TaxTMI 
TaxTMI 
2010 (7) TMI 803
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....in law and on facts in confirming the action of Assessing Officer in disallowing Rs. 17,92,240 under section 40(a)( i)(A) of the Act. 2. The learned CIT(A) has erred in law and on facts in not appreciating that the appellant was not the beneficial owner of Fees for Technical services and therefore the provision of DTAA does not apply and therefore the appellant was not required to deduct withholding tax, consequently no disallowance under section 40(a)( i)(A) was called for. 3. The learned CIT(A) has erred in law and on facts in not appreciating that the Fees for Technical Services were not made available to it and therefore the provisions of DTAA does not apply and therefore the appellant was not required to deduct withholding tax, consequently no disallowance under section 40(a)(i )(A) was called for. 4. The learned CIT(A) has erred in law and on facts in not appreciating that as per the decisions of Hon'ble the Supreme Court in the case of Ishikawajma-Harima Heavy Industries Ltd. v. DIT, the appellant was not required to deduct tax at all and precisely for this reason, law has been retrospectively amended. However retrospective amendment cannot cast a retrospective burd....
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....ect of technical services directly comes under the preview of Double Taxation Avoidance Agreement (DTAA in short) Article 13 clause 4(c). He further noted that the assessee-company engaged Mr. Whitehead continuously does not in any way change of the services rendered or the fact that the services rendered or the fact that the services were of mature the benefit of which were available to the assessee-company for future use on a reasonably permanent basis. This fact was clearly brought out to the assessee in the show cause dated 3-11-2006. It is once again reiterated that the assessee having once formulated sales strategy as per experience of Mr. Whitehead had the same available with the assessee-company on a reasonably permanent basis. The contention of the assessee-company that it had not rendered services similar to the services for which Mr. Whitehead was engaged it does not come within the purview of DTAA unfounded. But in the case of assessee-company after the services were rendered by Mr. Whitehead if not only had the benefit of using the knowledge of potential market, potential source of raw materials, sales strategy, manufacturing process and long-term alliances on a reason....
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....ctive effect, the word 'rendered in India' has been deleted, but at that time, it was not in real sense that the assessee was not required to deduct the tax. 6. The Ld. counsel, Shri Soparkar further stated that in view of amendment by the Finance Act, 2007 with retrospective effect from 1-6-1976, the insertion of explanation to section 9(2) of the Act, it is impossible to deduct tax in the financial year 1-4-2003 to 31-3-2004, when this provision was not on statute book and this was brought retrospectively. It is well settled, that a person cannot be expected to do an impossible act, nor does law oblige him to do so. This argument was canvassed by the Ld. counsel on the basis of a legal Maxim Lex Non Cogit ad impossibilia, meaning thereby that the law cannot possibly compel a person to do something which is impossible to perform. 7. On the other hand, the SR-DR heavily relied on the orders of lower authorities addition stated that this obligation is caste on the assessee by the Legislature by amending the Act as noted above. In view of this, he stated that the orders of lower authorities be uphold. 8. We have heard the rival contentions and gone through the facts and circ....
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....ation, in its present form, does not do away with the requirement of rendering of services in India for any income to be deemed to accrue or arise to a non-resident under section 9. It has been held that on a plain reading of the Explanation, the criteria of rendering services in India and the utilization of the service in India laid down by the Supreme Court in its judgment in the case of Ishikawajma-Harima Heavy Industries Ltd. (supra) remains untouched and unaffected by the Explanation. Further the Legislature vide Finance Bill, 2010 in order to remove any doubt about the legislative intent of the aforesaid source rule, substituted in place of the existing Explanation a new Explanation to specifically state that the income of a non-resident shall be deemed to accrue or arise in India under clause (v) or clause (vi) or clause (vii) of sub-section (1) of section 9 and shall be included in his total income, whether or not, (a)the non-resident has a residence or place of business or business connection in India; or (b)the non-resident has rendered services in India. This amendment was made retrospectively from 1-6-1976 and will accordingly, apply in relation to the assessme....
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.... formation of the Corporation. The law does not contemplate or require the performance of an impossible act - Lex non cogit ad impossibilia. It is now to be seen whether the expression "included therein" in rule 2(1)(b) is alone sufficient to negative the logical legal effect of section 7 of the LIC Act." While dealing with question as to whether an assessee can be liable to pay interest for failure to pay advance tax during the year when the liability to pay tax had arisen on account of amendment to law which took place after the end of the year, Hon'ble Madras High Court in the case of CIT v. Revathi Equipment Ltd. [2008] 298 ITR 67, reproduced and thereafter approved the reasoning contained in the following passage of the Tribunal order. "We have no doubt in our mind that the levy of interest under sections 234B and 234C are of mandatory nature, but at the same time, if we read sections 234B and 234C carefully, we find that such liability is fastened to those assessees who are liable to pay advance tax. Now, let us see who are liable to pay advance tax and how. Sections 207 and 208 read as under : '207. Tax shall be payable in advance during any financial year, in accor....
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....(AT) 34 it was held that in such situations the legal dictum ad impossibilia would be attracted. The simple meaning of this dictum is that 'law cannot compel you to do the impossible'. In the case before us also, the assessee could not have visualized till the last instalment of advance tax, i.e., March 15, 2001, that it would not be entitled to deduct the VRS payments. Therefore, the assessee could not have done anything other than to estimate the liability to pay advance tax on the basis of existing provisions. We are of the considered opinion that in such situation, it cannot be said that the assessee was liable to pay advance tax. Once we come to the conclusion that the assessee was not liable to pay advance tax, there is no question of charging tax under sections 234B and 234C. In similar circumstances in the case of Priyanka Overseas Ltd. v. Deputy CIT [2001] 79 ITD 353 (Delhi) where the assessee had treated the receipt of cash assistance as capital receipts, which was subsequently amended to be business receipt by the Finance Act, 1990, it was held that in such cases interest under sections 234B and 234C was not chargeable. In these circumstances, we think that the assessee ....