KREUZ SUBSEA TECHNOLOGIES PTE. LTD.,MUMBAI V. ACIT, INT. TAX. 2(1)(2), DELHI

ITA 1767/DEL/2021

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Kreuz Subsea Technologies Pte. Ltd. appealed against the final assessment order passed by the Assistant Commissioner of Income Tax, which was based on the directions of the Dispute Resolution Panel (DRP). The appellant contested the assessment of total income and the existence of a Permanent Establishment (PE) in India, among other issues. However, during the DRP proceedings, the appellant had opted for a settlement under the VSV Scheme, which included withdrawing objections and submitting relevant forms. Consequently, the DRP directed the A.O. to pass a final assessment order in compliance with the settlement, without discussing the merits of the case. The Tribunal dismissed the appeal, stating that the appellant could not have grievances post-settlement under the VSV Scheme.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 22968 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2017-2018
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VIJAY B. BASANTA
• Keywords: Double taxation relief
• Section: 143(3); 234B; 144C

Judgement Text

" 1 ITA No. 1767/Del/2021 Kreuz Subsea Technologies Pte. Ltd. Vs. ACIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI (DELHI BENCH ‘D’ NEW DELHI BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No. 1767/DEL/2021 (A.Y. 2017-18) Kreuz Subsea Technologies Pte. Ltd. SRBC & Associates LLP 16th Floor, the Ruby,29, SenapatiBapat Marg, Dadar (West), Mumbai PAN: AAFCK7070C Vs. ACIT International Taxation, Civic Centre, Minto Road, New Delhi Appellant Respondent Assessee by None Revenue by Sh. Vijay B. Basanta, CIT(DR) Date of Hearing 11/02/2025 Date of Pronouncement 11/02/2025 ORDER PER YOGESH KUMAR, U.S. JM: Assessee filed the captioned appeal challenging the final assessment order dated 26/03/2021 passed by Assistant Commissioner of Income Tax, Circle International Taxation 2(1)(2)-Delhi u/s 143(3) r.w. Section 144C (13) of the Act on the following Grounds of appeal:- “Based on facts and circumstances of the case, Kreuz Subsea Technologies Pte Limited (hereinafter referred to as 'the Appellant') respectfully craves to prefer an appeal against the assessment order issued by the Assistant Commissioner of Income Tax, International Tax-Circle 2(1)(2), Delhi (hereinafter referred to as the 'Assessing Officer') under Section 143(3) read with Section 144C(13) of the Income-tax Act, 1961 ('the Act') on the following grounds: 2 ITA No. 1767/Del/2021 Kreuz Subsea Technologies Pte. Ltd. Vs. ACIT On the facts and circumstances of the case and in law, the Assessing Officer, pursuant to directions of Hon'ble Dispute Resolution Panel ('DRP\") has: 1. erred in assessing total income at Rs. 6,66,77,861 as against Rs. 7,18,313 returned by the Appellant. 2. erred in passing the final assessment order based on the directions of the Hon'ble DRP which were issued without discussing the merits and facts of the case. 3. erred in concluding that duration of the Appellate in India for AY 2017-18 is 217 days by double counting of overlapping days of vessel in India and not computing the Appellate's duration in India based on solar days. 4. erred in concluding that the Appellant constituted Permanent Establishment ('PE') in India under Article 5(5) of India- Singapore Tax Treaty ('Tax Treaty') without considering the applicability of provisions of Article 5(3) of the Tax Treaty. 5. erred in not applying the specific clause of Article 5(3) of the Tax Treaty on installation activities undertaken by the Appellant and not appreciating the fact that Appellant did not have a PE in India under Article 5(3) of India-Singapore DTAA as the duration of each of its project in India was less than 183 days during the fiscal year. 6. erred in levying interest under Section 234B and section 234C of the Act amounting to Rs. 90,35,006. 7. erred in initiating penalty proceedings under Section 270A of the Act without appreciating that the Appellant has not under- reported any income for the captioned AY. All the above grounds are without prejudice to each other. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, at any time before or at the time of hearing of the appeal, so as to enable the Honorable Members to decide this appeal according to law.” 3 ITA No. 1767/Del/2021 Kreuz Subsea Technologies Pte. Ltd. Vs. ACIT 2. None appeared for the Assessee. The registry has issued several notices, however, neither the Assessee nor the Representative of the Assessee have appeared and made any submission. Considering the above facts and circumstances, we deem it fit to hear the Ld. Departmental Representative and decide the Appeal. 3. The Ld. Departmental Representative submitted that during the DRP proceedings, the Assessee submitted that the Assessee had opted for settlement of Dispute under VSV 2020, by submitting Form No. 1, 2 & 3 issued by designated authority, requested for withdrawal of objection filed in Form No. 35A of the Act. Considering the submission made by the Assessee and verifying the Form No. 1 to 3,the DRP directed the A.O. to consider the said fact and pass consequential final assessment order as per law. Pursuant to the direction of the DRP, the final assessment order was passed by giving effect to the direction of the DRP. However, contrary to the stand taken before the DRP, the present Appeal has been filed by the Assessee finding fault with the A.O./DRP contending that both the DRP and A.O. have not discussed the issue on merit. The Ld. Departmental Representative submitted that the grounds of Appeal of the Assessee are devoid of merit, therefore, sought for dismissal of the Appeal. 4 ITA No. 1767/Del/2021 Kreuz Subsea Technologies Pte. Ltd. Vs. ACIT 4. We have heard the Ld. Departmental Representative and perused the material available on record. Before the DRP, the Assessee vide letter and e-mail dated 20/01/2021 informed the Panel that the Assessee has opted for settlement of dispute in VSV Scheme, 2020 and submitted the copies of Form No. 1 & 2 and again vide e-mail on 27/01/2021 also submitted Form No. 3 issued by the Designated Authority and withdrawn the objection filed in Form No. 35A. The Ld. DRP recording the above submissions made by the Assessee, directed the A.O. to pass consequential final assessment order as per law.Subsequently, the impugned assessment order came to be passed in compliance with the directions of the DRP. Contrary to the stand taken by the Assessee before the DRP, the present Appeal is filed on the ground that both the DRP and A.O. have decided the issue without discussing the merit and facts of the case. In our considered opinion, once the Assessee opted for settlement of dispute under VSV and withdrawals the objection filed in Form No. 35A, neither the DRP nor the A.O. is required to decide the issue on its merits. On the other hand, once the Assessee settles the Dispute under VSV and pays the tax under the Scheme, the Assessee cannot have any grievance. In the absence of any material brought on record portraying the grievance of the Assessee in passing the final 5 ITA No. 1767/Del/2021 Kreuz Subsea Technologies Pte. Ltd. Vs. ACIT assessment order, we find no merits in the Grounds of appeal of the Assessee. Accordingly, the Appeal of the Assessee is dismissed. Order pronounced in the open court on 11th February, 2025 Sd/- Sd/- (BRAJESH KUMAR SINGH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 11.02.2025 R.N, Sr.P.S* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "