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TMI Blog2013 (11) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... appreciating the fact that the duration of the contract with British Gas was less than nine months. 3. Erred in calculating the total tax payable after adding amount of Rs. 7,21,97,190 towards refund already paid without appreciating the fact that no refund was paid to the appellant. 4. Erred in levying interest under section 234B without appreciating the fact that the appellant is a non-resident assessee and its entire revenues/receipts are subject to tax withholding in India under section 195 of the Act and the appellant is not liable to pay advance tax in respect of such revenues. 5. Erred in levying interest under section 234D without appreciating the fact that no refund was granted to the appellant." Briefly stated, the facts giving rise to this appeal are that the assessee filed its return which was selected for scrutiny and a draft assessment order dated December 30, 2010 was passed and issued to the assessee on total income of Rs. 1,45,23,18,561 to be taxed at 15 per cent. as per article 12 of India-Mauritius Double Taxation Avoidance Agreement, interest chargeable as per law, along with initiation of penalty proceedings. The assessee filed objections with learned Dispu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd held that the activities of the assessee-company did constitute permanent establishment in India. Regarding objections Nos. 3, 4 and 5, the Dispute Resolution Panel-II observed that as it has been already held that the assessee did have a permanent establishment in India, the income from fee for technical services in the case can be taxed only under article 7 relating to business income. The Assessing Officer following the directions of the Dispute Resolution Panel-II concluded the assessment with a final finding which reads as under : "On the basis of the above facts and the position this Panel is of the view that the income of the assessee is to be taxed not as royalty or fees for technical services but as income from business. As the assessee is engaged in the services of laying a pipeline in the offshore area for the extraction of oil and gas the services are 'in connection with the extraction/production of oil/gas' and therefore covered by section 44BB. In view of this, this Panel is inclined to agree with the 'without prejudice' plea made by the assessee that in case it is held that a permanent establishment exists, its income may be taxed under section 44BB. The Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above submissions, the authorised representative submitted a copy of the judgment dated September 16, 2011 of the Income-tax Appellate Tribunal, Delhi "C" Bench (GIL Mauritius Holdings Ltd. v. Asst. DIT reported as [2012] 17 ITR (Trib) 491 (Delhi)) passed in I. T. A. No. 5686/D/2010 for the assessment year 2007-08, i.e., preceding year under consideration in this appeal wherein the issue of permanent establishment was restored de novo to the file of the Assessing Officer for ascertainment of the period of the existence of the assessee in India. The relevant observations are being reproduced as under (page 504 of 17 ITR (Trib)) : "19. The only issue now left is regarding the inter-play of paragraphs (1) and (2). As mentioned earlier, the ship remained in territorial waters of India for such length of time in which the work of assembling the pipelines could be completed. The work also continued for sufficient length of time, but statedly not exceeding nine months. Therefore, if the ratio of the decision in the case of Fugro Engineers B. V. v. Asst. CIT [2009] 122 TTJ (Delhi) 655 only is taken into account, this will be a fixed place of business under paragraph (1). This is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y it, the period falls short only by about 20 days. The lower authorities have not examined this fact as they have not considered the provision contained in article 5(2)(i). Accordingly, it is argued that in case the main question is decided in favour of the assessee regarding application of article 5(2)(i), the exact period of continuation of activities will have to be ascertained. This has not been done by any of the lower authorities for the simple reason that they have not gone into this provision at all. On the other hand, learned counsel referred to the submissions made before the Assessing Officer on December 16, 2009, that the presence of the assessee in India was for a period of less than nine months. Having considered the rival submissions, we are of the view that since this submission has not been examined by any of the lower authority, it will have to be done now, as the question of permanent establishment crucially hinges on the period of existence of the assessee in India. Accordingly, this limited issue is restored to the file of the Assessing Officer to ascertain the period of the existence of the assessee in India and thereafter decide the existence of permanent es ..... X X X X Extracts X X X X X X X X Extracts X X X X
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