TMI Blog2011 (8) TMI 226X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of the same payment being admitted to ruling. The question raised in this application is already pending before an Appellate Authority, though not at the instance of the applicant before us, but at the instance of a person who is immediately concerned with this payment, the other party to the contract under which the amount is paid to the applicant before us and what is involved is the nature of the payment in terms of the Income-tax Act. - Application rejected. - A.A.R. NO.976 OF 2009 - - - Dated:- 3-8-2011 - JUSTICE P.K. BALASUBRAMANYAN, V.K. SHRIDHAR, JJ. Present for the applicant Mr. G.C. Srivastava, Counsel, Mr. Arijit Chakravarty, Sr. Manager, Advocate, Mr. Manoneet Dalal, Advocate, Mr. Atulan Saha, CA, Mr. Nikhil Tailwal, CA, Mr. Shailesh Kumar, CA, Mr. Akhil Sambhar, CA Present for the Department Mr. Narender Kumar ORDER 1. The applicant is a company incorporated in Australia and is a tax resident of that country. The applicant entered into a contract with Ravva Oil Singapore (Singapore) Pte. Ltd., a company incorporated under the laws of Singapore for provision of services in connection with the business of oil and gas exploration and producti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant and the representative of the Revenue were heard in detail. 6. The proviso to section 245R(2) of the Act insofar as it is relevant for our present purpose reads: "Provided that the Authority shall not allow the application where the question raised in the application, (i) is already pending before any Income-tax Authority or Appellate Tribunal [except in the case of a resident applicant falling in sub-clause (iii) of clause (b) of section 245N] or in any Court." 7. The history of the legislation shows that earlier, the bar to entertain the application for advance ruling under the concerned proviso was when the question raised in the application was already pending in the applicant's case before any Income-tax Authority, the Appellate Tribunal or any Court. This proviso was amended in the present form by the Finance Act, 2000 with effect from 1-6-2000. The omission of the words "in the applicant's case" put the emphasis of the bar on the question raised in the application being pending before any Income-tax Authority or Appellate Tribunal or Court, not necessarily at the instance of the applicant. The question, therefore, is whether it can be said that the qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plication is pending before the Appellate Authority under the Act. 10. Learned counsel for the applicant argued that the order of assessment disallowing the expenditure of Ravva Oil Singapore was passed only in terms of section 40(a)(i) of the Act and that meant that it was only on a failure to comply with section 195 of the Act. He submitted that this Authority has consistently taken the view that passing of an order under section 195 of the Act does not stand in the way of the entertaining of an application for advance ruling. He submitted that since the order of assessment only visited Ravva Oil Singapore with the consequence of non-deduction under section 195 of the Act and by applying section 40(a)(i) of the Act, the bar to entertain the application at the instance of the applicant did not arise. The representative of the Revenue on the other hand submitted that the issue raised herein was the subject-matter of the appeal before the Appellate Authority and the bar under the proviso was attracted. 11. Two earlier decisions of this Authority were brought to our notice. In the first of them, in Airport Authority of India [AAR Nos. 753-754 of 2007], this Authority held that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the uncertainty visiting the applicant therein, on account of the decision taken by the Assessing Officer quite contrary to the ruling in the case of the applicant which had become final. The applicant therein had approached this authority at the earliest opportunity. 13. From these earlier decisions what emerges is that it is a matter of discretion as to whether an application for advance ruling is to be entertained in terms of section 245R(2) of the Act when there is pendency of a proceeding before the regular authorities under the Act. We are not quite sure that it is only a matter of discretion insofar as the specific bar created by one or more of the clauses to the proviso to section 245R(2) of the Act. It is debatable how far discretion can be exercised to admit an application for a ruling, when one of the conditions of the proviso is clearly attracted. The bar created by the proviso to section 245R(2) of the Act is a bar to the jurisdiction of this Authority to give a ruling on matters covered by the proviso. It could even be said that it touches on the jurisdiction or the competence of this Tribunal to give an advance ruling. The discretion referred to in Microsoft Operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier referred to, tax withholding issue can only be determined by recording a finding on the liability to pay income-tax in India in respect of the income derived. If the payer had not raised that question directly, we can only say that he might and ought to have raised that question while asserting his claim in respect of the amount paid to the payee. What the payee seeks from this Tribunal is also a ruling on the question whether the amount received by it from the payer is taxable in this country. This according to us means that the question raised in this application is already pending before an Appellate Authority, though not at the instance of the applicant before us, but at the instance of a person who is immediately concerned with this payment, the other party to the contract under which the amount is paid to the applicant before us and what is involved is the nature of the payment in terms of the Income-tax Act. We are, therefore, satisfied that clause (i) of the proviso to section 245R(2) of the Act is attracted to the case on hand and it would be appropriate for us to decline jurisdiction to entertain this application, of course, without prejudice to the rights, if an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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