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TMI Blog2015 (3) TMI 349X X X X Extracts X X X X X X X X Extracts X X X X ..... not against the NRC itself and that the time limit for the issue of notice was not to be reckoned as per the provisions of section 149(3) of the Act. 3. Whether on the facts and circumstances of the case, the Ld CIT(A) has erred in not giving the finding on merits that the income of the assessee was in the nature of technical services being rendered and taxable as per the provisions of section 115A r.w.s. 9(1)(vii) of the Act." 3. Briefly stated the facts giving rise to this appeal are that the return of income u/s 139 was filed on 19.10.2005 at an income of Rs. 15798145/- and the same was revised on 28.11.2006 claiming the entire revenue as exempt in view of Article 7 of DTAA between India and UK and filed at nil income. Subsequently, notice u/s 148 of the Act was issued on 31.3.2010, after recording reasons in the case and taking due approval u/s 151 of the Act of the DIT-II (International Taxation), New Delhi which was granted vide letter dated 30.3.2010 requiring the assessee to file its return of income for AY 2005-06. In response to the notice, the authorised representative of the assessee vide its letter dated 20.4.2010 submitted that the revised return filed on 28.11.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of sections 44BB, 44DA and 115A is that if the income of the Non-resident is in the nature of fee of technical services it shall be taxable under provision of either 44DA or section 115A irrespective of the business of which it relates. Section 44BB applies only in a case where consideration is for services and another facilities relating to exploration activity which are not in the nature of technical service." Further, the notice dated 31.03.2010 u/s 148 of the I.T. Act has been issued in the name of the assessee M/s Foster Wheeler Energy Ltd and not in the name of the representative assessee M/s ONGC Ltd. and therefore it is not barred by limitation of time under section 149(3) I.T. Act, 1961 as submitted by the assessee. The objection of the assessee has no legal merit and is hereby rejected." 5. Being aggrieved by the above rejection order, the assessee preferred an appeal before the CIT(A) which was allowed by passing the impugned order with following observations and conclusions:- "4. After a perusal of the facts as narrated above (which are borne out of the AO's order and related documents filed during appellate proceedings), this issue may be analysed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the statutory limit and that the provisions of section 149(3) of the Act were applicable for determining the time limit for the issue of notice. Ld. DR further contended that the CIT(A) has grossly erred in holding that the notice u/s 148 of the Act was issued against the ONGC as the representative assessee of the non-resident company namely M/s Foster Wheeler Energy Ltd. UK and not against the Non-Resident Company (NRC) itself. 7. Ld. DR vehemently contended that the CIT(A) misunderstood the provisions of limitation for issuance of notice u/s 148 of the Act as envisaged u/s 149 of the Act and the conclusion of the CIT(A) is contrary to the letter and spirit of the provisions of section 149(3) of the Act that the time limit for issuance of notice u/s 148 of the Act in the extant case was to be reckoned as per provisions of section 149(3) of the Act. Placing reliance on the decision of ITAT Mumbai Special Bench "L" in ITA No.2965/M/06 for AY 1998-99 to 2002-03 in the case of J.M. Baxi & Co. vs DDIT dated 5.3.2009, ld. AR strenuously contended that the legal issue in the present appeal is squarely covered in favour of the revenue by the said decision of Special Bench and since the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing observations, findings and conclusion:- "27. Having regard to above terms, it cannot be disputed that assessee is agent of the non-resident. The assessee never disputed its liability to be assessed as agent of the non-resident. Not only income tax returns were signed and filed as agent for and on behalf of the non-resident, but several other documents were furnished with the income tax authorities including an undertaking that taxes due from the non-resident would be paid by the assessee agent. Having regard to above clear and undisputed facts, it was not necessary for authorities in this case to provide any opportunity of being heard to the assessee as regards his liability to be treated as an agent under the Act. In fact, it would have looked absurd to provide such an opportunity of being heard to a person who has accepted and never disputed his liability to be assessed as an agent. Therefore, there was no occasion to pass any order u/s 163(2) of the I.T. Act. In other words, there was no question of "treating the assessee as an agent of the non-resident" and, therefore, provision of Section 149(3) had no application in this case. As noted earlier with reference to provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee never disputed its liability to be assessed as agent/representative assessee of the non-resident company viz. M/s Foster Wheeler Energy Ltd. UK. Not only income tax returns were signed and filed as agent for and on behalf of the nonresident, but several other documents were furnished with the income tax authorities including an undertaking that taxes due from the non-resident would be paid by the assessee agent. The Special Bench having regard to above clear and undisputed facts further held that in this situation, it was not necessary for authorities in this case to provide any opportunity of being heard to the assessee as regards his liability to be treated as an agent under the Act. The Special Bench further held that it would have looked absurd to provide such an opportunity of being heard to a person who has accepted and never disputed his liability to be assessed as an agent of Non-resident company. Therefore, there was no occasion to pass any order u/s 163(2) of the I.T. Act and thus, there was no question of "treating the assessee as an agent of the non-resident" and, therefore, provision of Section 149(3) had no application in this case. 12. In the present case, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otices were furnished with the income tax authorities and this liability was fastened on ONGC as per clause 11 of the agreement dated 7.7.2004 between ONGC and non-resident company M/s Foster Wheeler Energy Ltd. 14. In view of aforesaid conclusion and undisputed fact of the extant case, it was not necessary for the revenue authorities to provide any opportunity of being heard to the assessee ONGC as regards his liability to be treated as an agent under the Act. Practically, it would have been futile and absurd exercise to provide such an opportunity of being heard to a person who has accepted and never disputed the liability to be assessed as an agent and therefore, there was no necessity to pass any order u/s 163(2) of the Act. 15. The facts of the present case are analogous to the facts of the case of J.M. Baxi (supra) wherein it was held by the Special Bench of ITAT Mumbai that with reference to the provision of section 163(2) of the Act, the same are for the benefit of the agent relating to his liabilities under the Act and the benefit of provision viz. opportunity of being heard can be waived by the agent/representative assessee. We also respectfully take note of the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. Ld. DR replied that by submitting original and revised return, the ONGC only discharged its obligation incumbent upon it under clause 11 of the agreement between assessee ONGC and non-resident M/s Foster Wheeler Energy Ltd. UK and if assessee chooses to submit returns suo moto u/s 139(1) of the Act to discharge its liability as well as to enjoy tax benefit available for the non-resident company as a result of credits claimed of withholding taxes, then it should not escape itself from reassessment proceedings u/s 147/148 of the Act. 18. In view of above legal position, we reach to a logical conclusion that as per conduct of the assessee and decision of the Special Bench Mumbai ITAT in the case of J.M. Baxi (supra) the provisions of section 149(3) of the Act and limit prescribed therein for issuance of notice u/s 148 of the Act is not applicable to the present case. Finally, we reach to a conclusion that the CIT(A) was not justified in holding that since the assessment has been framed on M/s ONGC by treating it as a representative assessee of non-resident M/s Foster Wheeler Energy Ltd., therefore the limitation for issuance of notice u/s 148 of the Act beyond two years to the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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