2023 (12) TMI 934 - HC - Income Tax

Income taxable in India - 15 percent of the revenue generated from the bookings made within India were attributable to the Permanent Establishment (PE) - HELD THAT - The coordinate bench, in AY 2006-07 2022 (9) TMI 311 - DELHI HIGH COURT , had sustained the said conclusion and had gone on to hold that no substantial question of law arose for its consideration. It is this decision that was affirmed by the Supreme Court, with the dismissal of the SLP as noted hereinabove. Tribunal via the impugned order, did not rule on the merits of the case for AYs 2007-08 to 2010-11. Revenue, in the instant appeals, has not proposed a question on merits, perhaps, having regard to the aforementioned judgment of the Supreme Court as well as the decision of the Tribunal on the narrow issue of limitation. Tribunal, in the instant case, had dismissed the appeal of the appellant/revenue on the ground of limitation for the AYs in issue, i.e., AYs 2008-09 and 2010-11.The reason given by the Tribunal for dismissal, on merits, was that the final assessment order was barred by limitation, as per Section 153 of the Income-tax Act Appellant s/revenue s plea that the provisions of Section 144C of the Act would come into play was repelled by the Tribunal for the reason that framing a draft assessment order was not required for the periods in issue, and therefore, the non-obstante clause under Section 144C of the Act would not override Section 153 of the Act. Since on merits the matter stands closed, in our view, these appeals need not be entertained vis- -vis the questions proposed by the appellant/revenue as they have, in a sense, been rendered academic.

Summary

Issues involved: Application for condonation of delay in re-filing the appeal; Merits of the case concerning Assessment Years 2008-09 and 2010-11.

Application for Condonation of Delay:
The appellant/revenue filed applications seeking condonation of a 430-day delay in re-filing the appeal. The delay was acknowledged, and despite that, the court decided to allow the applications subject to exceptions. The delay was ultimately condoned, and the applications were disposed of.

Merits of the Case - Assessment Years 2008-09 and 2010-11:
The appeals pertained to Assessment Year (AY) 2010-11 and AY 2008-09. The appellant/revenue aimed to challenge the order issued by the Income Tax Appellate Tribunal dated 09.11.2020. The appellant's counsel conceded that a Supreme Court decision regarding AY 2006-07 favored the respondent/assessee, and this decision was considered binding. The specific issue in question was the attribution of 15 percent of revenue generated from bookings within India to the Permanent Establishment (PE) of the respondent/assessee.

The Tribunal did not address the merits of the case for AYs 2007-08 to 2010-11. The appellant/revenue did not raise questions on merits, likely due to the Supreme Court's judgment and the Tribunal's ruling on the limitation issue. The Tribunal dismissed the appeal on the grounds of limitation for AYs 2008-09 and 2010-11, citing Section 153 of the Income-tax Act. The Tribunal also rejected the appellant's argument invoking Section 144C of the Act, stating that it did not apply as draft assessment orders were not necessary for the relevant periods.

Given that the matter was considered closed on merits, the court decided that the appeals did not need to be entertained as the questions proposed by the appellant/revenue had become academic. Consequently, the appeals were closed, and the order was directed to be sent to the respondent/assessee through various modes, including email.