Wolrdpart Limited, Maharashtra V. DCIT International Taxation 2(2), CHENNAI

MA 108/CHNY/2022

AI Insights

The case involves M/s. Worldpart Limited, which filed a Miscellaneous Application under section 254(2) of the Income-tax Act, 1961, against the order of the Income Tax Appellate Tribunal dated 01.07.2022. The original dispute centered on the denial of benefits under the India-Cyprus Double Taxation Avoidance Agreement (DTAA) by the Assessing Officer, who concluded that the appellant was not the 'beneficial owner' of the interest income. The Tribunal had previously quashed the assessment order but did not address the specific grounds related to the beneficial ownership of interest income. The appellant argued that this oversight was a mistake apparent on record, warranting rectification.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 134890 (ITAT-CHENNAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 01-02-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-11-2022
• Assessment Year: 2014-2015
• Appeal Filed On: 26-09-2022
• Other Referred Cases: Honda Siel Power Products Ltd vs CIT (2007) 165 Taxman 307 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Double taxation relief
• Section: 143(3); 144C; 254(2)

Judgement Text

आयकर अपीलीय अिधकरण, ‘डी’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ᮰ी वी दुगाᭅ राव, ᭠याियक सद᭭य एवं ᮰ी जी. मंजुनाथ, लेखा सद᭭य के समᭃ BEFORE SHRI V. DURGA RAO, HON’BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER Misc. Application No.108/Chny/2022 [In IT(TP)A No. 36/Chny/2018] (िनधाᭅरणवषᭅ / Assessment Year: 2014-15) M/s. Worldpart Limited, C/o. BSR & Associates LLP 8 th Floor, Business Plaza Westin Hotel Campus, 36/3-B, Koregaon Park, Annex Mundhwa Road, Ghorpadi, Pune – 411 001. Maharashtra. [PAN: AAACW-9185-B] v. Deputy Commissioner of Income Tax, International Taxation -2(2), Tower 1, BSNL Building, Greams Road, Chennai – 6. (ᮧाथᭅक /Petitioner) (ᮧ᭜यथᱮ/Respondent) ᮧाथᭅक कᳱ ओरसे/ Petitioner by : Shri. R. Sivaraman, Advocate ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri. P. Sajit Kumar, JCIT सुनवाई कᳱ तारीख/Date of Hearing : 04.11.2022 घोषणा कᳱ तारीख/Date of Pronouncement : 02.02.2023 आदेश /O R D E R PER G. MANJUNATHA, ACCOUNTANT MEMBER: The assessee has filed present Miscellaneous Application u/s. 254(2) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”), against order of the Tribunal in IT(TP)A No: 36/Chny/2018 dated 01.07.2022 relevant to assessment year 2014-15. :-2-: MA. No: 108/Chny/2022 2. The assessee has narrated facts and mistakes stated to be apparent on record from the order of the Tribunal, dated 01.07.2022 and relevant contents of Miscellaneous Application filed by the assessee are reproduced as under: “1.1. The Appellant files this Miscellaneous Application on account of Ground I not heard and adjudicated by Hon"ble Tribunal in its order dated 1 July 2022. 1.2. The brief facts as may be relevant for deciding the aforesaid issue are as stated hereafter: 1.2.1 The case of the Appellant was selected for scrutiny, and the draft assessment order under Section 144C was passed on 30 December 2016. 1.2.2 In its assessment order, the AO held that the Company is not a beneficial owner of income thus denying the India - Cyprus DTAA benefit as claimed by Appellant and taxing part of the interest income at 20% and balance at 30%. 1.2.3 Pursuant to the above, the Appellant filed an appeal before CIT(A) taking the following grounds: 1. On the facts and circumstances of the case, the Id. AO has erred in concluding that the Appellant is not the 'beneficial owner' of interest income and consequently denied benefits under India-Cyprus Double Taxation Avoidance Agreement ("DTAA '). 2.Without prejudice to Ground No. I, on the facts and circumstances of the case, the Id. AO erred in treating XE Advisors India Private Limited ('XE Advisors') as the beneficiary of interest income attributable to Vitelina Holdings Co. Limited ('Vitelina'). 1.2.4 However,,the Appellant did not receive notices for hearing due change in address of the authorised representative of the Appellant and hence, an exparte order was passed upholding the order passed by the AO. 1.2.5 Pursuant to this, the Appellant filed an appeal before Hon'ble Tribunal taking the below grounds: :-3-: MA. No: 108/Chny/2022 1. On the facts and in circumstances of the case and in law, the learned Assessing Officer (Ld. AO') has erred and the Hon. CIT(A) has further erred in upholding/ confirming the action of the Ld. AO in: 1.1 Concluding that the Appellant is not the 'beneficial owner' of interest income and consequently denying benefits under India-Cyprus Double Taxation Avoidance Agreement ('DTAA'). 1. 2 Treating XE Advisors India Private Limited ( 'XE Advisors ') as the beneficiary of interest income attributable to one of the shareholders, Vitelina Holdings Co. Limited ('Vitelina') 2. On the facts and in circumstances of the case and in law, the learned Hon'ble CIT(A) has erred in passing order without giving an opportunity of being heard to the Appellant. 3. On the facts and circumstances of the case, and in law, the A.O has erred on the facts and in law in initiating penalty proceeding under Section 27l(l)(c) of the Act. 1.2.6 In addition to the above, the Appellant also filed an additional ground before Hon 'ble Tribunal as below: 1. Final order passed under Section 143(3) of the Income Tax Act 1961 ('the Act') being time barred by limitation. 1.3. Pursuant to above, the Appellant received Tribunal order dated I July 2022, wherein the Hon'ble Tribunal has accepted the afore-mentioned additional ground i.e. invalidity of the assessment order and has quashed the assessment order. However, with respect to other grounds filed by the Appel I ant with respect to beneficial ownership of interest income, the Hon ble Tribunal has not adjudicated / recorded any findings and has reserved its observations only to additional ground. 1.4. In view of above, the Appellant humbly requests the Hon"ble Tribunal to adjudicate the aforesaid matter with respect to Ground 1 as filed by the Appellant before Hon'ble Tribunal and rectify the captioned order. :-4-: MA. No: 108/Chny/2022 1.5. The Appellant further submits that no other Miscellaneous Application has been filed by it earlier before the Hon'ble Tribunal against the order dated 1 July 2022. 1.6. Further, the Appellant has paid the requisite fee of Rs. 50. 1.7. The Appellant craves leave to make further submission at the time of the hearing.” 3. We have heard both the parties and considered relevant contents of Miscellaneous Application filed by the assessee against order of the Tribunal in IT(TP)A No: 36/Chny/2018, dated 01.07.2022, for assessment year 2014-15. From the contents of Miscellaneous Application filed by the assessee, we find that although, the assessee has raised grounds on merits vide their ground no. 1.1 to 1.2 of memorandum appeal, but the Tribunal has decided appeal on the basis of additional grounds of appeal filed by the assessee and quashed assessment order passed by the AO. The grievance of the assessee by way of its Miscellaneous Application is that although, the assessee has raised grounds on merits, the Tribunal did not adjudicate grounds filed by the assessee which constitute mistake apparent on record which can be rectified u/s. 254(2) of the Act. In this regard, he relied upon the decision of Hon’ble Supreme Court in the case of Honda Siel Power Products Ltd vs CIT (2007) 165 Taxman 307 (SC). :-5-: MA. No: 108/Chny/2022 The Ld. DR, on the other hand strongly opposing petition filed by the assessee submitted that, there is no cause of action left for the assessee because the Tribunal has quashed assessment order passed by the AO on the basis of additional grounds filed by the assessee and thus, grounds raised on merits becomes infructuous and does not require any specific adjudication. 4. Having heard both the sides and considered arguments of the ld. Counsel for the assessee as well as Ld. DR, we find that non-consideration of specific grounds raised by the assessee or revenue constitutes a mistake apparent on record which can be rectified u/s. 254(2) of the Act, as held by Hon’ble Supreme Court in the case of Honda Siel Power Products Ltd vs CIT (supra). In this case, there is no doubt with regard to the fact that the Tribunal did not adjudicate ground no. 1.1 & 1.2 of grounds of appeal filed by the assessee, which relates to issue on merits. Although, the Tribunal has allowed appeal filed by the assessee on the basis of additional grounds raised before the Tribunal, but non- consideration of specific grounds raised by the assessee amounts to a mistake on record which needs to be rectified u/s. 254(2) of the Act and thus, we recall the order of the :-6-: MA. No: 108/Chny/2022 Tribunal in IT(TP)A No: 36/Chny/2018 dated 01.07.2022 for assessment year 2014-15, qua, ground no. 1.1 & 1.2 alone, and direct the Registry to fix the case for hearing in due course with an intimation to both the parties. 5. In the result, Miscellaneous Application filed by the assessee is disposed off in terms of our observation given herein above Order pronounced in the court on 02 nd February, 2023 at Chennai. Sd/- (वी दुगाᭅ राव) (V. DURGA RAO) ᭠याियकसद᭭य/Judicial Member Sd/- (जी. मंजुनाथ) (G. MANJUNATHA) लेखासद᭭य/Accountant Member चे᳖ई/Chennai, ᳰदनांक/Dated: 02 nd February, 2023 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ/CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF