TMI Blog2012 (5) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006, it was held that the fee for licensing the software to the Indian customers was taxable as royalty/ fee for technical services under Article 13 of DTAA and Section 9(i)(vi) and (vii) of the Act. The income was subjected to tax @ 10%. Article 7 and Section 44D was not invoked. No new fact had come to the knowledge of the Assessing Officer after completion of the original reassessment proceedings. It is not shown or alleged that new facts which were concealed had come the notice of the Assessing Officer. The Assessing Officer, on reconsideration of the same material facts, has drawn a legal inference/ conclusion on the basis of his interpretation of the Act and DTAA. This cannot be a valid ground to initiate re- assessment proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upplied telecommunication hardware and software to various customers in India. The assessee had filed return of income claiming that the assessee does not have a permanent establishment in India. In the assessment order passed on 30.03.2006 it is held that the assessee had a PE in India and the profits are attributable to the PE in India and the software income earned by the assessee was taxed as royalty income under the provisions of the Act and the tax treaty. It is perused from the record of the case that while deciding the tax rate the date of execution of the agreement with Indian customers was not taken into account which resulted into an underassessment of the income of the assessee for the A.Y. 2003.04. This also satisfies t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment, therefore, the notice u/s 148 r.w.s. 147 of the I.T. Act, 1961 satisfies the time limit for issue of notice as provided in Section 149 of the Act. As required by section 151 of the income-Tax Act 1961, the reasons are hereby put up for the kind perusal and recording of satisfaction.? 5. In the counter affidavit filed by the respondent-revenue, it is stated that total income of ₹ 1,13,95,910/- was declared in the original return filed on 2nd December, 2003. The petitioner had not disclosed income earned by way of fee for technical services. Thereafter, on 3rd November, 2004 the return was revised to ₹ 12,13,05,190/-. In the revised return the income earned from software sold to M/s Bharti Telesonic Limited was referred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n but the receipt was disclosed in the revised return and the aspect/ question of taxability/ exemption specifically considered. During the course of the original reassessment proceedings the entire transaction itself and the consideration paid under the said transaction were examined in depth. In the assessment order dated 30.03.2006, it was held that the fee for licensing the software to the Indian customers was taxable as royalty/ fee for technical services under Article 13 of DTAA and Section 9(i)(vi) and (vii) of the Act. The income was subjected to tax @ 10%. Article 7 and Section 44D was not invoked. 8. At best, the reasons recorded by the Assessing Officer noted above disclose that the Assessing Officer had not correctly applied ..... X X X X Extracts X X X X X X X X Extracts X X X X
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