TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1346
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....y Ld.A.R. We therefore for the sake of convenience, proceed to dispose of both the appeals by a consolidated order. However, we proceed with narrating the facts for the appeal in ITA No.250/PUN/2015 for the assessment year 2006- 07. 3. The facts as culled out from the material on record are as under: Assessee is a non-resident company incorporated in Australia, is a tax resident of Australia under the Double Taxation Avoidance Agreement (DTAA) between India and Australia. Assessee electronically filed its return of income for A.Y. 2006-07 on 01.03.2007 declaring total income of Rs Nil. A notice u/s 148 of the Act dt.28.03.2013 was issued and served on assessee and in response to which assessee furnished various details. AO noticed that assessee had installed routers, servers, network lines and other devises in India which were owned, monitored and maintained by assessee. During the relevant period assessee had two servers, one at Mehsana in Gujarat and another at Gurgaon, Haryana. Through the network, data storage and data retrieval were provided to Indian Company for which payments were received by the assessee. AO was of the view that payments received for use of network, serv....
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....o reopening of the assessment proceedings, the Learned DRP erred in not adjudicating upon Objection No.2 being non appreciation of the order passed by Pune Income Tax Appellate Tribunal by AO in connection with taxability of IT Support Services in respondents own case. 2. Without prejudice to the relief granted by the DRP in relation to reopening of the assessment proceedings and ground No. 1 above, the Learned DRP erred in not adjudicating upon Objection No.3 being taxability of receipts for IT support services amounting to INR 69,31,786 as Fees for Technical Services. 3. Without prejudice to the relief granted by the DRP in relation to reopening of the assessment proceedings and ground No. 1 above, the Learned DRP erred in not adjudicating upon Objection No.4 being taxability of receipts for IT support services amounting to INR 69,31,786 as Royalty. 4. It is further prayed that the Hon'ble Appellate Authority is entitled to consider the claim and has the power to adjudicate the same in accordance with law." 5. Before us, Ld DR supported the order of AO. Ld AR on the other hand supported the order of DRP and reiterated the submissions made before lower authorities and s....
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....come to the conclusion that there is escapement of income. If the Assessing Officer chooses to close his eyes on the material/documents furnished by assessee and starts scanning the documents of other concerns and in the process comes across some information about assessee, which the assessee has already disclosed, such information cannot partake the character of "new tangible material". 16. In so far contentions of the department that the Assessing Officer did not get opportunity to apply his mind on the documents furnished by assessee as the original assessment was completed u/s.143(1), we do not find any force in the said contentions. The Hon'ble Delhi High Court in the case of CIT Vs. Orient Craft Ltd. (supra) has held that expression, 'reason to believe' does not have different meaning, where assessments are framed u/s.143(1) and where assessment is completed u/s.143(3) of the Act. The relevant extract of the findings of the Hon'ble High court are as under : "13. Having regard to the judicial interpretation placed upon the expression "reason to believe", and the continued use of that expression right from 1948 till date, we have to understand the meaning of the expression ....
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....essment has been completed earlier by intimation u/s.143(1) of the Act. The Hon'ble High Court while holding so, considered the decisions rendered by the Hon'ble Apex Court in the case of CIT Vs. Rajesh Jhaveri Stock Brokers (P) Ltd. reported as 291 ITR 500 and CIT Vs. Zuari Estate Development & investment Co. Ltd. (supra). The relevant extract of the judgment rendered in the case of Khubchandani Healthparks (P) Ltd. Vs. ITO (supra) reads as under : "3. On hearing the parties, we find that the Apex Court in Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd. 291 ITR 500, had an occasion to deal with identical facts, namely reopening Notices issued under Section 148 of the Act where assessment is completed earlier by Intimation under Section 143(1) of the Act. In the above case, the Apex Court held that a Notice for-reopening an assessment under Section 148 of the Act could only be justified if the Assessing Officer has reason to believe that income chargeable to tax has escaped assessment. This decision of the Supreme Court in Rajesh Jhaveri Stock Brokers P. Ltd. (Supra) has not been disturbed by the Apex Court in Zuari Estate Development and Investment ....
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.... of section 144C. For the sake of quick reference, the relevant provisions of section 144C are reproduced hereinunder : "(5) The Dispute Resolution Panel shall, in a case where any objection is received under sub-section (2), issue such directions, as it thinks fit, for the guidance of the Assessing Officer to enable him to complete the assessment. (6) The Dispute Resolution Panel shall issue the directions referred to in subsection (5), after considering the following, namely:- (a ) draft order; (b ) objections filed by the assessee; (c ) evidence furnished by the assessee; (d ) report, if any, of the Assessing Officer, Valuation Officer or Transfer Pricing Officer or any other authority; (e ) records relating to the draft order; (f ) evidence collected by, or caused to be collected by, it; and (g ) result of any enquiry made by, or caused to be made by, it. (7) The Dispute Resolution Panel may, before issuing any directions referred to in sub-section (5),- (a ) make such further enquiry, as it thinks fit; or (b ) cause any further enquiry to be made by any income-tax authority and report the result of the same to it. (8) The Dispute Resolution Panel may ....
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.... international transactions. A view to the contrary would render the entire assessment proceedings unworkable. The assessee cannot possibly have a part of the assessment order decided by the DRP and a part of it decided in an appeal before the CIT(Appeals). There is, in any event, no provision for the same in the Act. 87. Moreover, the DRP has vide jurisdiction as is evident, inter-alia, from sub-section (8) of section 144-C. The DRP is required to issue directions under sub-section (5) after considering a variety of matters mentioned in sub-section (6) of section 144-C. First, clause (a) of sub-section (6) does not restrict the DRP's consideration to any particular aspect or aspects of the draft order. Clause (b) of sub-section (2) of section 144-C does not restrict the nature of the objections that can be filed before the DRP. Similarly, clause (b) of subsection (6) of section 144-C does not restrict the DRP's consideration to any particular type of the objections. It merely refers to "objections filed by the assessee". Sub-section (6)(c) does not limit the DRPs consideration of the evidence to any particular aspect or issue. It refers in general to the "evidence furnished by....
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....ll issues, including the jurisdictional issue of no income arising and/or affected by the International Transaction. This the DRP can do by issuing final directions under section1 44C(5) to the Assessing Officer or before issuing final directions, by issuing directions under section 144C(7) to the assessing officer to make a further enquiry and report." 21. In view of the law laid down by the Hon'ble Bombay High Court we answer the second question in affirmative. Thus, it can be safely construed that the DRP has power to adjudicate jurisdictional issues and has also has power to set aside any proposed variations." 7. Before us, Revenue has not pointed out any fallacy in the findings of DRP or any distinguishing feature in the facts of assessee's case and that of assessee's sister concern. We therefore find no reason to interfere with the order of DRP and thus the grounds of Revenue are dismissed. Since the reopening is itself held to be invalid, we are of the view that the grounds raised by the assessee in its Cross-Objection are therefore rendered academic and requires no adjudication. 8. In any case the issue raised by the assessee in its Cross- Objection that whether IT supp....