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TMI Blog1993 (2) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... al could be preferred and inasmuch as no appeal has been specified against an order under section 172(4) it could not be entertained. He also held that the indication shown in the Demand Notice issued by the Assessing Officer in para 8 of the demand notice was misconstrued, because the Assessing Officer is not empowered to authorise filing of an appeal when the statute itself did not envisage an appeal.Thus for the short reason that no appeal is provided under section 246, he dismissed the appeal filed by the assessee as incompetent. 2. The assessee has taken several grounds to urge that the CIT (Appeals) erred in his decision and he ignored article 9 of the agreement between India and Singapore for avoidance of double taxation which provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be income accruing in India to the owner or charterer on account of such carriage. Sub-section (4) provides for assessment of income on the basis of return filed under sub-section (2) and the ITO shall assess such income and determine the sum payable as tax thereon at the rate or rates in force applicable to the total income of a company which has not made the arrangements referred to in section 194 and such sum shall be payable by the master of the ship. Sub-section (7) also provides for an option to the assessee concerned for regular assessment to be made under section 143 subject to certain conditions specified therein. However, this option to get a regular assessment completed instead of ad hoc assessment contemplated by section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling with computation of regular business income, provisions of section 172(4) has virtually become otiose, though it is retained in the statute book for making ad hoc assessment under exceptional circumstances. In this view of the matter, therefore, the order passed by the ITO under section 172(4) may not be treated as an order under section 44B of the Income-tax Act, 1961 and thus appealable under section 246(a) of the Income-tax Act, 1961. 6. Besides the aforesaid view which is also, prima facie, a reasonable view that could be taken, there is also a fundamental issue that is required to be resolved. The fundamental issue is whether in case of application of Double Taxation Avoidance Agreement what is the quantum of tax leviable or what ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 vis-a-vis the provisions of Double Taxation Avoidance Agreement. For the sake of facility, the said circular is extracted hereunder : " It has come to the notice of the Board that sometimes effect to the provisions of double taxation avoidance agreement is not given by the Assessing Officers when they find that the provisions of the agreement are not in conformity with the provisions of the Income-tax Act, 1961. 2. The correct legal position is that where a specific provision is made in the double taxation avoidance agreement, that provision will prevail over the general provisions contained in the Income-tax Act, 1961. In fact the Double Taxation Avoidance Agreements which have been entered into by the Central Government under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt or emergency assessment contemplated by section 172(4) of the Income-tax Act, 1961. The remedy is open to the assessee under section 237 of the Income-tax Act, 1961 with reference to Article 9 of the Double Taxation Avoidance Agreement under consideration. Circular No. 333 cited above empowers the assessee to seek necessary relief before the ITO because the Agreement for Avoidance of Double Taxation with Singapore was an extraordinary provision governing both the Governments and as per the directions of the Government, all the provisions of the said Agreement shall be given effect to in the Union of India which is binding on the ITO. Therefore, it is open to the assessee to seek refund before the ITO under section 237 if entire tax asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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