TaxTMI 
TaxTMI 
2021 (4) TMI 915
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....re that the assessee is a wholly owned subsidiary of The North American Coal Corporation (NACC), USA and it is engaged in the business of providing mine development services to Indian clients. The assessee paid royalty to its parent NACC, USA. The royalty amount was offered by the parent company to tax in India at the gross rate of 10%. The AO, while completing the assessment of the parent company, subjected the royalty and technical fees income to tax @ 40%. In order to prevent protracted litigation, the parent company as well as the assessee filed applications before the Income-tax Settlement Commission (ITSC) on 04-12-2014. The assessee's application covered three assessment years, viz., 2012-13, 2013-14 and 2014-15. The assessee had fi....
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....n denying such credit for TDS, has primarily held that section 240 of the Act is inapplicable to the assessee's case as no return of income for the year was filed u/s 139 of the Act before filing application before the ITSC. The whole controversy rotates around the interpretation of section 240 of the Act, the relevant part of which reads as under: "Where, as a result of any order passed in appeal or other proceeding under this Act, refund of any amount becomes due to the assessee, the Assessing Officer shall, except as otherwise provided in this Act, refund the amount to the assessee without his having to make any claim in that behalf." 4. On going through the mandate of the above extracted provision, it becomes unequivocal that where a....
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....tion before the ITSC, which was eventually determined by the Commission at Rs. 32.95 lakh. This prima facie shows that the Commission took cognizance of the declaration of income for the year in the application made by the assessee before it. Rather, the ITSC categorically observed in its order dated 24-05-2016 that the assessee did not file any return of income for the assessment year 2014-15 before filing the application. 6. Section 245C, dealing with application for settlement of cases, clearly provides through sub-section (1) that : "An assessee may, at any stage of a case relating to him, make an application in such form and in such manner as may be prescribed, .... to the Settlement Commission to have the case settled and any such ap....
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.... the order passed by the ITSC u/s. 245D(4) of the Act for the year under consideration assumes the character of an order passed in other proceeding under this Act, which stipulates the grant of suo motu refund by the AO. 7. The direction given by the ITSC has been interpreted by the AO as for granting adjustment only of the taxes paid by the assessee and not the TDS. The direction is reproduced hereunder: "Since the details of tax payments are available only with the AO, the AO shall compute the tax payable including surcharge and interest, if any, after giving credit for taxes already paid by the applicant and issue demand notice u/s.245D(6) of the Income-tax Act." 8. A careful perusal of the direction explicitly indicates that the AO ....