TaxTMI 
TaxTMI 
2024 (12) TMI 990
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.... dt. 17.9.2013 (Annx.2) and impugned order dt. 21.11.2014 (Annex.5); (v) Hold that the re-assessment proceedings in question are illegal, void and without jurisdiction; (vi) Quash the impugned order of sanction/approval dated 06.09.2013 granted by the Higher Authority (Annx.3)." 2) The case of the petitioner is that the petitioner is a Partnership Firm engaged in the business of trading and exports of marble. It is a regular income tax assessee. The petitioner filed ereturn for the Assessment Year 2009-10 on 28.09.2009 declaring total income of Rs.79,99,670/-. Such return was taken up for scrutiny under Section 143(2) of the Income Tax Act, 1961 and a notice was issued on 18.08.2010. After scrutiny of all the facts material, documents and books of accounts produced by the petitioner, assessment order dated 30.11.2011 was passed under Section 143(3) of the Income Tax Act for the Assessment Year 2009-10. In the said assessment proceedings, the Assessment Officer called upon the petitioner to furnish details of commission amount of Rs.58,04,455/- and the petitioner has produced all the material in proof of commission. The Assessment Officer after satisfying the information fur....
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....hority is without jurisdiction. According to him, the return filed by the petitioner for the Assessment Year 2009-10 was taken up for scrutiny and information sought by the Assessing Authority with regard to commission paid to non-resident for the services rendered outside India, were furnished to the Assessing Officer. The Assessing Officer after scrutiny of the material facts, documents and books of accounts submitted by the petitioner, had allowed the deduction of such amount. The present impugned notice initiating the re-assessment proceedings is a colourable exercise of power of review and change of opinion, which is impermissible and such proceedings are not result of any fresh material found subsequently. 9) It is also the submission of learned counsel for the petitioner that the obligation to deduct income tax at source in terms of Section 195 of the Income Tax Act would arise when the amount, which is paid to non-resident for services rendered outside India, are chargeable under the Income Tax. If such an obligation is casted on the person who is paying such commission, if deduction has not been made, then the consequences contemplated under Section 40(a)(i) of the Income....
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....the Income Tax Act. 11) In support of his arguments, learned counsel appearing for the Department has relied upon the judgments rendered by the Apex Court in the cases of (i) Income Tax Officer, Jodhpur Vs. Purushottam Das Bangur, reported in AIR 1997 Supreme Court 1372, (ii) Union of India (UOI) & ors. Vs. Coastal Container Transporters Association & Ors., reported in 2019(10) SCJ 179, (iii) State of Punjab Vs. Shiv Enterprises, reported in (2023) 2 Centax (S.C.), (iv) Commissioner of Income Tax, Gujarat Vs. Vijaybhai N.Chandrani, reported in 2013 AIR SCW 4675, (v) Commissioner of Income Tax Vs. Chhabil Dass Agarwal, reported in [2013] 261 CTR 113 (SC) and the judgments of this Court rendered in the cases of (i), Asstt. Commissioner of Income Tax, Circle Chittorgarh Vs. Banswara Syntex Ltd., [D.B.Civil Special Appeal (Writ) No.260/2004, decided on 22.09.2004, (ii) M/s Laxmi Cement Vs. Asstt. Commissioner, Commercial Taxes Department, [D.B.Civil Writ Petition No.3529/1999], decided on 21.03.2024, (iii) Makemytrip (India) Pvt. Ltd. Vs. State of Raj., reported in 2021(50) G.S.T.L. 167, (iv) Banswara Syntex Ltd. Vs. Union of India & Ors., reported in 2008(2) WLN 320 (Raj.). [2024:RJ-....
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....ny or to a foreign company, on which tax is deductible at source under Chapter XVII-B but not deducted or after deduction has not been paid, such amount shall not be deducted in computing the income chargeable under the head of Profit and Gains of business or profession. 15) Section 9(1)(i) Explanation (1)(a) reads as follows: "Income deemed to accrue or arise in India. 9. (1) The following incomes shall be deemed to accrue or arise in India:- (i) all income accruing or arising, whether directly or indirectly, through or from any business connection in India, or through or from any property in India, or through or from any asset or source of income in India, or through the transfer of a capital asset situate in India. [Explanation 1].-For the purposes of this clause- (a) in the case of a business, [other than the business having business connection in India on account of significant economic presence], of which all the operations are not carried out in India, the income of the business deemed under this clause to accrue or arise in India shall be only such part of the income as is reasonably attributable to the operations carried out in India; xxx xxx xxx" From ....
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....ough or from any business connection in India cannot be deemed to accrue or arise in India." 17) This means the commission if any paid for the services rendered by a person outside India is not chargeable under the Income Tax Act. Admittedly, in the present case as accepted by the regular Assessment Officer, the commissions paid by the petitioner were for the services rendered outside India. This factual position is also not denied by the Assessment Officer even in the present proceedings and in fact, show-cause notice was not issued on the ground that such commission was wrongly paid and such services were not outside India. Thus, the provision of Section 195 of the Income Tax Act would not apply and therefore, we are of the opinion that the present proceedings are without any jurisdiction. In the circumstances, the other judgments relied upon by the learned counsel for the parties are not required to be dealt with. 18) The contention of the learned counsel appearing of the respondent that the writ petition is not maintainable against the show-cause notice has no merit to stand. The reason is that there is no law that there is an absolute prohibition with regard to maintainabil....