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2023 (2) TMI 1240 - HC - Income TaxIncome taxable in India - FTS - whether the activities carried out by the respondent/assessee fall within the exclusionary part of Explanation 2 i.e., whether or not the activity was in the nature of mining or like project? - whether Section 44BB of the Act would be applicable to the assessee, who is a second line contractor - PE in India - According to AO since the payment received is qua FTS, it will fall under Section 9(1)(vii) of the Act and is also covered by the provisions of Article 13 of the India-France Double Taxation Avoidance Agreement (DTAA) - it is the respondent/assessee’s case that the activity in issue is connected with prospecting and extraction of mineral oil, and therefore, would fall under Section 44BB? - HELD THST:- There is no question of law proposed by the appellant/revenue, that this finding of fact is perverse. Therefore, in our view, we are not inclined to frame any question(s) of law, with regard to whether or not the income received by the respondent/assessee is in the nature of FTS. Whether the amount received by the respondent/assessee, in relation to which, concededly, tax has been paid on a presumptive rate under Section 44BB? - It is the appellant/revenue’s case, that since the respondent/assessee, concededly, was a second line contractor, Section 44BB of the Act would not apply to it. To be noted, there is no such distinction made in Section 44BB of the Act with regard to a main or a second line contractor. All that the recipient of income has to demonstrate, is that it is a non-resident who is engaged in the business of providing services or facilities in connection with or supplying plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of mineral oils.This is again, in our view, a finding of fact which cannot be disturbed, unless it is held to be perverse. Once again, no question of law has been proposed by the appellant/revenue, to the effect that the finding of fact is perverse. Whether Section 44BB of the Act would be applicable to the respondent/assessee, who is a second line contractor? - Although, prima facie, as noted above, there is no such distinction made between a main or a second line contractor, because a somewhat similar question has been admitted in Technip UK Limited [2018 (7) TMI 2335 - DELHI HIGH COURT] we are inclined to issue notice. We may note, that the question of law framed for consideration by a coordinate bench of this Court reads as follows : “Whether the Income Tax Appellate Tribunal was right in setting aside and quashing the order passed by the Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961 interpreting Section 44 BB of the afore-stated Act.” A bare perusal of the question of law would show, that it is linked to the exercise of power under Section 263 of the Act. Clearly no such position arises in the instant case. Tribunal, in the impugned judgment, while holding in favour of the respondent/assessee, has relied upon its order rendered in DCIT v. Technip UK Limited. [2018 (7) TMI 2335 - DELHI HIGH COURT] This order was passed in [2018 (12) TMI 1069 - ITAT DELHI]. Revenue, says that he will ascertain, as to whether any appeal was lodged with this Court qua the Tribunal’s order - Issue notice.
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