2017 (3) TMI 1176

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.... 1. "Under the facts and circumstances of the case the learned CIT(A)- 2,Jaipur has erred in upholding the re-assessment proceeding in order and as per law. 2. The Assessee craves your indulgence to add/amend or alter all or any grounds of appeal before or at the time of hearing." 2. The only effective ground in this appeal is against the validity of re-assessment proceedings. 3. Briefly, stated the facts are that the case was assessed under section 143(3) on the returned income on 15/12/2010. Subsequently, the case was reopened and the assessment under section 143(3) read with section 148 was framed vide order dated 10/3/2015. The reason for re-opening was that, that the assessee had made commission payment of Rs. 31,76,338....

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....ubmitted that the assessment year involved is 2008- 09 the circular was issued on 22/10/2009. Admittedly, the assessee was not required to deduct the tax prior to the circular dated 22/10/2009. The liability if any to deduct tax would arise post 22/10/2009. He submitted the payments were made prior to the issuance of circular and even return of income was filed originally on 25/9/2008. 3.2 On the contrary, the ld. Departmental Representatives opposed the submissions and supported the orders of the authority below. 3.3 We have heard the rival contention, and perused the material available records and gone through the orders of the authorities below. There is no dispute with regard to the fact that reopening was made after four years. T....

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....l has also held that the above non-residents/foreign agents have provided services for earning commission and the services have been rendered outside India, the commission so earned by the non-resident is a business profit. As per the DTAA between India and the UK and the DTAA between India and the UAE, it is mentioned in article 7 of both the DTAAs that the business profit can be taxed in other contracting State in case the enterprise of a Contracting State is having a permanent establishment in other contracting State and it has never been a case admittedly of the Revenue that the aforesaid non-resident companies/entities are having their permanent establishment in India. Circular No. 786, dated February 7, 2000, governs the case of the r....

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....f the authorities below. There is no dispute with regard to the fact that reopening was made after four years. The assessing officer has not brought any material available on record, that the assessee was guilty of not disclosing fully and truly all materials facts necessary for the assessment. We find that the Assessing Officer during the original assessment had made a specific query with regard to payment of commission and the assessee replied the same. Therefore, it cannot be inferred that the materials facts related to the payments of commission was not before Assessing Officer during the original assessment proceedings. The basis for reopening is the circular dated 22/10/2009 which was not having retrospective effect as held by the Jur....