2023 (2) TMI 1205

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.... the receipts raised pursuant to the International Marketing Program Participation Agreement (IMPPA for short) are taxable in India and taxing IMPAA receipts in India as 'business income' on the basis that the assessee has permanent establishment in India as per the provision under Article 5 of the Double Taxation Avoidance Agreement (DTAA for short) between India and Netherland. The assessee has also raised additional ground stating that the draft assessment order dated 29.12.2016 passed by the Assessing Officer (A.O. for short) along with the notice of demand u/s. 156 of the Act is in violation of section 144C of the Act and the same is bad in law. 3. The brief facts are that the assessee company is incorporated in and a tax resident of ....

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....o the merit of the case as the said legal ground goes to be root of the present case. We hereby admit the additional ground raised by the assessee as it does not require verification of any fresh facts by relying on the decision of the Hon'ble Apex Court in the case of National Thermal Power Co. Ltd. vs. CIT [1998] 229 ITR 383 (SC). 6. The assessee has submitted that the assessee has not involved in the operation or management of Indian hotels which were done only by Indian entity the Marriott Group based on the operating agreement entered between Marriott Indian entity and the Indian hotel owners. The assessee only sub licenses Marriott trade mark and renders sales and marketing services to Indian hotel owners. The A.O. held that IMPP....

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....has a permanent establishment in India. 7. The assessee has challenged the said order before us and had also filed an additional ground for the reason that the draft assessment order dated 29.12.2016 along with the notice of demand u/s. 156 of the Act are deemed to be bad in law as the same violates section 144C of the Act. 8. The ld. AR for the assessee contended that the draft demand notice dated 29.12.2016 was sent along with the notice of demand u/s. 156 of the Act and notice u/s. 271(1)(c) dated 29.12.2016 and subsequently passed the assessment order dated 14.02.2017 u/s. 143(3) r.w.s. 144C(3) of the Act. The ld. AR further contended that the said draft assessment order was sent by the A.O. along with the demand notice and the penalt....

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....aking it null and void. For this proposition, we would like to place our reliance on some of the decisions cited by the assessee which are as follows: Sr. No. Case Law Citation 1  Vijay Television (P.) Ltd. vs. DRP [2014] 46 taxmann.com 100 (Madras) 2  Aker Powergas P. Ltd. vs. DCIT ITA No. 7211/Mum/2017 3 Perfetti Van Melle (India) Pvt. Ltd. vs. ACIT ITA No. 9116/Del/2019 4 DCIT vs. Atlas Copco (India) Limited ITA No. 649/Mum/2013 & 1726/Pun/2014 11. The assessee has relied on the decision of the Hon'ble Madras High Court in the case of Vijay Television (P.) Ltd. (supra), which has held that when there is an omission by the A.O. in following the mandatory procedure prescribed by the law, then the said omission can....