Gifford & Partners Ltd. (Now ramboll UK Ltd), Kolkata V. DDIT(1), Kolkata, Kolkata

MA 40/KOL/2017

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 6301 (ITAT-KOLKATA)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 02-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 17-03-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Double taxation relief; Period of limitation; Retrospective amendment; Permanent establishment; Right to appeal; Revised return
• Section: 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI N.V.VASUDEVAN, JM & SHRI WASE EM AHMED, AM] M.A.NO.39/KOL/2017 (A/O I.T.A NO.1489/KOL/2011 ) ASSESSMENT YEARS : 2005- 06 GIFFORD AND PARTNERS LTD. . -VS.- A.D.I.-1 (1), KOLKATA KOLKATA [PAN : AACCG 2101 R] (APPLICANT) (RESPONDENT) M.A.NO.40/KOL/2017 (A/O I.T.A NO.2082/KOL/2010 ) ASSESSMENT YEARS : 2007- 08 GIFFORD AND PARTNERS LTD. . -VS.- A.D.I.-1 (1), KOLKATA KOLKATA [PAN : AACCG 2101 R] (APPLICANT) (RESPONDENT) FOR THE APPLICANT : SHRI AVISHEK KEJRIWAL, ACA FOR THE RESPONDENT : SHRI.N.B.SOM, J CIT DATE OF HEARING : 19.01.2018 DATE OF PRONOUNCEMENT : 02.02.2018. ORDER PER N.V.VASUDEVAN, JM THESE ARE MISCELLANEOUS APPLICATIONS FILED BY THE A SSESSEE U/S.254(2) OF THE INCOME TAX ACT, 1961 (ACT) PRAYING FOR RECTIFICATIO N OF CERTAIN APPARENT ERRORS IN THE COMMON ORDER DATED 6.4.2016 OF THE TRIBUNAL IN ITA NOS.1482/KOL/2011 AND 2082/KOL/2010 RELATING TO AY 2005-06 & 2006-07 RESP ECTIVELY. 2. GIFFORD & PARTNER LTD. ('GIFFORD' OR 'THE ASSES SEE') HAD ENTERED INTO A CONTRACT WITH GARDEN REACH SHIPBUILDING ENGINEERS ('GRSE') IN IND IA FOR RENDERING THE FOLLOWING SERVICES WITH REGARD TO MODERNISATION OF THE EXIST ING SHIPYARD OF GRSE:- 2 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 2 PREPARATION OF CONCEPT PAPERS, PRELIMINARY PROJECT REPORT (PPR); DETAILED PROJECT REPORT (DPR); ENGINEERING SERVICES; PROJECT MANAGEMENT SERVICES; AND POST - CONSTRUCTION SERVICE THE SAID SERVICES WERE TO BE PERFORMED BOTH FROM INDIA AS WELL AS FROM THE UNITED KINGDOM ('UK'). THE LOCAL SERVICES WERE RENDERED TH ROUGH INDEPENDENT INDIAN SUB- CONTRACTORS AND THE FOREIGN SERVICES WERE RENDERED PARTLY BY AN INDEPENDENT FOREIGN SUB- CONTRACTOR I.E. APPLEDORE AND PARTLY BY THE ASSESSE E, FROM ITS HEAD OFFICE IN THE UK. FEES FOR THE SAID SERVICES WERE PAYABLE IN TWO PA RTS I.E. FOREIGN CURRENCY PAYMENT IN USD AND LOCAL CURRENCY PAYMENTS IN INR. THE WORK ON THE SAID CONTRACT WAS STARTED IN APRI L 2004 AND THE ASSESSEE HAS SINCE BEEN FILING TAX RETURNS IN INDIA FOR INCOMES EARNED FROM THE SAID CONTRACT. 2. THE ISSUES THAT AROSE FOR CONSIDERATION IN THE AFORESAID APPEALS WAS REGARDING TAXABILITY IN INDIA OF THE SUMS RECEIVED FROM GRSE FOR SERVICES RENDERED UNDER THE CONTRACT REFERRED TO IN THE EARLIER PARAGRAPH. 3. BY A COMMON ORDER DATED 6.4.2016 THE TRIBUNAL H ELD THAT THE SUMS RECEIVED FROM GRSE ACCRUED AND AROSE IN INDIA AND THAT THE SAME I S TAXABLE IN INDIA AS FEES FOR TECHNICAL SERVICES (FTS). THE TRIBUNAL FURTHER HEL D THAT FTS HAS TO BE TAXED UNDER ARTICLE 13(2) OF THE DTAA BETWEEN INDIA AND UK. THE RELEVANT CLAUSES OF THE DTAA PROVIDES AS FOLLOWS: ARTICLE 13 ROYALTIES AND FEES FOR TECHNICAL SERVICES 1. ROYALTIES AND FEES FOR TECHNICAL SERVICES ARISING IN A CONTRACTING STATE AND PAID TO A RESIDENT OF THE OTHER CONTRACTING STATE M AY BE TAXED IN THAT OTHER STATE. 3 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 3 2. HOWEVER, SUCH ROYALTIES AND FEES FOR TECHNICAL SER VICES MAY ALSO BE TAXED IN THE CONTRACTING STATE IN WHICH THEY ARISE AND ACCOR DING TO THE LAW OF THAT STATE; BUT IF THE BENEFICIAL OWNER OF THE ROYALTIES OR FEE S FOR TECHNICAL SERVICES IS A RESIDENT OF THE OTHER CONTRACTING STATE, THE TAX SO CHARGED SHALL NOT EXCEED : (A) IN THE CASE OF ROYALTIES WITHIN PARAGRAPH 3(A) OF T HIS ARTICLES, AND FEES FOR TECHNICAL SERVICES WITHIN PARAGRAPHS 4 (A) AND (C) OF THIS ARTICLE (I)DURING THE FIRST FIVE YEARS FOR WHICH THIS CONVE NTION HAS EFFECT ; (AA) 15 PER CENT OF THE GROSS AMOUNT OF SUC H ROYALTIES OR FEES FOR TECHNICAL SERVICES WHEN THE PAYER OF THE ROYALTIES OR FEES FOR TECHNICAL SERVICES IS THE GOVERNMENT OF THE FIRST MENTIONED CONTRACTI NG STATE OR A POLITICAL SUB- DIVISION OF THAT STATE, AND (BB) 20 PER CENT OF THE GROSS AMOUNT OF SUCH ROYALT IES OR FEES FOR TECHNICAL SERVICES IN ALL OTHER CASES; AND (II) DURING SUBSEQUENT YEARS, 15 PER CENT OF THE GROSS A MOUNT OF SUCH ROYALTIES OR FEES FOR TECHNICAL SERVICES; AND 4. THE TRIBUNAL THEREAFTER CONCLUDED THAT FTS HAS TO BE TAXED IN INDIA AS PER ARTICLE 13(2) OF THE DTAA BUT AS PER THE PROVISIONS CONTAIN ED IN THE INCOME TAX ACT, 1961 (ACT). THE FOLLOWING WERE THE FINDINGS OF THE TRIBU NAL IN PARAGRAPH 55 OF ITS ORDER: 55. WE HAVE ALREADY SEEN CLAUSE 3.10 OF THE AGREEM ENT BETWEEN THE ASSESSEE AND GRSE (SEE PARA-47 OF THIS ORDER) WHICH PROVIDES THAT ALL PLANS, DRAWINGS, SPECIFICATIONS, DESIGNS, REPORTS AND OTHER DOCUMENT S PREPARED BY THE CONSULTANT IN PERFORMING THE SERVICES SHALL BECOME AND REMAIN THE EXCLUSIVE PROPERTY OF GRSE. WE ARE THEREFORE OF THE VIEW THAT THE REQUIR EMENTS OF CLAUSE (C) OF ARTICLE 13(4) OF THE DTAA ARE ALSO SATISFIED IN THE PRESENT CASE AND THEREFORE THE SOURCE COUNTRY (INDIA) HAS A RIGHT TO TAX THE FEE I N QUESTION IN ACCORDANCE WITH ARTICLE 13(2) OF THE DTAA BUT SUBJECT TO THE LIMITA TION OF RATE OF TAX AS LAID DOWN IN ARTICLE 13(2). THE PROVISIONS OF THE ACT I N THIS REGARD ARE CONTAINED IN SEC.115A OF THE ACT..... 5. IN PARAGRAPH 72 & 73, THE TRIBUNAL CONCLUDED ON THE ISSUE OF TAXABILITY OF FTS AS FOLLOWS: 4 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 4 72. HAVING COME TO THE CONCLUSION THAT THERE WAS NO PE OF THE ASSESSEE IN INDIA DURING THE RELEVANT PREVIOUS YEAR, THE QUESTI ON THAT WOULD NOW REQUIRE CONSIDERATION IS WITH REGARD TO TAXABILITY OF THE F TS UNDER ARTICLE 13(2) OF THE TREATY. A READING OF ARTICLE 13(2) OF THE DTAA (REP RODUCED IN THE EARLIER PART OF THIS ORDER) WOULD SHOW THAT TAXATION HAS TO BE IN A CCORDING WITH THE ACT. THE PROVISIONS CONTAINED IN THE ACT IN THIS REGARD ARE SEC.115A OF THE ACT. IN THIS REGARD, THE RELEVANT PROVISIONS OF SECTION 115A OF THE ACT, NEEDS TO BE LOOKED INTO. WE HAVE ALREADY REPRODUCED THE PROVISIONS OF SEC.115A OF THE ACT AND SEC.44AD OF THE ACT IN THE EARLIER PART OF THIS ORD ER. U/S.115A OF THE ACT, INCOME BY WAY OF FTS RECEIVED BY A NON RESIDENT WOU LD BE TAXED AT 20% ON GROSS BASIS ONLY IF ALL THE FOLLOWING CONDITIONS AR E SATISFIED:- I) THE INCOME IS RECEIVED FROM GOVERNMENT OR AN IND IAN CONCERN IN PURSUANCE OF AN AGREEMENT; II) SUCH AGREEMENT WAS MADE AFTER 31ST DAY OF MAY, 1997 BUT BEFORE THE 1ST DAY OF JUNE, 2005; AND III) SUCH INCOME DOES NOT FALL WITHIN THE PURVIEW O F SUB-SECTION (1) OF SECTION 44DA OF THE ACT. 73. WE HAVE ALREADY SEEN THAT THE ASSESSEE IN THE PRESENT CASE INSTANT CASE, THERE IS NO DOUBT THAT THE ASSESSEE FULFILLS CONDITION (I ) AND CONDITION (II) AS MENTIONED ABOVE. AS REGARDS CONDITION NO. (III), THE PROVISI ONS OF SUB-SECTION (1) OF SECTION 44DA OF THE ACT, FTS WOULD FALL WITHIN THE PURVIEW OF SECTION 44DA(1) OF THE ACT, ONLY IF IT IS ACTIVELY CONNECTED TO THE PE OF THE NON-RESIDENT IN INDIA. PE FOR THE PURPOSE OF THIS SECTION HAS BEEN DEFINED IN SEC TION 92F(IIIA) OF THE ACT WHICH READS AS UNDER:- '(IIIA) 'PERMANENT ESTABLISHMENT', REFERRED TO IN C LAUSE (III), INCLUDES A FIXED PLACE OF BUSINESS THROUGH WHICH THE BUSINESS OF THE ENTERPRISE IS WHOLLY OR PARTLY CARRIED ON;' WE HAVE IN THE EARLIER PARAGRAPHS ALREADY HELD THAT THERE WAS NO PE IN INDI IN THE FORM OF FIXED PLACE OF BUSINESS THROUGH WHICH THE B USINESS OF THE ASSESSEE WAS WHOLLY OR PARTLY CARRIED ON IN INDIA. AS SUCH, THE ASSESSEE WOULD BE ENTITLED TO THE BENEFIT OF THE PROVISIONS OF SECTION 115A OF TH E ACT AND BE TAXED AT 20% OF THE GROSS RECEIPTS. WE ALSO HOLD THAT TAX LIABILITY BORNE BY GRSE WILL ALSO NEED TO BE GROSSED UP FOR ARRIVING AT GROSS RECEIPTS OF THE ASSESSEE AND AFTER SUCH GROSSING UP SUCH RECEIPTS HAVE TO BE TAXED AT 20%. WE HOLD ACCORDINGLY. 6. IN THIS MAS IT HAS BEEN SUBMITTED BY THE ASS SESSEE THAT AS TO THE PROVISIONS OF SECTION 90(2) OF THE ACT, THE PROVISION OF DOMESTIC LAW OR DTAA WHICHEVER IS BENEFICIAL IS APPLICABLE TO THE NON-RESIDENT ASSESS EE. IT IS THE PLEA OF THE ASSESSEE THAT U/S 5 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 5 115A OF THE ACT FTS IS CHARGEABLE TO TAX @20% ON TH E BASIS OF THE GROSS RECEIPTS, WHEREAS AS PER THE PROVISION OF ARTICLE 13(2)(BB)(I I) FTS IS TAXABLE @ 15% OF THE GROSS AMOUNT OF SUCH FTS. IT IS THE STAND OF THE ASSESSE E THAT SINCE THE PROVISIONS OF THE DTAA ARE MORE BENEFICIAL, THE TRIBUNAL OUGHT TO HA VE DIRECTED THAT TAX SHOULD BE LEVIED IN ACCORDANCE WITH THE PROVISION OF DTAA RATHER THA N THE PROVISION OF SECTION 115A OF THE ACT. IT IS NOT IN DISPUTE THAT ASSESSMENT ORDER FOR A.Y.2005-06 AND 2007-08 WAS BEYOND THE PERIOD OF FIVE YEARS FOR WHICH THE CONVE NTION BETWEEN INDIA AND U.K CAME INTO EFFECT AND THEREFORE ARTICLE 13(2)(BB)(II) WOU LD ALONE APPLY IN THE PRESENT CASE. 7. WHEN THIS MISCELLANEOUS APPLICATION WAS TAKEN UP FOR CONSIDERATION IT WAS NOTICED THAT THE MISCELLANEOUS APPLICATION WAS FILE D ON 17.03.2017 WHEREAS THE ORDER OF THE TRIBUNAL WAS PASSED ON 06.04.2016. AS PER THE P ROVISION OF SECTION 254(2) OF THE ACT AS AMENDED BY THE FINANCE ACT, 2016 W.E.F. 01.0 6.2016 AN APPLICATION FOR RECTIFICATION OF APPARENT ERRORS IN THE ORDER OF TH E TRIBUNAL HAS TO BE FILED WITHIN SIX MONTHS FROM THE END OF THE MONTHS IN WHICH THE ORDE R WAS PASSED. PRIOR TO THE AFORESAID AMENDMENT, AN APPLICATION FOR RECTIFICATI ON OF MISTAKE APPARENT ON THE RECORD COULD BE FILED AT ANY TIME WITHIN FOUR YEARS FROM T HE DATE OF THE ORDER. SINCE THE PRESENT MISCELLANEOUS APPLICATION HAS BEEN FILED AFTER THE AFORESAID STATUTORY AMENDMENT BY THE FINANCE ACT, 2016, A QUESTION THAT WAS RAISED WAS A S TO WHETHER THE MAS WOULD BE BARRED BY TIME UNDER THE AMENDED PROVISION OF LAW. 8. ON THIS ASPECT AFTER CONSIDERING THE RIVAL SUBM ISSIONS WE CONCLUDE AS FOLLOWS :- SECTION 254(2) OF THE ACT OF 1961 PRIOR TO THE AMEN DMENT BY THE FINANCE ACT, 2016 W.E.F.1.6.2016 READS AS UNDER:- 254(2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN FOUR YEARS FROM THE DATE OF THE ORDER, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FRO M THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1), AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASS ESSING OFFICER: PROVIDED THAT AN AMENDMENT WHICH HAS THE EFFECT OF ENHANCING AN ASSE SSMENT OR REDUCING A REFUND OR OTHERWISE INCREASING THE LIABILITY OF THE ASSESSEE, SHALL NOT BE MADE UNDER THIS SUB- 6 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 6 SECTION UNLESS THE APPELLATE TRIBUNAL HAS GIVEN NOT ICE TO THE ASSESSEE OF ITS INTENTION TO DO SO AND HAS ALLOWED THE ASSESSEE A REASONABLE OPP ORTUNITY OF BEING HEARD AFTER THE AMENDMENT BY THE FINANCE ACT, 2016, W.E.F . 1.6.2016, SEC.254(2) READ AS UNDER: 254(2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN SIX MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED , WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMEND ANY ORDER PASSED BY IT UNDER SUB-SECTION (1), AND SHALL MAKE SUCH AMENDMENT IF THE MISTAKE IS BROUGHT TO IT S NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER: IT CAN BE SEEN FROM THE AFORESAID AMENDMENT THAT TH E TIME LIMIT FOR FILING MISCELLANEOUS APPLICATION U/S.254(2) HAS BEEN CURTAILED TO 6 MONT HS FROM THE DATE OF THE PASSING OF THE ORDER FROM A PERIOD OF 4 YEARS FROM THE DATE OF THE ORDER. 9. THE ADMITTED FACTS IN THE PRESENT M.A. ARE THAT THE ORDER AGAINST WHICH THE PRESENT M.A. IS BEING FILED WAS PASSED PRIOR TO 1.6 .2016 AND THE APPLICATION U/S.254(2) IN RESPECT OF SUCH ORDER IS FILED AFTER 1.6.2016. THE QUESTION BEFORE US IS AS TO WHETHER IN RESPECT OF ORDERS PASSED PRIOR TO 1.6.2016 AND W HERE M.A. U/S.254(2) IN RESPECT OF SUCH ORDERS IS FILED AFTER 1.6.2016, WHETHER THE T IME LIMIT PRESCRIBED U/S.254(2) PRIOR TO THE AMENDMENT BY FINANCE ACT, 2016 SHOULD APPLY OR THE TIME LIMIT PRESCRIBED AFTER THE AMENDMENT BY FINANCE ACT, 2016 SHOULD APPLY? 10. THE HONBLE M.P.HIGH COURT IN WRIT PETITION NO. 4144/2017 IN THE CASE OF DISTRICT CENTRAL CO-OP. BANK LTD., RAISEN VS. UNIO N OF INDIA VIDE ITS JUDGMENT DATED 09TH OCTOBER, 2017 HAD TO DEAL WITH AN IDENTICAL CA SE SUCH AS THE ASSESSEE. THE HONBLE COURT RELIED ON THE DECISION OF THE APEX CO URT IN THE CASE OF M. P. STEEL CORPORATION VS. COMMISSIONER OF CENTRAL EXCISE REPO RTED IN (2015) 7 SCC 58 WHEREIN IT WAS HELD THAT THOUGH PERIODS OF LIMITATION, BEIN G PROCEDURAL LAW, ARE TO BE APPLIED RETROSPECTIVELY, YET IF A SHORTER PERIOD OF LIMITAT ION IS PROVIDED BY A LATER AMENDMENT TO A STATUTE, SUCH PERIOD WOULD RENDER THE VESTED RIGH T OF ACTION CONTAINED IN THE STATUTE NUGATORY AS SUCH RIGHT OF ACTION WOULD NOW BECOME T IME BARRED UNDER THE AMENDED 7 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 7 PROVISION. THEREFORE A STATUTE WHICH WHILE PROCEDU RAL IN ITS CHARACTER, IF IT AFFECTS VESTED RIGHTS ADVERSELY IT HAS TO BE CONSTRUED AS PROSPECTIVE. FOLLOWING THE AFORESAID VIEW, THE HONBLE M.P.HIGH COURT HELD AS FOLLOWS: 08. KEEPING IN VIEW THE JUDGMENT REFERRED BY THEIR LORDSHIPS IN THE AFORESAID CASE AND THE JUDGMENT DELIVERED BY THEIR LORDSHIPS IN THE M. P. STEEL CORPORATION (SUPRA), IN THE PRESENT CASE ALSO THE NEW LAW OF LIMITATION PROVIDI NG A SHORTER PERIOD CANNOT CERTAINLY EXTINGUISH A VESTED RIGHT OF ACTION. 09. THE AMENDMENT HAS BEEN MADE EFFECTIVE VIRTUALLY IN CASE OF ASSESSEE WITH RETROSPECTIVE EFFECT THOUGH THE AMENDMENT DOES NOT SHOW THAT IT IS APPLICABLE WITH RETROSPECTIVE EFFECT, HOWEVER, THE EXISTING RIGHT H AS BEEN EXTINGUISHED WITH RETROSPECTIVE EFFECT IN CASE OF THE ASSESSEE. 10. IN THE CONSIDERED OPINION OF THIS COURT, THE LE GISLATURE SHOULD HAVE GRANTED SOME TIME TO THE ASSESSEES WHO COULD HAVE FILED AN APPEA L WITHIN A PERIOD OF FOUR YEARS AND THE SAME HAS NOT BEEN DONE TILL THE AMENDMENT CAME INTO FORCE EXTINGUISHING THE RIGHT TO FILE AN APPEAL. 11. IN THE CONSIDERED OPINION OF THIS COURT, APPLIC ATION PREFERRED BY THE ASSESSEE SHOULD NOT HAVE BEEN DISMISSED BY THE TRIBUNAL ON ACCOUNT OF THE AMENDMENT WHICH HAS REDUCED THE PERIOD OF LIMITATION OF FOUR YEARS TO S IX MONTHS. 12- RESULTANTLY, THE IMPUGNED ORDER PASSED BY THE RESPONDENT ON 23/12/20 16 IS HEREBY QUASHED AND THE WRIT PETITION STANDS ALLOWED. THE INCOME TAX APPELLATE T RIBUNAL IS DIRECTED TO DECIDE THE APPLICATION PREFERRED UNDER SECTION 254(2) ON MERIT S WITHIN A PERIOD OF THREE MONTHS FROM THE DATE OF RECEIPT OF CERTIFIED COPY OF THIS ORDER. THE PARTIES SHALL APPEAR BEFORE THE TRIBUNAL ON 30TH OF OCTOBER, 2017. 11. FOLLOWING THE AFORESAID DECISION, WE HAVE TO HO LD THAT THE PRESENT MA THOUGH FILED AFTER 1.6.2016 WILL CONTINUE TO BE GOVERNED B Y THE LAW OF LIMITATION LAID DOWN U/S.254(2) ON THE DATE WHEN THE ORDER AGAINST WHICH THE MA IS SOUGHT TO BE FILED WAS PASSED AND NOT LAW AS PER THE LAW AS AMENDED BY THE AMENDMENT W.E.F. 1.6.2016. THE MA THEREFORE HAS TO BE CONSTRUED AS ONE FILED WITHI N THE PERIOD OF LIMITATION AND HAS TO BE ACCEPTED AS VALIDLY PRESENTED WITHIN THE PERIOD OF LIMITATION. THE OBJECTION OF THE REGISTRY IS THEREFORE HELD TO BE NOT IN ACCORDANCE WITH LAW. 12. THOUGH THE LD. DR MADE SUBMISSIONS BY PLACING R ELIANCE ON THE CBDT CIRCULAR NO.3/2017 BY POINTING OUT THAT THE HONBLE MADHYA P TRADESH HIGH COURT IN THE AFORESAID DECISION HAS NOT CONSIDERED THE EFFECT OF THE CBDT CIRCULAR, WE ARE OF THE VIEW THAT IT WOULD NOT BE APPROPRIATE TO ADVANCE AR GUMENTS ON THE CORRECTNESS OF THE 8 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 8 DECISION OF THE HONBLE HIGH COURT TO WHICH TRIBUNA L IS SUBORDINATE. WE THEREFORE DEEM IT NOT NECESSARY TO DEAL WITH THE OBJECTIONS O F THE LD. DR IN THIS REGARD. 13. AS FAR AS THE MERITS OF THE MISCELLANEOUS APPLI CATION FILED BY THE ASSESSEE IS CONCERNED, THE LD. COUNSEL FOR THE ASSESSEE REITERA TED THE SUBMISSIONS AS WERE MADE IN THE MISCELLANEOUS APPLICATION. 14. THE LD. DR SUBMITTED THAT THE MISTAKE POINTED OUT BY THE ASSESSEE IN THESE MISCELLANEOUS APPLICATIONS CANNOT BE SAID TO BE A M ISTAKE APPARENT FROM THE RECORD. IN THIS REGARD THE LD. DR DREW OUR ATTENTION TO THE VA RIOUS GROUNDS OF APPEAL RAISED BY THE ASSESSEE BEFORE THE TRIBUNAL WHICH WERE AS FOLLOWS : GROUNDS OF APPEAL THE GROUNDS STATED HERE UNDER ARE INDEPENDENT OF, AND WITHOUT PREJUDICE, TO ONE ANOTHER. I FOR THAT THE ASSESSING OFFICER AND THE DISPUTE RE SOLUTION PANEL ( HEREINAFTER REFERRED TO AS THE AUTHORITIES BELOW) ERRED IN HOLD ING THAT THE APPELLANT IS HAVING A PERMANENT ESTABLISHMENT('PE'} IN INDIA IN TERMS OF DOUBLE TAXATION AVOIDANCE AGREEMENT BETWEEN INDIA AND UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND ('DTAA '. II WITHOUT PREJUDICE TO THE GROUND NO. 1, THE APPEL LANT STATES AND SUBMITS THAT THE AUTHORITIES BELOW ERRED IN HOLDING THAT, THE ENTIRE AMOUNT RECEIVED BY THE APPELLANT, INCLUDING THOSE IN UNITED STATES DOLLAR ( 'USD '}WAS ATTRIBUTABLE TO THE ALLEGED PE IN INDIA AND TAXABLE UNDER SECTION 44DA OF THE INCOME TAX ACT, 1961. (THE 'ACT ').; III FOR THAT THE AUTHORITIES BELOW ERRED THAT ANY I NCOME NOT ATTRIBUTABLE TO THE ACTIVITIES PERFORMED IN INDIA CAN BE CHARGED TO TAX IN INDIA OR FOR ANY REASON ALLEGED OR AT ALL; IV FOR THAT THE AUTHORITIES BELOW ERRED IN HOLDING THAT THE APPELLANT'S CLAIMS THAT THAT IT DID NOT HAVE ANY PE IN INDIA OR THAT THE IN COME EARNED IN RESPECT OF ACTIVITIES OUTSIDE INDIA IN USD WAS NOT ASSESSABLE IN INDIA, COULD NOT BE ENTERTAINED WITHOUT FILING A REVISED RETURN. 9 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 9 V FOR THAT THE AUTHORITIES BELOW ERRED IN DISALLOWI NG RS 3,136,682 PAID TO M/S APPLEDORE INTERNATIONAL LTD FOR WORKS CARRIED OUT B Y THEM IN THE UNITED KINGDOM ON THE GROUND THAT THE SAME WAS TAXABLE IN INDIA AN D TAX WAS REQUIRED TO BE DEDUCTED THEREON UNDER SECTION 195 OF THE ACT. THE REASONS GIVEN FOR SUCH DISALLOWANCE ARE NOT SUSTAINABLE ON FACTS AND LAW; VII FOR THAT THE AUTHORITIES BELOW ERRED IN DISALLO WING A SUM OF RS 2,858,996 ON THE GROUND OF DELAYED DEPOSIT OF TAX DEDUCTED AT SO URCE; VIII FOR THAT THE AUTHORITIES BELOW ERRED IN HOLDIN G THAT A SUM OF RS 3,733,151 WAS TO BE ADDED TO THE INCOME ON ACCOUNT OF GROSSING UP ; IX FOR THAT THE AUTHORITIES BELOW ERRED IN HOLDING THAT ANY INTEREST COULD BE CHARGED UNDER SECTION 234B AND/OR 234C OF THE ACT. 15. ACCORDING TO HIM THE ASSESSEE HAS NOT RAISED AN Y GROUND WITH REGARD TO ANY RATE OF TAX AND THEREFORE THE ASSESSEE CANNOT BE PERMITT ED TO RAISE THIS PLEA IN THE MISCELLANEOUS APPLICATION. IN THIS REGARD OUR ATTEN TION WAS DRAWN BY THE LD. DR TO THE FOLLOWING DECISION : I) TOKHEM ENTERPRISES V. INCOME-TAX OFFICER, WARD 20(3 )(1), MUMBAI, REPORTED IN [2011] 132 ITD 375 (MUMBAI )/[2012] 144 TTJ 256 (MU MBAI) II) VYLINE GLASS WORKS LTD. V. ASSISTANT COMMISSIONER O F WEALTH-TAX, CO. CIRCLE- III(4), CHENNAI REPORTED IN [2015] 231 TAXMAN 535 ( MADRAS)/[2015] 373 ITR 355 (MADRAS)/[2015]281 CTR 317 (MADRAS). 16. IN THE AFORESAID DECISION IT WAS HELD THAT IN A MISCELLANEOUS APPLICATION NEW GROUND NOT SET FORTH IN THE MEMORANDUM OF THE APPE AL OR IN THE ADDITIONAL GROUNDS CANNOT BE TAKEN. SIMILAR RULING RENDERED BY THE HON BLE CALCUTTA HIGH COURT IN THE FOLLOWING CASES WERE BROUGHT TO OUR NOTICE : I) SUMAN TEA AND PLYWOOD INDUSTRIES REPORTED IN 226 IT R 34(CAL) II) GOKUL CHAND AGARWAL (202 ITR 14) III) PR.COMMISSIONER OF INCOME TAX, SURAT-1 VS. GOMTI SI LK MILLS LTD. IN SPECIAL CIVIL APPLICATION NO.15301 OF 2017 AND SPECIAL CIVI L APPLICATION NO.15302 OF 2017 DATED AUGUST 29, 2017 AND REPORTED IN 2017- TIOL-1768-HC-AHM- IT. 10 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 10 17. HIS NEXT SUBMISSION WAS THAT THE POWER TO RECTI FY A MISTAKE U/S 254(2) OF THE ACT IS RESTRICTED TO ONLY TO RECTIFY A MISTAKE APPARENT ON THE FACE OF THE RECORD. IF THE ISSUE SOUGHT TO BE AGITATED IN A MISCELLANEOUS APPLICATIO N INVOLVES DEBATABLE ISSUES WHICH INVOLVES LONG DRAWN PROCESS OF REASONING, THEN IT C ANNOT BE SAID THAT THERE IS A MISTAKE APPARENT ON THE FACE OF THE RECORD. IN SUPPORT OF T HE ABOVE PROPOSITION THE FOLLOWING DECISION WERE BROUGHT TO OUR NOTICE : I) HONBLE SUPREME COURT IN THE CASE OF DEVA MITAL POW DERS PVT. LTD. VS COMMISSIONER OF TRADE TAX, U.P. IN CIVIL APPEAL NO. 5607 OF 2007. II) MARUTI INSURANCE DISTRIBUTION SERVICES LTD REPORTED IN 212 TAXMANN 123 (DELHI). 18. THE LD. DR ALSO BROUGHT TO OUR NOTICE THAT THE TRIBUNAL HAS DEALT WITH THE CONTENTIONS OF THE ASSESSEE ON THE TAXABILITY OF FT S BEFORE THE AO AND THE DRP AS WELL AS BEFORE THE TRIBUNAL AND IN ALL THESE SUBMISSIONS MADE BY THE ASSESSEE, THE ISSUE WITH REGARD TO THE TAXABILITY OF FTS AT A CONCESSIONAL R ATE OF 15% AS PER ARTICLE 13(2) OR DTAA AS AGAINST THE HIGHER RATE OF 20% OF GROSS REC EIPTS U/S 115A OF THE ACT WAS NEVER RAISED BY THE ASSESSEE. IT WAS THE CONTENTION OF TH E LD. DR THAT IN THE GARB OF THE MISCELLANEOUS APPLICATION, THE ASSESSEE SEEKS TO RE VIEW OF THE ORDER OF THE TRIBUNAL. FOR THE ABOVE REASONS THE LD. DR PRAYED THAT THE MISCEL LANEOUS APPLICATIONS ARE WITHOUT ANY MERITS AND THE SAME SHOULD BE DISMISSED. 19. WE HAVE GIVEN A VERY CAREFUL CONSIDERATION TO T HE RIVAL SUBMISSION. AT THE OUTSET, WE NOTICE THAT IN THE SYNOPSIS OF THE ARGUMENTS FIL ED BY THE ASSESSEE ON 12.12.2012 IN PARA 2.5 , THE ASSESSEE HAS TAKEN A SPECIFIC PLEA T HAT FTS HAS TO BE TAXED AT A CONCESSIONAL RATE OF 15% OF THE GROSS RECEIPTS AS P ER THE PROVISION OF ARTICLE 13(2) OF THE DTAA AS AGAINST HIGHER RATE OF TAX PROVIDED AT 20% OF GROSS RECEIPTS U/S 115A OF THE ACT. THE LAW IS WELL SETTLED THAT THE POWERS OF THE TRIBUNAL U/S 254(1) OF THE ACT ARE VERY WIDE AND THEREFORE IN AN APPEAL BEFORE THE TRI BUNAL, THE TRIBUNAL COULD HAVE AND 11 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 11 OUGHT TO HAVE CONSIDERED THE AFORESAID SUBMISSION O F THE ASSESSEE. THE FACT THAT THERE IS NO SPECIFIC GROUND TAKEN BY THE ASSESSEE IN THIS RE GARD IS IMMATERIAL BECAUSE THE RATE OF TAX TO BE APPLIED DOES NOT REQUIRE ANY ADJUDICATION OR FINDING TO BE GIVEN ON FACTS. IN OTHER WORDS, THE APPLICABILITY OF TAX COULD BE DECI DED ON THE BASIS OF FACTS AND MATERIAL ALREADY AVAILABLE ON RECORD. IN SUCH CIRCUMSTANCES, IT CANNOT BE SAID THAT THE ISSUE WITH REGARD TO RATE OF TAX WAS NOT THE SUBJECT MATTER OF THE APPEAL AT ALL, ESPECIALLY IN THE LIGHT OF THE SPECIFIC CONTENTION PUT FORTH BY THE ASSESSE E ON THIS ASPECT IN THE WRITTEN SUBMISSIONS DATED 12.12.2012. 20. IN THE PRESENT CASE THERE IS AN AGREEMENT BETWE EN INDIA AND U.K. FOR AVOIDANCE OF DOUBLE TAXATION AND THEREFORE THE ASSESSEE IS ENTIT LED TO PLEAD THAT TAXABILITY HAS TO BE AS PER THE PROVISION OF THE ACT OR THE DTAA WHICHEVER IS BENEFICIAL IS TO THE ASSESSEE. SINCE THE TAXABILITY OF FTS AT 15% OF THE GROSS REC EIPTS AS PER ARTICLE 13(2)(BB)(II) IS MORE FAVOURABLE THAN THE PROVISION OF SECTION 115A OF THE ACT, THE FTS IN QUESTION HAS TO BE TAXED AT 15% ON GROSS BASIS AS PER THE DTAA. WE ARE OF THE VIEW THAT THE MISTAKE POINTED OUT IN THE MISCELLANEOUS APPLICATIONS IS AP PARENT IN THE FACE OF THE RECORD. EVEN ASSUMING THAT THE LONG DRAWN PROCESSING OF REASONIN G IS REQUIRED TO DECIDE THE MISCELLANEOUS APPLICATION BUT IF ULTIMATELY THERE C AN BE ONLY ONE POSSIBLE VIEW THEN IT CANNOT BE SAID THAT THE POWER TO RECTIFY SUCH MISTA KE IS OUTSIDE THE AMBIT OF SECTION 254(2) OF THE ACT. THE LD. DRS ARGUMENTS THAT THE ASSESSEE IS SEEKING REVIEW OF THE ORDER OF THE TRIBUNAL IS NOT CORRECT. AS WE HAVE AL READY STATED THAT THIS PLEA WAS ALREADY PUT FORTH IN THE SUBMISSIONS MADE BEFORE THE TRIBUN AL BUT WAS NOT CONSIDERED AND OMITTED TO BE CONSIDERED BY THE TRIBUNAL. FOR ALL T HE ABOVE REASONS WE ACCEPT THE MISCELLANEOUS APPLICATIONS FILED BY THE ASSESSEE. 21. THE ORDER OF THE TRIBUNAL IS AMENDED BY SUBSTI TUTING THE EXISTING PARAGRAPHS 72 & 73 OF THE ORDER OF THE TRIBUNAL FOR THE FOLLOWING P ARAGRAPHS 72 & 73: '72. HAVING COME TO THE CONCLUSION THAT THERE WAS N O PE OF THE ASSESSEE IN INDIA DURING THE RELEVANT PREVIOUS YEAR, THE QUESTION THA T WOULD NOW REQUIRE 12 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 12 CONSIDERATION IS WITH REGARD TO TAXABILITY OF THE F TS. CONSIDERING THE FATS OF THE CASE, AS PER ARTICLE 13(2) OF THE INDIA-UK DTAA, FT S INCOME OF NON-RESIDENT IS TAXABLE @ 15% ON GROSS RECEIPTS. WHEREAS AS PER SEC TION 115A OF THE ACT, FTS IS TAXABLE @ 20% ON GROSS RECEIPTS. 73. SINCE, THE PROVISIONS OF THE INDIA-UK DTAA IS M ORE BENEFICIAL, THE ASSESSEE IS ENTITLED TO THE BENEFIT OF THE PROVISIONS OF SECTIO N 90(2) OF THE ACT. ACCORDINGLY, FTS IN THE GIVEN CASE WOULD BE TAXED AT THE BENEFIC IAL RATE OF 15% ON GROSS RECEIPTS AS PROVIDED IN ARTICLE 13(2) OF THE INDIA- UK DTAA. WE ALSO HOLD THAT THE TAX LIABILITY BORNE BY GRSE WILL ALSO NE D TO BE GR OSSED UP FOR ARRIVING AT GROSS RECEIPTS OF THE ASSESSSEE AND AFTER SUCH GROSSING U P SUCH RECEIPTS HAVE TO BE TAXED @ 15%. WE HOLD ACCORDINGLY. 22. IN THE RESULT THE MISCELLANEOUS APPLICATIONS AR E ALLOWED. ORDER PRONOUNCED IN THE COURT ON 02.02.2018. SD/- SD/- [WASEEM AHMED] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 02.02.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.GIFFORD & PARTNERS LTD. (NOW RAMBOLL UK LTD.) C/O B.L.JHA & CO., GF-1, GILLANDER HOUSE, 8, N.S.ROAD, KOLKATA-700001. 2. D.D.I.T. (1), KOLKATA. 3. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER SENIOR PR IVATE SECRETARY HEAD OF OFFICE/D.D.O., I.T.A.T., KOLKATA BENCHE S 13 M.A.NOS.39&40/KOL/2017 (A/O ITA NOS.1489/KOL/2011 & 2082/KOL/2010) GIFFORD & PARTNERS LTD (NOW RAMBOLL UK LTD.) A.YR..2005-06 & 2007-08 13