MARRIOTT INTERNATIONAL INC, MUMBAI V. DCIT (IT) - 3(2)(1), MUMBAI

MA 222/MUM/2022

AI Insights

The case involves Marriott International Inc., which filed a Miscellaneous Application against the order of the Income Tax Appellate Tribunal dated 6th May 2022. The application sought to address the non-consideration of an additional ground raised during the appeal concerning the legality of the draft assessment order under section 144C of the Income Tax Act. The Tribunal acknowledged the oversight and the need to re-examine the additional ground, leading to the recall of the previous order and setting the stage for a focused re-hearing on this issue.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 113109 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 19-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 22-06-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 23-08-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 2; 195; 144C; 13; 22

Judgement Text

I N THE INCOME TAX APPELLATE TRIBUNAL “I” BENCH, MUMBAI BEFORE SHRI PRASHANT MAHARISHI, AM AND SHRI SANDEEP SINGH KARHAIL, JM MA N os.220 to 22 3/ Mu m / 202 2 A ri si n g o ut o f I TA No s . 323 2 to 32 3 5 /M um / 20 18 (Ass essm ent Y ea rs 2006-07 t o 200 9-10) M a r r i o t t I n t e r n a t i o n a l I n c C / o . D e l o i t t e T o u c h e T o h m a t s u I n d i a L L p 3 6 B , D R R K S h i r o d k a r M a r g , P a r e l , M u m b a i-4 0 0 0 1 2 Vs . D CI T (I T ) 3(2 )(1 ) M umb a i (Applicant) (Respondent) PAN No. AAECM8040K Assessee by : Shri Pa ras Sa v la, & Shri P rat ik P od da r, ARs Revenue by : Shri Ad it ya M . Ra i, D R D ate of h e ari ng : 23.06 .20 23 Date of pronouncement : 20.09 .20 23 O R D E R PER PRASHANT MAHARISHI, AM: 01. MA No. 220 - 223/Mum/2022 for A.Y. 2006-07 to A.Y. 2009-10, is filed in order of the coordinate bench dated 6 th May, 2022 in ITA Nos. 3232 to 3235/Mum/2018 for the above respective assessment years, stating that the order of the coordinate bench suffers from mistake apparent on record on following grounds: – i. Additional ground raised in the appeal on 8 th May 2019 stating that the draft assessment order passed by the learned Assessing Officer in the second round of proceedings was bad in law as the same was passed in violation of provisions of section 144C of the Act. The coordinate bench has not adjudicated on the additional ground of appeal raised by the assessee but has decided the issue only on the original grounds of appeal raised by the Page | 2 MA No. 220-223/Mum/2022 Marriot International Inc.; A.Y. 07-08 assessee. It is further claimed that the bench to hear the matter stating that if the bench was not in agreement on the original grounds, the matter would be kept for further hearing and one more opportunity of hearing will be given to the assessee to address the additional ground of appeal. The claim in the miscellaneous application is that the coordinate bench has inadvertently missed putting the matter up for clarification to deal with the additional ground of appeal raised by the assessee and therefore, the order of the coordinate bench suffers from the mistake apparent from the record. ii. The coordinate bench while deciding the issue on the merit does not consider certain facts. It is claimed that in the first ground of proceedings the coordinate bench has remanded the matter back to the assessing officer for the limited direction/purpose i.e. to consider the question of taxation of receipt as royalty in the hands of applicant as a representative of assessee or in the hands of any other group company. The learned Assessing Officer specifically admits on the issue at Para number 15 (C) of the assessment order dated 22 nd March, 2016, that assessee company being a non-resident cannot be treated as an agent of the non-resident entity as the relevant transaction for taxation purpose is not a transfer of capital asset in India. Therefore, in the second round of proceedings before the coordinate bench limited aspect was open that if the assessee cannot be treated as a representative, then no addition could have been sustained in the hands of the applicant. However vital aspect of the scope of remand by the coordinate bench arising in the first round and the conclusion of the Assessing Officer that the assessee cannot be treated as a representative assessee under section 163 of the Act has been missed and not taken into consideration. This is so because by order dated 6 th May 2022 the coordinate bench has directed the learned Assessing Officer to consider whether the payer can also be treated as an agent of the non-resident iii. Certain observation and points were neither argued by the assessee nor by the Department and are incorrectly referred without giving any further opportunity to the assessee to present its case and explain the factual discrepancies with respect to Page | 3 MA No. 220-223/Mum/2022 Marriot International Inc.; A.Y. 07-08 paragraph number 13 of the order of the coordinate bench. By that paragraph the coordinate bench has held that “it is not the contention of the assessee that no tax should have been deducted under section 195 of the Act on the payment made by Juhu Beach resorts Ltd, V M Salgoankar and brothers private limited and Chalet hotels Ltd and we are also conscious of the fact that the sum is received by the assessee and provisions of section 163 of the Act also needs to be examined.” Assessee states that no such question was posed during the hearing to clarify the above finding. 02. The learned Authorized representative reiterated the submissions made in the miscellaneous application. 03. The learned Departmental Representative vehemently objected to the miscellaneous application stating that there is no error in the order of the coordinate bench. Additional ground raised by the assessee was not adjudicated on the clear-cut understanding that if the issue is decided on the merits of the case, there is no requirement of brought to the additional ground raised. It is not the case that original grounds of appeal are necessarily to be decided in favour of the assessee. Therefore, non- consideration of the additional ground was not a mistake apparent from record but unnecessary concession given by the assessee. On all other issues, it was submitted that assessee is seeking reconsideration of its decision. 04. We have carefully considered the rival contention and perused the orders of the coordinate bench as well as the miscellaneous application filed by the assessee. We find that the learned Assessing Officer has already examined the applicability of section 163 and at paragraph number 15 (3) of the assessment order specifically held that the applicant cannot be held as a representative assessee. As the learned assessing officer has already held that the applicant cannot be treated as representative assessee, no addition could have been made in the hands of the assessee as specifically directed by the Tribunal in the first round as per order dated 14 January 2015. In view of the above finding of the learned assessing officer, the direction of the coordinate bench in paragraph number 14 of the order to the learned assessing officer to examine whether according to the provisions of section Page | 4 MA No. 220-223/Mum/2022 Marriot International Inc.; A.Y. 07-08 163 of the act can be re-examined in the hands of the non-resident assessee is an error in the order of the coordinate bench. Hence, the same is omitted. Further, it is the claim of the assessee that an additional ground was raised in all these four appeals stating that the draft assessment order passed by the learned Assessing Officer in the second round of proceedings was bad in law as the same was passed in violation of provisions of section 144C of the Act. We find that the coordinate bench did not at all consider the above additional ground. Non-consideration of the additional ground raised by the assessee with respect to its admission and adjudication results into a mistake apparent on record. In view of this, the Miscellaneous Application filed by the assessee for all these assessment years in ITA No. 3232 to 3235/Mum/2018 dated 6 th May, 2022 is allowed as order of the coordinate bench suffers from the mistake as envisaged under section 254 (2) of the Act in not deciding the additional ground of appeal. Accordingly, the impugned order dated 6 May 2022 is recalled and Miscellaneous Application of the assessee is allowed to the extent of admission and adjudication of additional ground of appeal raised by the assessee. Registry is directed to fix these appeals for hearing limited to this issue. 05. In the result, the Miscellaneous Applications of the assessee are allowed as indicated above. Order pronounced in the open court on 20.09.2023. Sd /- Sd /- (SAN D EEP SI N GH KARH AI L) (P RASH ANT M AH ARI SHI ) (JUDI CI AL M EM BER) (AC COUN T AN T M EM BER) Mumbai, Dated: 20.09.2023 Sudip Sarkar, Sr.PS/Dragon Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. vBY ORDER, True Copy// Page | 5 MA No. 220-223/Mum/2022 Marriot International Inc.; A.Y. 07-08 Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Mumbai