TaxTMI 
TaxTMI 
TaxTMI 
2023 (3) TMI 518
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....ts of the case is that the assessee Avaya International Sales Limited (Avaya Ireland' or 'the Assessee') is a company incorporated in Ireland and a tax resident of Ireland. The assessee is engaged in the business of developing, marketing, licensing and providing enterprise communication networks related hardware, software and services to the customers located in different geographies in the world, including India. During the year under consideration, the assessee has earned income from sale of hardware, software and rendering of standard automated services to Indian customers. The assessee filed the original return of income under section 139(4) of the Act for Assessment Year 2016-17 on March 30, 2018 reporting Nil income and claiming a refund of Rs. 6,02,56,590 (for tax deducted at source) in the return of income. The return of income was selected for scrutiny by the Assistant Commissioner of Income Tax, Circle 1(1)(1), International Taxation ('the Ld. AO') and a notice dated 30 August 2018 under section 143(2) of the Act was issued to the assessee. Further, a notice dated 9 October 2018 under 142(1) of the Act along with detailed questionnaire was issued to th....
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....ort/ maintenance services 1.1 That on the fact of the case and in law, the learned Commissioner of Income-tax (Appeals) [hereinafter referred to as "learned CIT(A)"] has erred in holding that the payments received by the Appellant towards support/ maintenance services are taxable in the hands of the Appellant in India. 1.2 That on the fact of the case and in law, the learned CIT(A) has failed to appreciate that payments received by the Appellant towards support/ maintenance services (being standard automated services) do not qualify as Fees for Technical Services ("FTS") neither under section 9(1)(vi) of the Income-tax Act, 1961 nor under Article 12 of India-Ireland Double Taxation Avoidance Agreement ("DTAA") and thus, is not chargeable to tax in the hands of the Appellant in India. 1.3 Without prejudice to the above and on the fact of the case and in law, the learned CIT(A) has erred in not adjudicating on the quantum of support/ maintenance services provided by the Appellant for the subject AY. 2. Ground 2: Initiation of penalty proceedings under section 271(1)(c), 271BA and 271F of the Act 2.1 That on the facts and circumstances of the case and in law, the learned CIT....
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.... income from rendering of standard automated services does not qualify as 'fees for technical services' as per India-Ireland DTAA. Ground No 6 On the facts and circumstances of the case, and in law, Ld. AO has erred in characterising the receipts to the tune of INR 30,04,84.790 as income from provision of services taxable as 'fees for technical services' at the rate of 10% as per Article 12 of the India-Ireland DTAA. It is prayed that the addition made by the Ld. AO be deleted. Ground No 7 On facts and circumstances of the case, and in law, Ld. AO erred in levying interest under section 234A of the Income-tax Act, 1961. It is prayed that the interest under section 234A of the Act be deleted. Ground No 8 On facts and circumstances of the case, and in law, Ld. AO erred in levying interest under section 234B of the Income-tax Act, 1961. It is prayed that the interest under section 234B of the Act be deleted. Ground No 9 On the facts and in the circumstances of the case and in law, the Ld. AO has erred in initiating penalty proceedings under section 271(1)(c) of the Act on the additions made in the final assessment order. Your Appellant prays that ....
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....fact or law to support the findings of the ld CIT(A) consequent to the judgment of the Hon'ble Supreme Court in Engineering Analysis Centre of Excellence Pvt Ltd (supra). 8.2 In the light of the aforesaid, Bench is of the considered opinion that the issue involved in this regard is now further covered in favour of the assessee by the decision of the Hon'ble Supreme Court. Thus, the grounds in appeal of the revenue have no substance. 9. In regard to appeal of the assessee ITA No. 526/Del/2020 the sum and substance of the argument on behalf of the assessee was that there is no dispute to the fact that the disputed standard automated services were in the nature of technical services and only submission was that these technical services were without human intervention. The ld AR submitted that the question of human intervention is a question of facts and need to be examined by the Tax Authorities below but the same was not examined. 10. In this context it is relevant to observe that the assessee had raised a ground in the alternative which the ld CIT(A) adjudicated in para 10.1 and 10.2 in his order as follows:- "10.1 The appellant had filed detailed written submission whi....
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....s during the period of agreement. 2.1.2 Remote Tier III/Tier IV technical support service Under this service Avaya will provide the following technical support services directly to Partner's end user's own support staff * Assistance in isolating and recommending corrective action to resolve an escalated problem and to dial into the partner's and user's Avaya Product e.g. communication manager, to attempt to resolve the problem remotely on the product. * Case management and tracking of all service escalations * 24x7 remote support for major severity situations * Business day remote support for all other situations * Tier 3 (backbone) technical product support for Avaya products * Dispatch of Avaya accredited technicians with/without spare parts to supported sites and carry out on site hardware replacement and any further diagnostics activity." 12. The ld DR relied on the judgment of Hon'ble Supreme Court in case of CIT Vs. M/s. Bharti Cellular 193 Taxman 97(SC) which is also been relied upon by the ld AR. The sum and substance of the judgment of the Hon'ble Supreme Court in M/s. Bharti Cellular (supra) is that question of human intervention n....
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....15, Mr. A.B. Dial, learned Senior counsel for DTL, drew the attention of this Court to the decision dated 8th May 2015 of the Division Bench of the Bombay High Court in CIT(TDS) v. Maharashtra State Electricity Distribution Co.Ltd. [2015] 375 ITR 23/232 Taxman 373/58 taxmann.com 339 (Bom.) which held that wheeling charges would not amount to payment of fees for technical services. Mr. Kamal Sawhney, learned Senior Standing counsel for the Revenue then sought time to examine the said decision and make submissions. Submissions on behalf of the Revenue 11. The submissions of Mr. Sawhney were heard by this Court on the 30th July, 2015. The principal submission of Mr. Sawhney was with reference to Section 194] of the Act and the Central Electricity Authority (Grid Standards) Regulations, 2010. The submissions of Mr. Sawhney was basically twofold. In the first place, he submitted that whether the fees paid in the context of rendering of services amounted to fees for technical service could be answered only by examining the very nature of service being performed, and in that context the working of the industry, in this case, the power generation and transmission industry. According to....