DCIT, (Internatonal Taxation), Hyderabad0, Hyderabad V. Madhucon Sino Hydro J.V Hyderabad, Hyderabad

MA 115/HYD/2015

• Counselvise Citation: [2016] 124 COUNSELVISE.COM (IT) 4047 (ITAT-HYDERABAD)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 04-03-2016
• Appeal Filed By: Department
• Bench Allotted: A
• Next Hearing Date: 19-02-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 06-11-2015
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: P MURALI MOHAN RAO
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES A , HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER M.A. NO. 11 5/HYD/2015 ( ARISING OUT OF ITA NO. 246 /HYD/ 201 5 ) ASSESSMENT YEAR : 200 6 - 0 7 THE DEPUTY C OMMISSIONER OF INCOME TAX - 2 (INTERNATIONAL TAXATION) , HYDERABAD (APPLICANT) VS M/S. MADHUCON SINO HYDRO J.V. HYDERABAD [PAN: A A N FM1451G ] (RESPONDENT) FOR REVENUE : SHRI B. KURMI NAIDU , DR FOR ASSESSEE : SHRI P. MURALI MOHAN RAO , AR DATE OF HEARING : 19 - 0 2 - 201 6 DATE OF PRONOUNCEMENT : 04 - 03 - 2016 O R D E R PER B. RAMAKOTAIAH , A .M. : TH E REVENUE PREFERRED THIS MISCELLANEOUS A PPLICATION AGAINST THE ORDER OF ITAT IN ITA NO. 246 /HYD/ 201 5 . T HE SUBMISSIONS MADE IN THE APPLICATI ON, ITSELF CLEARLY STATES THE FACTS AND CONCLUSIONS OF THE ITAT WHICH THE REVENUE CONTENDS AS MISTAKES APPARENT FROM RECORD. PARA 3 OF THE APPLICATION ARE AS UNDER: 3. THE ASSESSING OFFICER TREATED M/S. M ADHUCON SINO HYDRO JV (P AN : AANFM1451G) AS THE AG ENT OF M/S SINO HYDRO CORPORATION (PAN: AACCC0705F) U/S. 163 AND INITIATED ASSESSMENT PROCEEDINGS U/S. 147 OF I.T. ACT. THE ASSESSEE CHALLENGED THE DRAFT ASSESSMENT BEFORE THE DISPUTE 2 M.A. NO. 115 /HYD/2015 M/S. MADHUCON SINO HYDRO J.V. RESOLUTION PANEL (DRP) WHICH WAS PLEASED TO CONFIRM THE SAME AND, ACCOR DINGLY, ASSESSMENT U/S. 147 R.W.S. 163 R.W.S. 144(C) OF I.T. ACT WAS MADE ON 16.01.2015 ON TOTAL INCOME OF RS. 1,89,97,125/ - . AGGRIEVED AGAINST THAT, THE ASSESSEE PREFERRED APPEAL BEFORE THE HON'BLE ITAT (ITA NO.2 46/HYD/2015). THE HON'BLE ITAT WAS PLEASED TO HOLD THE ASSESSMENT AS NULL AND VOID VIDE ITS ORDER DATED 15 - 07 - 2015. IT IS RESPECTFULLY SUBMITTED THAT THE SAID ORDER SUFFERS FROM MISTAKE APPARENT FROM THE RECORD AND, HENCE, REQUESTED THAT THE SAME MAY KINDLY BE AMENDED AS PER THE PROVISION OF SECT ION 254(2) OF I.T.ACT. THE SPECIFIC GROUNDS ON WHICH THE ITAT ANNULLED THE ASSESSMENT ORDER ARE SUMMARIZED BELOW: I. THERE WAS NO DIRECTION IN THE ORDER DT. 27.11.2012 JUSTIFYING THE INITIATION OF PROCEEDINGS U/S. 147. II. EVEN IF SUCH A FINDING/DIRECTION WAS THERE, IT WAS ILLEGAL AND BEYOND THE POWERS OF THE TRIBUNAL. III. THE AO SHOULD NOT HAVE FOLLOWED THE ORDER OF HON'BLE TRIBUNAL BLINDLY AND SHOULD HAVE EXAMINED THE CORRECTNESS THEREOF BEFORE ACTING ON THE SAME. IV. THERE WAS NO SANCTION OF THE APPROPRIATE AUTHORITY FOR ISSUE OF THE NOTICE U/S. 148 OF THE I.T.ACT. V. THE NOTICE U/S. 148 WAS BARRED BY LIMITATION OF TIME. IT IS RESPECTFULLY SUBMITTED THAT EACH OF THE CONCLUSIONS IS BASED ON INCORRECT AND INCOMPLETE APPRECIATION OF FACTS AND CIRCUMSTANCES OF TH E CASE AND THE PROVISIONS OF LAW. THE ABOVE CONTENTIONS WERE ELABORATED WITH DETAILED ARGUMENTS WITH A PRAYER THAT THE SAME MAY BE TREATED AS MISTAKE APPARENT FROM RECORD AND ORDER MAY KINDLY BE AMENDED AND ASSESSEES APPEAL MAY BE DECIDED ON MERITS OF T HE ASSESSMENT. 2. AFTER HEARING THE LD. DR AND LD. COUNSEL, WE DO NOT SE E ANY MERIT IN APPLICATION PREFER RED. THE MOOT POINT IN THE APPLICATION IS WHETHER THE FINDINGS IN ITA NO. 646 AND 701/HYD/2010 IN THE CASE OF M/S. MADHUCON SINO HYDRO J.V . BY ITAT A RE DIRECT IONS OR OBSERVATIONS. PARA 12 OF THE ORDER IS AS UNDER: 3 M.A. NO. 115 /HYD/2015 M/S. MADHUCON SINO HYDRO J.V. 12. IN VIEW OF OUR CONCLUSION EARLIER THAT THE PROFITS OF THE INDIVIDUAL CONSTITUENTS ARE TO BE ASSESSED IN THEIR INDIVIDUAL HANDS AND THERE IS NO QUESTION OF THE ASSESSEE DEDUCTING TA X AT SOURCE WHILE PASSING ON THE PAYMENTS TO THE CONSTITUENTS TOWARDS THEIR SHARE OF WORK CARRIED OUT BY THEM, THE DISALLOWANCE OF RS. 2,71,38,750/ - BEING THE SHARE OF RECEIPTS OF THE CHINES E CONCERN TOWARDS THEIR SHARE OF WORK CARRIED OUT IN THE HANDS OF THE ASSESSEE IS DELETED. HOWEVER, IT HAS TO BE VERIFIED WHETHER THE CHINESE CONCERN HAS OFFERED THIS INCOME FOR TAX IN INDIA. IF THE CHINESE CONCERN HAS NOT FILED INCOME TAX RETURN AND OFFERED THIS AMOUNT AS PART OF THEIR INCOME IN COMPUTING THEIR TAXABLE INCOME, THE SAME SHALL BE ASSESSED AS INCOME OF THE ASSESSEE, AS THE PERSON RESPONSIBLE FOR MAKING THE PAYMENT TO THE NON RESIDENT. IF THE CHINESE CONSTITUENT HAS NOT OFFERED THIS AMOUNT AS PART OF THEIR TAXABLE INCOME IN INDIA , THE AO MAY TAKE SUITABLE AC TION FOR BRINGING THE AMOUNT TO TAX IN ACCORDANCE WITH PROVISIONS OF THE ACT. 3. THIS FINDING OF ITAT WAS CONSIDERED BY ASSESSING OFFICER AS DIRECTION OF THE ITAT AND WITHOUT FOLLOWING THE DUE PROCED URE AS PRESCRIBED UNDER THE LAW INITIATED PROCEEDINGS U /S. 163 AND 147 OF THE IT ACT . THE ITAT I N THE IMPUGNED ORDER HA S HELD THAT THE SAME ARE NULL AND VOID. WHILE DECIDING , THE ITAT ELABORATELY DISCUSSED WHY THE SAME CANNOT BE CONSIDERED AS DIRECTION IN PARA 9 AND EVEN IF IT IS CONSIDERED AS DIRECTION , WHY THE SAME CANNOT BE CONSIDERED AS LEGAL. FURTHER , THE DEFICIENCIES IN NOT RECORDING A SATISFACTION, NOT TAKING APPROVAL FROM THE PRESCRIBED AUTHORITY AND LIMITATION OF TIME IN INITIATING PROCEEDINGS WERE CLEARLY DISCUSSED. SINCE THE F INDINGS IN THE ORDER ARE AFTER DUE CONSIDERATION AND ELABORATE DISCUSSION, THE SAME CANNOT COME WITHIN THE PURVIEW OF MISTAKE APPARENT FROM RECORD . IF THERE IS ANY ERROR OF JUDGMENT, THE SAME HAS TO B E CHALLENGED IN A HIGHER FORUM. THE APPLICATION CLEARLY SUGGEST S THAT THE DECISION TAKEN REQUIRE REVIEW WHICH IS NOT WITHIN THE PURVIEW OF THE PROVISIONS OF SECTION 254(2). AS RIGHTLY HELD BY THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF RAMESH ELECTRIC TRADING C O L TD ., [ 203 ITR 497 ] , THE POWER OF 4 M.A. NO. 115 /HYD/2015 M/S. MADHUCON SINO HYDRO J.V. REVIEW OF ITS OWN OR DER I S NOT WITH ITAT AND SO THE APPLICATION MADE IS NOT MAINTAINABLE. 4 . IN THE RESULT, MISCELLANEOUS APPLICATION IS DISMISSED. THERE IS NO ORDER AS TO THE COST. ORDER PRONOUNCED IN THE OPEN COURT ON 0 4 TH MARCH , 201 6 SD/ - SD/ - (P. MADHAVI DEVI) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED 0 4 TH MARCH, 2016 TNMM COPY TO : 1. THE DEPUTY COMMISSIONER OF INCOME TAX - 2 (INTERNATIONAL TAXATION) , HYDERABAD. 2 . M/S. MADHUCON SINO HYDRO J.V. 8 - 2 - 293/82/A, 1129/A, ROAD NO. 36, JUBILEE HILLS, HYDERABAD. 3 . DRP, HYDERABAD. 4 . CIT, INTERNATIONAL TAXATION, IT TOWERS, AC GUARDS, HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6. GUARD FILE