9911796707
TMI Blog2017 (6) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... on) - 2, Delhi ('CIT') whereby the application filed by the Petitioner for waiver of interest under Section 220 (2) of the Income Tax Act, 1961 ('Act') was rejected on the ground that the Petitioner failed to meet the very first condition laid down in Section 220 (2A) of the Act viz., that it failed to show that it had suffered genuine hardship'. 2. The background facts are that the Petitioner is the branch office of Pioneer Overseas Corporation, United States of America ('POC US‟). The Petitioner is engaged in Contract Research Activities and cultivation of parent seeds. Since the Petitioner has been regularly filing its returns of income. Since the Assessment Year ('AY') 1993-94, it has been claiming exemption by treating its entir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the AO in subsequent AYs 2002-03 to 2006-07. 6. In the remand proceedings, the AO attributed reimbursed cost plus mark-up of 17% as appropriate arm's length price for the research services provided by the Petitioner to POC US for the AYs 1997-98 to 2001-02. In the year 2005 POC US invoked the Mutual Agreement Procedure ('MAP') under Article 27 of the India-US Double Taxation Avoidance Agreement ('DTAA') and sought resolution of the tax matters pertaining to the Petitioner. Consequent upon negotiations between the Competent Authorities of the two countries, an agreement was concluded with respect to allocation of taxing rights qua the income taxable in India in the hands of the Petitioner branch (PE) and setting off of the taxes paid in I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t did not suffer any 'genuine hardship'. Referring to the decision of the Supreme Court in B.M. Malani v. Commissioner of Income Tax (2008) 306 ITR 196 (SC), Mr. Vohra submitted that "a genuine hardship would, inter alia, mean a genuine difficulty. That per se would not lead to a conclusion that a person having large assets would never be in difficulty as he can sell those assets and pay the amount of interest levied." Mr. Vohra has also relied on the decision of the High Court of Kerala in Commonwealth Trust (India) Limited v. Deputy Commissioner of Income-tax (Assessment), Special Branch, Calicut (2006) 280 ITR 70 (Ker.) to urge that "whether the non-payment of the tax is due to circumstances beyond the control of the Assessee and whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having paid interest, there was no bar to the CIT considering application on its merits in accordance with law. 14. Mr Vohra referred to the decision in K.L. Jaiswal v. Wealth-Tax Officer (1996) 221 ITR 426 (MP), where is was explained that the words 'genuine hardship' cannot be construed only as financial hardship but would include other forms of hardships in the facts and circumstances of a case. Further, the long period when the negotiations were in progress i.e., nearly the six years was not on account of any default of the Petitioner. Furthermore, the disputed demand during such period was covered by bank guarantee in terms of the Instruction No. 2 dated 28th April 2003. It is stated that the amount of interest levied under Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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