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TMI Blog2010 (2) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... nch of this Tribunal concluded hearing in this matter, and, adjudicating upon the grievance of the assessee against the reopening of the assessment, referred the following question for the consideration of a Special Bench:- "Whether on the facts and in the circumstances of the case, the time-limit provided under s. 149(3) would apply to the assessee who has voluntarily filed the return of the principal non-resident and in whose case no order under s. 163 has been passed treating him as the agent of non-resident?" 4. The aforesaid issue was then considered by a three Member Bench of the Tribunal, and vide order dt. 5th March, 2009 [reported as J.M. Baxi and Co. as agent of Thoresen Chartering Singapore Pte. Ltd. vs. by. Director of IT (2009) 121 TTJ (Mumbai) (SB) 721 : (2009) 20 DTR (Mumbai)(SB) 420- Ed.], this Special Bench decided this question "in favour of the Revenue and against the assessee". The main contention of the assessee, as noted in the said order was, that "no notice under s. 148 of the Act could be issued to the assessee as 'agent' of the non resident" but this contention did not find any favour with the Special Bench. Accordingly, the Special Bench r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed relief under s. 90/91 which means the income of TCSPL is not taxable in India as per art. 8 of the DTAA between India and Singapore. While going through the records of TCSPL, it is found from the financial statements that for the year ended 30th Sept., 2001, the TCSPL is showing revenues by way of commission income and not by way of operation of ship. This shows that TCSPL is not the freight beneficiary but is only a commission agent. It is also seen from the above financial statement that the 'daily operations' of the company are outsourced to an associated concern for a lump sum management fees. It further confirms the fact that the TCSPL is acting as an agent only in the business of ship operations, and is not in actual business of operations of ship. Article 8 of the DTAA between India and Singapore states that:- '8(1) Profits derived by an enterprise of a Contracting State from the operation of ships or aircraft in international traffic shall be taxable only in that State. ........... 8(4) For the purposes of this article, profits from the operation of ships or aircraft in international traffic shall mean profits derived from the transpo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... recorded for reopening the assessment, which have been extracted earlier in this order, are qua J.M. Baxi and Co. only and would not suffice for reopening the assessment of the foreign principal. Without expressing our opinion on the stand so taken, as we are not required to do so, we reproduce the relevant observations of the Co-ordinate Bench as follows:- "6. The learned counsel for the assessee contended that similar proceedings had been initiated and completed in the case of J.M. Baxi and Co., and also the same income has been assessed in both hands i.e., the principal and representative assessee. The learned Authorised Representative raised objection to the initiation of proceedings on the ground that the reasons were recorded for one assessee and not both. As such, it was pleaded that the proceedings under s. 147 were illegal insofar as the assessee in whose name the reasons are not recorded. Learned Departmental Representative was directed to place on record the copies of reasons recorded in the case of TCSPL and J.M. Baxi and Co. The learned Departmental Representative produced before us copy of reasons along with the proposal submitted by the Dy. Director of IT on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atisfy himself that the income has escaped assessment. When it was pointed out to the learned counsel that all the decisions cited by him relate to the situation as on at the point of recording the reasons of reopening and not at there is no support for the proposition that such a situation must also prevail at the point of time of service of notice, learned counsel merely submitted that the impliedly reference in some judicial precedents is to the service of notice. We do not share learned counsel's perception. A decision is an authority for what it actually decides, and not even for what may logically follow from the same. In all the cases cited by the learned counsel, what is held that while recording the reasons of reopening the assessment, the AO must actually be satisfied that income has escaped assessment and an income, in respect of which assessment proceedings are in progress, cannot be said to have escaped the assessment. We have no quarrel with this proposition, but we are not inclined to stretch it in the manner in which learned counsel seeks to stretch it further. In case the reasons recorded for reopening the assessment are no longer valid at the time of actual assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arned counsel responds that none can capitalize out of his own wrong, and the fact that the AO did not record the reasons of reopening the assessment in the case of the foreign principal cannot be put to AO's advantage. It is submitted that the well-settled legal position is that no man take advantage of his own wrong i.e., nullus commodum capere potest de injuria sua propria. We are unable to see any merits in this plea either. It is not a question of who benefits and who does not benefit. The short issue is whether income could be said to have escaped assessment or not, and that is what the AO was required to decide in a fair and objective manner. 13. It is also important to bear in mind that in the case of the representative assessee, the assessment of income of the foreign principal in the hands of the representative assessee is without any prejudice to assessment on, and recovery from, the foreign principal directly. While s. 161 deals with liability of representative assessee, which, inter alia, includes liability to "assessment in his own name in respect of that income (in respect of which he is representative assessee)", s. 166 specifically provides that "nothing in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said plea, then another plea on the same issue is taken up, that too without even taking up a specific ground of appeal and without there being any evidence, save and except for, what learned counsel terms as 'statement at Bar', that this aspect of the grievance was argued before the original Division Bench. It is somewhat contrary to common sense to proceed on the basis that in case this aspect of the matter was argued before the original Division Bench and in case the Division Bench had seen any merits in this plea, they would have referred, what the issue referred to the Special Bench would have been in such an eventuality, a purely academic question, but then we have no reasons to doubt the statement made by the learned counsel either. Be that as it may, now that we have adjudicated on the plea of the assessee on merits, we leave it at that. 15. Grievances of the assessee against the validity of reassessment proceedings are thus rejected. 16. On merits, grievances of the assessee are as follows:- "Without prejudice to the ground Nos. 1 to 3, on the facts and in the circumstances of the case, the learned CIT(A) has erred in not adjudicating the following ..... X X X X Extracts X X X X X X X X Extracts X X X X
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