TaxTMI 
TaxTMI 
2025 (1) TMI 1500
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....t deducted tax at source. According to the writ petitioner, it had at the time of furnishing its Return of Income [ROI] for the concerned Assessment Year [AY], namely, 2014-15 incorrectly proceeded on the assumption that since the aforesaid remittance was liable to be subjected to tax and no tax thereon had in fact been deducted, it would be liable to be disallowed by virtue of the provisions of Section 40 (a) (i) of the Act. Proceeding on that premise, the petitioner had thus suo moto disallowed the same and added the remittance back in its computation of income. 3. Subsequently, and on what the petitioner describes as that mistake coming to light, it was found that the remittance would in fact not be liable to tax at all in light of the provisions made in Article 12 of the India-Australia Double Taxation Avoidance Agreement [DTAA]. The contention appears to have been that since the payment made was in respect of services of a technical nature, namely, in the shape of reimbursement of expenses incurred in connection with the work discharged by seconded employees, it would clearly not satisfy the "make available" stipulation which appears in Article 12. Article 12 of the DTAA is....
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....ub-paragraph (c); (e) the use of, or the right to use: (i) motion picture films; (ii) films or video tapes for use in connection with television; or (iii) tapes for use in connection with radio broadcasting; (f) total or partial forbearance in respect of the use or supply of any property or right referred to in sub-paragraphs (a) to (e); (g) the rendering of any services (including those of technical or other personnel), which make available technical knowledge, experience, skill, know-how or processes or consist of the development and transfer of a technical plan or design; but that term does not include payments or credits relating to services mentioned in sub-paragraphs (d) and (g) that are made; (h) for services that are ancillary and subsidiary, and inextricably and essentially linked, to a sale of property; (i) for services that are ancillary and subsidiary to the rental of ships, aircraft, containers or other equipment used in connection with the operation of ships or aircraft in international traffic; (j) for teaching in or by an educational institution; (k) for services for the person....
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....4. The Principal Commissioner, however, has borne in consideration the undisputed fact that the petitioner had neither revised its RoI nor sought any certification of the remittance not being chargeable to tax as is contemplated under Section 195 of the Act. Suffice it to note that Section 195 envisages an inquiry being undertaken consequent to a remitter taking the position that the sum paid is not chargeable to tax under the Act. Viewed in that light and undisputedly, therefore, Section 195 stands on a pedestal distinct and distinguishable from the other provisions pertaining to deduction of tax at source as found in Chapter XVII of the Act. 5. Basis the aforesaid, the Principal Commissioner proceeded to record the following conclusions: "The contention of assessee has been duly considered. In my view, since payment on account of reimbursement was part and parcel in the nature of service which is technical in character or having been made available to the assessee company it would attract provisions of section 195 of Income Tax Act. The amount paid to its parent company embedded an element of income and therefore tax was required to be deducted at source. The as....
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....to apply his mind to the question whether the petitioner was taxable on that income. Since section 264 uses the expression "any order", it would imply that the section does not limit the power to correct errors committed by the subordinate authorities but could even be exercised where errors are committed by assessees. It would even cover situations where the assessee because of an error has not put forth a legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application under section 264. 36. An assessee is liable to tax only upon such receipt as can be included in his total income and is assessable under the Income-tax Act. There is nothing in section 264, which places any restriction on the Commissioner's revisional power to give relief to the assessee in a case where the assessee detracts mistakes because of which he was over-assessed after the assessment was completed. Once it is found that there was a mistake in making an assessment, the Commissioner had power to correct it under section 264 (1). When the substantive law confers a benefit on the assessee under a statute, it cannot be tak....
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....r the said section is a judicial one. In Aparna Ashram v. DIT (Exemptions) [2002] 258 ITR 401 (Delhi) ; 2002 SCC OnLine Del 1538, a Co-ordinate Bench of this court had observed that even if a power under section 264 is considered to be administrative, it obliged the concerned authority to act judicially. Further, the court held that the power conferred on the Commissioner is coupled with the duty to exercise the same "in the interest of doing real justice between the parties." 21. As observed above, it is clear that the amount of Rs. 1,51,67,868 cannot be taxed twice. In the aforesaid view, it was apposite for the Commissioner to have revised the assessment order for the assessment year 2014-15 in the light of the reassessment order dated December 8, 2017, whereby the amount of Rs. 1,51,67,868 was brought to tax in an earlier assessment year (assessment year 2012-13)." 10. As is manifest from the exposition of the legal position and the scope of the power which the Commissioner could have exercised under Section 264 in the two judgments noticed above, it was clearly not imperative for the petitioner to have amended its RoI. As was pertinently observed both in Vijay Gupt....