Ita/215/2014 Of The Director Of Income Tax v. M/S Abbey Business Services India Pvt Ltd

IN THE HIGH COURT OF KARNATAKA AT BENGALURUDATED THIS THE 1 DAY OF DECEMBER 27070PRESENT| THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE H.T.NARENDRA PRASAD BETWEEN: ILT.A. NO.215 OF 2014 1.|THE DIRECTOR OF INCOME-TAX. INTERNATIONAL TAXATION. RASHTROTHANA BHAVAN NRUPATHUNGA ROAD BANGALORE. 2.|THE DY. DIRECTOR OF INCOME-TAX. (INTERNATIONAL TAXATION)|CIRCLE -1 (1)RASHTROTHANA BHAVANNRUPATHUNGA ROADCIRCLE -1 (1)RASHTROTHANA BHAVANNRUPATHUNGA ROAD BANGALORE. (BY SRI.K.V.ARAVIND, ADV.,) .., APPELLANTS. AND" M/S ABBEY BUSINESS SERVICES INDIA PVT. LTD.THE RESIDENCY, 7TH FLOOR.133/1, RESIDENCY ROAD.BANGALORE - 560 O25. .., RESPONDENT (BY SRIL.HIMANSHU SHEKHAR SINHA ADV. FORSRI.R.V.GOUTHAM ADV.SRI.BHUWAR DOOPAR ADV.|SRI.YASH VERMANI ADV. ) THIS ITA IS FILED UNDER SECTION 260-A OF I.T. ACT,1961L ARISING OUT OF ORDER DATED 20.12.20L3 PASSED IN ITANO.1030/BANG/2013 FOR THE ASSESSMENT YEAR 2005-06,PRAYING TQ: (1) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW.STATED ABOVE.(11) ALLOW THE APPEAL AND SET ASIDE THE ORDER DATED.31.05.7011.PASSEDBY|THE.ITAT,BANGALOREIN|ITANO.1030/BANG/2013AND|CONFIRM|THEORDEROF.THE|APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY.THE DEPUTY DIRECTOR OF INCOME TAX, CIRCLE - 1(1),.BANGALORE. THIS ITA COMING ON FOR FINAL HEARING, THIS DAY,|ALOK ARADHE J.,DELIVERED THE FOLLOWING: | JUDGMENT This appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act for short)has been preferred by the revenue. The subject matter| of the appeal pertains to the Assessment year 2005-06.The appeal was admitted by a bench of this Court vide order dated 12.01.2016 on the following substantialquestions of law:| (1)WhetherIn|thefactsandcircumstances of the case, the tribunal Is justified in law in holding that the assesseecannot be held as ‘assessee in default’ under|Section 201(1) of I.T.Act even when the. proceedings initiated by revenue under said|provision is in accordance with parameters ofsaid section?| (il)WhetherIn|thefactsandcircumstances of the case, the tribunal Is justified in law in holding that the assesseecannot be held as ‘assessee in default’ under|Section 201(1A) of I.T.Act even when the.proceedings initiated by revenue under said|provision is in accordance with parameters ofSaid section?| (111)WhetherOf)thefactsandcircumstances of the case, the tribunal Is rightin holding that the payments made by|assessee to Abbey National Pic, UK are not.liable for deduction of [DS under Section 195|of the I.T. Act and as such invoking of Section 40(a)(i) by assessing authority is not proper|even when the nature of transactions andmaterials available on record established that|paymentsmadeby aSSCSSCECCO Abbey|National Pic, UK, can be categorized as feesfor tecnnical services’ under Section 9(1)(vii) of the Act and as such liable for Geduction of| TDS under Section 195 of the Act?| (iv)Whether.Of)thefacts|andcircumstances of the case, the tribunal Is rightin law in holding that the assessee cannot beheld as ‘assessee [in defau/t under Section201(1) of the Act’ even when the assessing|authority after considering the particulars|furnished by assessee, passed order under|Section 201(1) of the I.T. Act holding that|services rendered by Abbey UK to Abbey,|India are in the neture of Technical Services|as per Section 9(1)(vil) Explanation 2 Article13(4)(c) of the India - UK Double Taxation|Agreement (for short DTAA)? 2.|For the reasons assigned by us in tnejudgment passed today in _ I.T.A.No.214/2014, thsubstantial questions of law framed by a bench of this.court are answered against the revenue and in favour of the assessee. ���������������"���������!���������������������������������������!������������������������������ ����������� ��� �����������