TaxTMI 
TaxTMI 
2025 (10) TMI 1224
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....aw and on facts in confirming the action of Ld. ITO, Ward Int. Tax-2(1)(1) in treating the assessee company as "assessee in default" for non-deduction of TDS u/s 201(1)/201(1A) and that too without any basis, material and evidence available on record and by recording incorrect facts and findings. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. ITO, Ward Int. Tax-2(1)(1) in raising demand of Rs. 16,80,590/- u/s 201(1)/201(1A) on the alleged ground that the assessee has not deducted TDS on the amount of Rs. 1,07,28,734/-, more so when there is no requirement to deduct TDS as per law. 4. That in any case and in any view of the matter, action of Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. ITO, Ward Int. Tax-2(1)(1) in raising the demand of Rs. 16,80,590/- u/s 201(1)/201(1A), is bad in law and against the facts and circumstances of the case and the same is outside the purview of the said section. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. ITO. Ward....
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....n Form no. 15CAproceedings u/s 201(1)/201(1A) were issued time to time. The assessing officer has created demand along with interest of Rs. 16,80,590/- and passed order u/s 201(1)/201(14) of the Income Tax Act, 1961 vide order dated 15/02/2022.' 4. Aggrieved by the order dated 15/02/2022 passed u/s 201(1)/201(1A) of the Act, the Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 04/07/2023, dismissed the Appeal filed by the Assessee. As against the order of the Ld. CIT(A) dated 04/07/2023, Assessee preferred the present Appeal on the grounds mentioned above. 5. The Ld. Counsel for the Assessee submitted that the authorities below committed error in treating the Assessee Company as 'Assessee in default', ignoring the fact that the Assessee did not have any PE in India and the income of the Assessee was not liable to tax in India as per Article 7 of DTAA between India and Norway. Further submitted that the personnel of vendor company stayed in India for only 29 days which is less than three months as provided in Article 5 paragraph 3 of DTAA between India and Norway and even if the activities of the Assessee are considered to be installation con....
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....te that person of the vendor visited India and stayed in India for aggregate period of 29 days for replacement/installation of spare parts and the said Norway Company being a tax resident of Norway, has no PE India. For the said services of repairs, the Assessee made payment of above sums without deducting TDS. As the said Company has no PE in India and the activities undertaken by the vendor were in the nature of work contract, the said income was not taxable in India as per Article 7 of DTAA between India and Norway. Further, the personnel of Vendor Company stayed in India for only for 29 days, which is less than 'three months' as provided in Article 5 Paragraph 3 of DTAA. Even if the said activities are considered as installation contract, the said income was not taxable in India. The payments made by the Assessee were also not covered under 'Fees for technical Services' as defined in Section 9(1)(vii) or Article 12 of the DTAA as the work carried out by the vendor company falls under Article 7 leading to commercial profits. Considering the fact that the contract was primarily for sale of spare parts and replacement of defective parts which was incidental to the sale of spare pa....
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....s further supported by the fact that the components are sent for repairs along with airway bills and are redelivered in the same manner and the invoices are raised by Technik with reference to specific job-works and supply of parts, etc. The payments by the assessee are clearly business receipts in the hands of Technik." 8. Further the Co-ordinate Bench of the Tribunal of Hyderabad Bench in the case of Additional Director of Income Tax Vs BHEL-GEGas Turbine Servicing Pvt. Ltd in ITA No. 976/Hyd/2011 and other connected matters vide order dated 31/07/2012 it has been held as under:- "12. We heard both the sides. Actually, this is a case where the assessee obtained works orders from third parties such as ESSAR, and the items such as turbines are required to be repaired or refurbished and for this, these items are sent abroad to Saudi Arabia and Singapore for repairs and refurbishment by the non resident companies abroad. It is a fact that the assessee personnel do not accompany these items and therefore, there is no involvement of assessee's personnel in getting the items repaired or refurbished. As per the invoices raised by the said non-resident companies, the assessee ....
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.... rendering of the technical services and therefore, such consideration is not for FTS. For falling with the basket of FTS, there must be transfer of the technical knowledge or skill to the assessee or its personal. The case of decision of the Hyderabad Bench involves transfer of such knowledge to the accompanying personnel of the assessee and therefore, the said case is distinguishable on facts. 15. We have perused the said principles in the light of the detailed scope of work done in the case of the assessee, which as noted by the CIT(A) in the impugned appellate order for assessment year 2001- 02, from the order of the assessing officer in para 5.4 thereof the impugned order, which reads as under- "a) Receive and un-box fuel nozzle assemblies. b) Perform incoming conditional evaluation of fuel nozzle assembly. c) Removal of premix gas flexible manifolds. d) Perform incoming flow test of fuel nozzle assembly. e) Disassemble fuel nozzle assemblies using GE approved method f) Clean {chemical, ultrasonic, grit blast} bolts tubing, gas swozzles, oil/water, cartridges, end covers, and water manifold to remove dirt, rust for....
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....yderabad in the case of Mannesmann Demag L Kauchhammer V/s. CIT (supra) which involves deputing of technicians to India for supervision of repairs to be carried out at the plant and machinery purchased by the NMDC, we find that the said decision is distinguishable on facts. Such deputation, whether deputation or supervision, is absent in both instant cases as well as the case before it, as observed by the Delhi Bench of the Tribunal in the cited case. The relevant para of the order of the Tribunal in that case reads as follows- "We find that in Demag's case, the foreign company rendered 'technical consultancy' by way deputing a technician to India for supervising repairs to be carried out on the plant and machinery purchased by National Mineral Development Corporation. It is not the repair work per se which has been held to be technical services but it is the provision of the consultant technician deputed to India for supervising the repairs which has been treated as consultancy services. The foreign technician stayed on in India for 44 days to advise and supervise repair work which was obviously carried out by the engineers and workers of the Indian Company. T....