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2016 (5) TMI 698 - DELHI HIGH COURT

2016 (5) TMI 698 - DELHI HIGH COURT - [2016] 385 ITR 99 - AAR application rejected - whether the AAR was justified in rejecting the application on the ground that the question referred to it was pending consideration before the Income Tax authorities, by virtue of notice having been issued on 13th August 2013 under Section 143 (2) of the Act with reference to the return filed for AY 2012-13 thereby attracting the bar under clause (i) of the proviso to Section 245R (2) of the Act? - Held that:- T .....

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to Section 245R (2) of the Act. - It is only if on the date of filing of the application before the AAR the question raised therein was already the subject matter of proceedings before the income tax authorities that the bar in terms of the proviso to Section 245R(2) of the Act would apply. If such application is not already pending on the date of the application, and is the subject matter of a notice issued thereafter by the income tax authority, it cannot be said that such question is "al .....

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ing that “there are certain points in connection with the return income submitted by you on 29th November 2012 for the assessment year 2012-13 on which I would like some other information” does not tantamount to the issues raised in the application filed by the Petitioner before the AAR on 20th September 2013 being already pending before the AAR. - W.P.(C) Nos. 8799/2015, 9522/2015, 8840/2015 & 8798/2015 - Dated:- 13-5-2016 - S. MURALIDHAR & VIBHU BAKHRU JJ. For the Appellant: Mr. Deepak Cho .....

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er. 2. The brief facts are that the Petitioner, a company incorporated under the laws of South Korea, is engaged in the manufacture of electric wires and cables for power distribution. It is stated that the Petitioner has been executing several projects in India involving supply, laying, jointing, testing and commissioning of power cables. It is further stated that the Petitioner executes its onshore works through Project Offices in India established in accordance with the Regulations under the .....

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3 which was settled in favour of the Petitioner by this Court in the decision in Director of Income Tax v. L.G. Cables (2011) 197 Taxman 100 (Del) (the Petitioner was earlier known as L G Cables). It is stated that the Department s appeal against the said order is pending before the Supreme Court. 4. It is further pointed out that the Petitioner had earlier filed four applications before the AAR being AAR No. 858 to 861 of 2009 for the determination of the taxability of offshore supplies for fou .....

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pellate Tribunal ( ITAT ) for AYs 2006-07 to 2008-09 have also been dismissed by the ITAT holding in favour of the Petitioner on the said issue of taxability of offshore supplies, by separate orders, following the decision of this Court for the earlier years. 6. The present petitions concern AYs 2012-13 and 2013-14. For AY 2012-13, the Petitioner filed its return of income on 29th November 2012. On 13th August 2013, the Assessing Officer ( AO‟) issued notice under Section 143 (2) of the Ac .....

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filed its returns for AY 2013-14 but did not offer the revenues earned from offshore supplies in connection with three projects for PGCIL to tax as the Petitioner took the stand that no portion of the profits arising therefrom is taxable in India. 7. Relevant to the returns AY 2013-14, the AO issued a notice under Section 143(2) of the Act to the Petitioner on 15th September 2014. 8. Thereafter on 3rd August 2015, the aforementioned four applications pertaining to the four different transaction .....

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plications. When it was pointed out that the applications pertaining to AY 2013-14 had been filed even before the filing of the returns, the AAR observed that if the issues are identical in all the four applications and if even in one of the applications, the notice is issued under Section 143(2), in our considered opinion, it will be a case of pending question before the Income Tax authorities 10. Notice was issued in these petitions on 14th/15th September 2015 and 6th October 2015. A short rep .....

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Act. 12. The said question stands answered in favour of the Petitioner and against the Department in the recent judgment of this Court in Hyosung Corporation v. The Authority for Advance Rulings (2016) 382 ITR 371 (Del) as further modified by the order dated 6th April 2016 in Review Petition No. 143/2016. In the said decision, this Court noticed that the earlier view taken by the Court in the decision in Net App BV and Sin Oceanic Shipping ASA v. The Authority for Advance Rulings (2013) 357 ITR .....

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with the return that was filed would not result in attracting the bar under clause (i) of the proviso to Section 245R (2) of the Act. In para 27 of the said judgment (as substituted by the order dated 6th April 2016 in Review Petition No. 143/2016), the Court observed as under: 27. Turning to the notice issued in the instant case to the Petitioner under Section 143(2)(ii) of the Act, it is seen that it is in a standard format which merely states that there are certain points in connection with t .....

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R entertaining and allowing the application. 14. In Hyosung Corporation v. The Authority for Advance Rulings (supra) this Court also dealt with one of the notices under Section 142(1) which had been issued to the Assessee subsequent to the date of filing of the application before the AAR and had explained that the words already pending‟ occurring in Section 245-R (2) should be related to the date of filing of the application and not what happens subsequent to the filing of such application .....

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