M/S.technip India Ltd.,Chennai-32 v. The Assistant Commissioner Ofincome Tax, Corporate Circle 3(2),Chennai-34

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 11.1.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAMandTHE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal Nos.155 to 157 of 2018 M/s.Technip India Ltd.,Chennai-32....Appellant Vs The Assistant Commissioner ofIncome Tax, Corporate Circle 3(2),Chennai-34 ...Respondent APPEALS under Section 260A of the Income Tax Act, 1961against the common order dated 22.7.2016 passed by the IncomeTax Appellate Tribunal, 'C' Bench, Chennai made inI.T.A.Nos.1330, 1331 and 1333/Mds/2015 respectively for theassessment years 2003-04, 2004-05 and 2005-06. AGAINST the order of the Commissioner of the Income Tax(Appeals)-11, Chennai – 34, in ITA No. 405/CIT – A-11/2013-14,ITA No. 404/CIT-A-11/2013-14, ITA No. 403/CIT-A-11/2013-14 dated12.02.2015 in PAN No. for the Assessment Year 2003-2004, 2004-2005, 2005-2006 respectively, against the AssessmentOrder of the Assistant Commissioner of Income Tax Company CircleIII (2), Chennai – 34, Joint Commissioner of Income Tax, CompanyRange – III, Chennai – 34, and Assistant Commissioner of IncomeTax, Company Circle – III (2), Chennai – 34 dated 29.12.2010,26.12.2006 and 24.12.2008. For Appellant: Mr.R.Vijayaraghavan forM/s.Subbaraya Aiyer PadmanabhanFor Respondent : Mrs.V.Pushpa, JSC COMMON JUDGMENT(Judgment was delivered by T.S.SIVAGNANAM,J) These appeals have been filed by the assessee under Section260A of the Income Tax Act, 1961 ('the Act' for brevity)challenging the common order dated 22.7.2016 made in https://hcservices.ecourts.gov.in/hcservices/ I.T.A.Nos.1330, 1331 and 1333/Mds/2015 on the file of the IncomeTax Appellate Tribunal, Chennai, 'C' Bench ('the Tribunal' forbrevity) respectively for the assessment years 2003-04, 2004-05and 2005-06. 2. The appeals were admitted on 17.4.2018 on the followingsubstantial questions of law: “1.Whether, on the facts and inthe circumstances of the case, the Tribunalwas right in law in holding thatreassessment proceedings had rightly beeninitiated as production of books at the timeof scrutiny would not amount to disclosureof all facts necessary for assessment ? 2. Whether, on the facts and in thecircumstances of the case, the Tribunal wasright in law in holding that reassessmentproceedings had rightly been initiated whenit was beyond a period of four years fromthe end of the relevant assessment year andno failure was ascribed to the assessee indisclosing fully and truly all materialfacts necessary for his assessment? 3. Whether, on the facts and in thecircumstances of the case, the Tribunal wasright in law in holding that payment forbandwidth connectivity charges to the Nonresident was not reimbursement of expensesand constituted income received in India forthe Non resident and hence, deduction underSection 195 of the Act is applicable ?4. Whether the Tribunal erred in relyingonthedecisionoftheHon'bleJurisdictional High Court in the case ofM/s.Verizon Communications Singapore PTE Ltdvs. ITO, 361 ITR 575, which was rendered inthe context of tax liability of non-residentand not on the withholding tax provisions ? 5. Whetheronthefactsandcircumstances of the case, the Tribunal wasright in law in confirming the disallowanceunder Section 40(a)(i) of the Act, on thebasis of retrospective amendments withoutappreciating that the Assessee at the timeof remittance could not have anticipatedsuch subsequent amendments and hence, theimpossibility of performance at the time ofmaking such payments ?6. Whether on the facts andcircumstances of the case, the Tribunal wasright in not considering the applicability of Article 26(4) of the India-France DTAAwhichprovidesfornon-discriminationbetween nonn residents and residents inallowance of expenditure in the nature ofinterest, royalties and other disbursement,which are deductible for the purpose ofdetermining the taxable profits? and 7. Whether, on the facts and in thecircumstances of the case, the Tribunal wasright in law in holding that tax is requiredto be deducted at source from the paymentfor fees for technical services when theservices were rendered by Appellant outsideIndia and consumed outside India ?” 3. We have heard Mr.R.Vijayaraghavan, learned counselappearing on behalf of the appellant/assessee and Mrs.V.Pushpa,learned Junior Standing Counsel appearing for the respondent/Revenue. 4. The learned counsel on behalf of the appellant/assesseesubmitsthattheassesseealreadyfiledthedeclaration/undertaking under the Vivad Se Vishwas Scheme on24.12.2020 and is awaiting orders to be passed in Form No.3. 5. In the light of the subsequent event, the CompetentAuthority shall process the applications/declarations inaccordance with the Direct Tax Vivad Se Vishwas Act, 2020 (Act 3of 2020) and pass appropriate orders as expeditiously aspossible. The assessee is given liberty to restore these appealsin the event the ultimate decision to be taken on thedeclarations filed by the assessee under Section 4 of the saidAct is not in favour of the assessee. If such a prayer is made,the Registry shall entertain the prayer without insisting uponany applications to be filed for condonation of delay inrestoration of the appeals and on such request made by theassessee by filing miscellaneous petitions for restoration, theRegistry shall place such petitions before the appropriateDivision Bench for orders. 6. The tax case appeals stand disposed of with theaforementioned liberty. Consequently, the substantial questionsof law framed are left open. No costs. Sub Assistant Registrar RS To 1.The Registrar, Income Tax Appellate Tribunal, 'C' Bench, Chennai. 2.The Assistant Commissioner of Income Tax, Corporate Circle 3(2), Chennai-34. 3. The Joint Commissioner of Income Tax, Company Range III (2), Chennai 34.4.The Commissioner of Income Tax (Appeals), II Chennai – 34.+1cc to Mr.Subbaraya Aiyar, Advocate, S.R.No. 1420 TCA.Nos.155 to 157 of 2018 PPA(CO)GN(08/02/2021)