2017 (5) TMI 1054

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....y Commissioner of Income Tax, Circle-2(2), International Taxation, New Delhi rejecting the plea of the Petitioner for being granted a certificate under Sections 197(1)/195 of the Income Tax Act, 1961 ('Act') for Nil deduction of tax at source on the payments received by it from the Oil and Natural Gas Corporation ('ONGC') in respect of a contract dated 30th September, 2016.   2. The facts are that NPCC, is a company incorporated in the United Arab Emirates and based in Abu Dhabi. Its principal activities include fabrication and installation of onshore and offshore oil facilities and submarine pipelines and pipelines coating. It is stated that the provisions of the Agreement for Avoidance of Double Taxation between India and the UAE ....

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.... months as envisaged under Article 5(2)(h) of the Treaty. It is submitted that even if a PE is assumed in India NPCC is not liable to pay tax in respect of the revenues from the outside India activities. In other words, no TDS could be deducted from the payments received by it for such activities. 5. NPCC filed an application on 8th December 2016 with Respondent No.2 seeking a certificate under Section 197 of the Act for nil deduction of tax on the payments received by it from ONGC under the above contract. An alternative prayer was made that in respect of the revenues earned from the inside India activities, Respondent No.1 may direct the ONGC to withhold taxes @ 4% + applicable surcharge and education cess. 6. By the impugned certif....

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....o profits attributable to the India activities and the profits attributable to the activities overseas did not arise. It is pointed out by Mr Bhatia that while leave to appeal against the said judgment has been granted to the Respondents by the Supreme Court, there is no stay of said judgment. 9. Meanwhile this Court has followed its decision dated 29th January 2016 for AYs 2007-08 and 2008-09 and dismissed the Revenue's appeal for AY 2009-10. There is no distinguishing feature as far as the previous contracts that were subject-matter of the above decision and the contract at hand. Prima facie, it appears to the Court that there is no justification for Respondent No.1 not to accept the alternative and 'without prejudice' p....