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2021 (2) TMI 993 - AAR - Income TaxMaintainability of Advance ruling application u/s 245R - amount received by the Applicant from DSP India for rendering business support services under Service Level Agreement and for providing information technology support services under IT Support Service Agreement - Revenue has submitted that the application may not be admitted for the reason that the questions raised in the application was already pending before the Income Tax Authority - whether the services rendered under 2013 agreement were pending before the Assessing Officer in the assessment proceeding for A. Y. 2016-17 - HELD THAT:- The issue can be said to be pending before the Income Tax Authority only when the return is selected for scrutiny to examine the change of stand by the assessee or where such change of opinion is examined by the Income Tax Authority and a considered view regarding such change of opinion is taken after such examination. When examined on these parameters, the matter can't be said to be pending before the Income Tax authority because the return for AY 2016-17 was not selected for scrutiny to examine any change of stand in the manner of offering of any particular income. We do not find that return for A. Y. 2016-17 was selected to examine any change of stand by the appellant. Therefore, we do not find any pendency in respect of the questions raised in the present application before the Income Tax Authority. Further, as the Applicant had already offered the amount for services rendered as Royalty/FTS in the return for AY 2016-17 there was no occasion for the AO to examine this change of stand. Therefore, we have no hesitation to hold that the change of opinion on the part of the Applicant in the present application did not render the issues pending in the AY 2016-17. The change of stand by the appellant is to be examined on the merits and this exercise can be undertaken in the course of merit hearing only. The Hon'ble Delhi High Court has held in the case of Hyosung Corporation [2016 (2) TMI 575 - DELHI HIGH COURT] that a notice under section 143(2) merely asking for certain information from assessee issued prior to filing of application before AAR will not constitute bar in terms of clause (i) to proviso to section 245R(2), on AAR entertaining and allowing the application - The same principle applies in respect of the notice issued u/s 142(1) of the Act. As already discussed earlier the specific question in respect of the nature of services rendered under the agreement or about the taxability of receipt of the services did not form part of any of the questionnaire or notices. Therefore, such notices issued prior to filing of the application cannot be a bar in terms of clause (i) to proviso to Section 245R(2) of the Act, for admitting the application. Department as well as the Applicant have relied upon a number of other judicial precedence, which are not found relevant considering the peculiar facts of the case as discussed above. The limited issue to decide the admission of this application is the issue of pendency and those decisions are not found relevant for this issue. Therefore, we do not deem it necessary to refer to those judicial pronouncements as referred by both the parties. Thus the issues involved in the questions raised in the application filed before us was not pending before the Income-tax Authority and the bar in terms of clause (i) of Proviso to Section 245R(2) is not found attracted. Therefore, the application is admitted under section 245R(2) of the Act.
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