2026 (3) TMI 223

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....Act pertaining to Assessment Year 2012-13. 2. Brief facts of the case are that assessee is a company registered under the laws of United Arab Emirates (UAE) and a tax resident of UAE, engaged in rendering seismic data acquisition and processing services to international offshore oil and gas industry. The assessee has received income in pursuance to the contract No.9010014830 dated 15.09.2011 with ONGC for acquiring 4C-3D seismic data using ocean bottom nodes technology. The return of income of the year under appeal was filed on 23.11.2012, declaring NIL income as assessee was not having PE under Article 5(2)(i) of India-United Arab Emirates Double Taxation Avoidance Agreement ("DTAA"). The assessee applied before Authority for Advance Ru....

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.... of the tax to be evaded. 4. Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 22.05.2024, has deleted the penalty and allowed the appeal of the assessee. 5. Aggrieved by the order of Ld. CIT(A), Revenue is in appeal before the Tribunal by taking following grounds of appeal:- 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting penalty u/s 271(1)(c) of the IT Act ignoring that the Hon'ble AAR held that there existed a PE in India and the assessee was liable to pay taxes in India, whereas in the return of income filed, the assessee had claimed its income as non-taxable stating that the period of stay in India did not constitute PE as pe....

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....nue from contract with ONGC and on such application of the assessee, the AAR has held that income received by the assessee from the contract with ONGC is liable to tax as per Indian Taxation laws and further directed to computed the same in accordance with the provisions of section 44BB of the Act. In terms of this order of AAR, ld. DRP has directed to compute the income of the assessee company @ 10% of the gross revenue as per section 44BB of the Act. 8. It is not the case where the receipts by the assessee was otherwise taxable in India since it has no PE in India income and the AAR has held the same as taxable in India since it is derived in India. Assessee has acted in bonafide and had approached the AAR for clarification. Ld. CIT(A)....

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....ssee or not. The income of the assessee is taxable in India as per the order of AAR. In the penalty proceedings the AO simply relied on the income computed in the assessment orders as per the directions of DRP who has followed the orders of AAR. 10. The Hon'ble Supreme Court in the case of CIT vs Reliance Petro Products (P) Ltd. (supra) has held that Section 271(1)(c) applies where the assessee "has concealed the particulars of his income or furnished inaccurate particulars of such income". As regards the furnishing of inaccurate particulars, it was found by the Hon'ble Supreme Court that no information given in the Return was found to be incorrect or inaccurate. It was held that the words "inaccurate particulars" mean that the detai....