TaxTMI 
TaxTMI 
TaxTMI 
2011 (8) TMI 226
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....made by it to the applicant under the belief that such payments were not chargeable to tax in India. In this context, the applicant has approached this Authority with the present application seeking an advance ruling on the question whether the consideration received/receivable by the applicant under the terms of the agreement with Ravva Oil Singapore is liable to tax as royalty as defined in Article 12 of the Double Taxation Avoidance Agreement between India and Australia. 3. In its application, while narrating the facts in support of its application, the applicant has disclosed that the Revenue Authorities while completing the assessment on the tax return filed by Ravva Oil Singapore, disallowed the payments made by it to the applicant. It is alleged that this was on the ground that Ravva Oil Singapore had not withheld any tax on such payment and by invoking section 40(a)(i) of the Income-tax Act. Ravva Oil Singapore has filed an appeal against that order of assessment and the same was pending. 4. On receipt of notice of the application, the Revenue has come forward with a preliminary objection to the admissibility or allowing of the application under section 245R(2) of the Inc....
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....ee, the applicant. No doubt, the amount was basically the income of the applicant and was an expenditure of Ravva Oil Singapore. Ravva Oil Singapore did not approach this Authority for getting a ruling on the question of its liability to deduct tax in terms of section 195 of the Income-tax Act concerning this payment. It proceeded to file its return under the Act and during the assessment sought to claim that this was an allowable expenditure since it was an amount to be paid to the applicant herein for services rendered. Presumably, it had also raised the contention that the amount was not taxable in India under the Income-tax Act and consequently it had no obligation to deduct tax in terms of section 195 of the Act. The Assessing Officer overruled the contention of Ravva Oil Singapore and included the payment in the taxable income of Ravva Oil Singapore. Ravva Oil Singapore filed an appeal challenging that assessment and it was while that appeal was pending, challenging the disallowance, that the applicant approached this Authority with this application. 9. The question raised before us by the applicant is about the nature of the payment received by it from Ravva Oil Singapore; ....
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....its liability to deduct the tax. This Authority observed that it was true that in the process of deciding the legal obligation of the applicant in that case under section 195 of the Act, the liability of the non-resident to pay income tax on the said sum had to be decided, but, on that account, the question or the issue of tax deduction cannot be said to be pending before the Appellate Authority. It noticed that in the appeal of the payee in that case, its liability under the provisions of the Income-tax Act read with DTAA arose for consideration directly and that is the sole question to be decided in the appeal, and in the application before it, the question to be decided at the instance of the payer was about tax deduction at source. After noticing that the question may be inter-related or allied, it was stated that the question raised before the Authority could not be said to be identical nor can it said to be the very same question pending determination by the Appellate Authority. It was postulated that the embargo under the proviso to section 245R(2) should be strictly construed and the applicant should not be denied the remedy to have an early ruling in the matter. It w....
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....Act being attracted. They are part of the discretion that any authority can exercise by deciding to entertain an application or not to entertain it, notwithstanding the fact that it may have jurisdiction to entertain it. Suffice it to say, that even while bearing in mind the principle that the jurisdiction conferred on a statutory Tribunal has to be found within the four corners of the statutes, we have to see whether the pendency of the appeal at the instance of the payer of the amount would stand in the way of this application at the instance of the payee in respect of the same payment being admitted to ruling. 14. What learned counsel for the applicant strenuously attempted was to hang the whole case of disallowance of deduction, on the peg of section 195 of the Act and the invocation of section 40(a)(i) of the Act. With respect, we are not in a position to accept his contention that if a proceeding under section 195 of the Act does not stand in the way of an application for advance ruling being entertained, an order of assessment passed on the failure to make a deduction under section 195 of the Act cannot also stand in the way of entertaining the application, even if it is pa....