BE DENIED, THE ASSESSING OFFICER HAS BA SED THE ATTRIBUTION OF PROFIT AS PER DETAILS AVAILABLE AN D THE 2 TAXABILITY OF CLAIMED EXPENSES HAS ALSO BEEN EXPLAINED IN DETAILS. THE ASSESSING OFFICER HAS ALSO EXPLAINED THE CHARGES OF IPLC COST @10% AS PER DTAA RELYING ON THE DECISION OF ADVANCE RULING AND ITAT DECISION. IN VIEW OF THE REASONS DISCUSSED WE DO NOT FIND ANY FAULT WITH THE DRAFT ORDER OF THE ASSESSING OFFICER AND HENCE NO DIRECTIONS ARE BEING ISSUED. IT IS SUBMITTED THAT THE ORDER DOES NOT DEAL WITH THE SUBMISSIONS OF THE ASSESSEE IN A SPEAKING MANNER AND, THEREFORE, THE SAME HAS BEEN PASSED IGNORING THE PRINCIPLES OF NATURAL JUSTICE. ACCORDINGLY, IT IS PRAYED THAT THE ORDER MAY BE RESTORED TO THE FILE OF THE DRP FOR CONSIDERING THE SUBMISSIONS AND PASSING A SPEAKING ORDER. 1.2 THE LEARNED DR HAD NO OBJECTION TO RESTORE THE M ATTER TO THE FILE OF THE LEARNED DRP. 2. WE HAVE CONSIDERED THE FACTS OF THE CASE AND SUBMISSIO NS MADE BEFORE US. WE ARE OF THE VIEW THAT THE LEARNED DRP IS BOUND TO CONSIDER THE OBJECTIONS OF THE ASSESSEE TO THE DRAFT ORDE R AND THEREAFTER PASS A SPEAKING ORDER. THIS HAS NOT BEEN DON E. THEREFORE, THE MATTER IS RESTORED TO THE FILE OF THE DRP FOR GRA NTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND PASSING A SPEAKING ORDER. 3. IN RESULT, THE APPEAL IS TREATED AS ALLOWED FOR STAT ISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 16.06.2011 SOON AFTER THE CONCLUSION OF THE HEARING. SD/- SD/- ( RAJPAL YADAV ) ( K.G. BA NSAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 16.06.2011. NS 3 COPY FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).