TMI Blog2018 (2) TMI 1517X X X X Extracts X X X X X X X X Extracts X X X X ..... ambit of section 254(2) of the Act. The ld. DR’s arguments that the assessee is seeking review of the order of the tribunal is not correct. - M.A.No.39/Kol/2017 And M.A.No.40/Kol/2017, I.T.A No.1489/Kol/2011 And I.T.A No.2082/Kol/2010 - - - Dated:- 2-2-2018 - Sri N.V.Vasudevan, JM And Shri Waseem Ahmed, AM For The Applicant : Shri Avishek Kejriwal, ACA For The Respondent : Shri.N.B.Som, JCIT ORDER Per N.V.Vasudevan, JM These are Miscellaneous applications filed by the Assessee u/s.254(2) of the Income Tax Act, 1961 (Act) praying for rectification of certain apparent errors in the common order dated 6.4.2016 of the Tribunal in ITA Nos.1482/Kol/2011 and 2082/Kol/2010 relating to AY 2005-06 2006-07 respectively. 2. Gifford Partner Ltd. ('Gifford' or 'the Assessee') had entered into a contract with Garden Reach Shipbuilding Engineers ('GRSE') in India for rendering the following services with regard to modernisation of the existing shipyard of GRSE:- Preparation of concept papers, Preliminary project report (PPR); Detailed project report (DPR); Engineering services; Project management services; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l other cases; and ( ii) During subsequent years, 15 per cent of the gross amount of such royalties or fees for technical services; and 4. The Tribunal thereafter concluded that FTS has to be taxed in India as per Article 13(2) of the DTAA but as per the provisions contained in the Income Tax Act, 1961 (Act). The following were the findings of the Tribunal in paragraph 55 of its order: 55. We have already seen clause 3.10 of the Agreement between the Assessee and GRSE (see para-47 of this order) which provides that all plans, drawings, specifications, designs, reports and other documents prepared by the Consultant in performing the Services shall become and remain the exclusive property of GRSE. We are therefore of the view that the requirements of clause (c) of Article 13(4) of the DTAA are also satisfied in the present case and therefore the source country (India) has a right to tax the fee in question in accordance with Article 13(2) of the DTAA but subject to the limitation of rate of tax as laid down in Article 13(2). The provisions of the Act in this regard are contained in Sec.115A of the Act..... 5. In paragraph 72 73, the Tribunal concluded on the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxed at 20%. We hold accordingly. 6. In this MAs it has been submitted by the Asssessee That as to the provisions of section 90(2) of the Act, the provision of domestic law or DTAA whichever is beneficial is applicable to the non-resident assessee. It is the plea of the assessee that u/s 115A of the Act FTS is chargeable to tax @20% on the basis of the gross receipts, whereas as per the provision of Article 13(2)(bb)(ii) FTS is taxable @ 15% of the gross amount of such FTS. It is the stand of the assessee that since the provisions of the DTAA are more beneficial, the tribunal ought to have directed that tax should be levied in accordance with the provision of DTAA rather than the provision of section 115A of the Act. It is not in dispute that Assessment order for A.Y.2005-06 and 2007-08 was beyond the period of five years for which the convention between India and U.K came into effect and therefore Article 13(2)(bb)(ii) would alone apply in the present case. 7. When this miscellaneous application was taken up for consideration it was noticed that the miscellaneous application was filed on 17.03.2017 whereas the order of the Tribunal was passed on 06.04.2016. As per the provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly? 10. The Hon ble M.P.High Court in Writ Petition No.4144/2017 in the case of District Central Co-op. Bank Ltd., Raisen Vs. Union of India vide its judgment dated 09th October, 2017 had to deal with an identical case such as the Assessee. The Hon ble Court relied on the decision of the apex Court in the case of M. P. Steel Corporation Vs. Commissioner of Central Excise reported in (2015) 7 SCC 58 wherein it was held that though periods of limitation, being procedural law, are to be applied retrospectively, yet if a shorter period of limitation is provided by a later amendment to a statute, such period would render the vested right of action contained in the statute nugatory as such right of action would now become time barred under the amended provision. Therefore a statute which while procedural in its character, if it affects vested rights adversely it has to be construed as prospective. Following the aforesaid view, the Hon ble M.P.High Court held as follows: 08. Keeping in view the judgment referred by their lordships in the aforesaid case and the judgment delivered by their lordships in the M.P. Steel Corporation (Supra), in the present case also the new law of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aneous application filed by the assessee is concerned, the ld. Counsel for the assessee reiterated the submissions as were made in the miscellaneous application. 14. The ld. DR submitted that the mistake pointed out by the assessee in these miscellaneous applications cannot be said to be a mistake apparent from the record. In this regard the ld. DR drew our attention to the various grounds of appeal raised by the assessee before the tribunal which were as follows : GROUNDS OF APPEAL The grounds stated here under are independent of, and without prejudice, to one another. I For that the Assessing Officer and the Dispute Resolution Panel ( hereinafter referred to as the authorities below) erred in holding that the Appellant is having a Permanent Establishment('PE'} in India in terms of Double Taxation Avoidance Agreement between India and United Kingdom of Great Britain and Northern Ireland ('DTAA '. II Without prejudice to the Ground No. 1, the Appellant states and submits that the authorities below erred in holding that, the entire amount received by the Appellant, including those in United States Dollar ( 'USD '}was attributabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arwal (202 ITR 14) iii) Pr.Commissioner of Income Tax, Surat-1 Vs. Gomti Silk Mills Ltd. In Special Civil Application No.15301 of 2017 and Special Civil Application No.15302 of 2017 dated August 29, 2017 and reported in 2017-TIOL-1768-HC-AHMIT. 17. His next submission was that the power to rectify a mistake u/s 254(2) of the Act is restricted to only to rectify a mistake apparent on the face of the record. If the issue sought to be agitated in a miscellaneous application involves debatable issues which involves long drawn process of reasoning, then it cannot be said that there is a mistake apparent on the face of the record. In support of the above proposition the following decision were brought to our notice : i) Hon ble Supreme Court in the case of Deva Mital Powders Pvt. Ltd. Vs Commissioner of Trade Tax, U.P. in Civil Appeal No.5607 of 2007. ii) Maruti Insurance Distribution Services Ltd reported in 212 Taxmann 123 (Delhi). 18. The ld. DR also brought to our notice that the tribunal has dealt with the contentions of the assessee on the taxability of FTS before the AO and the DRP as well as before the tribunal and in all these submissions made by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn processing of reasoning is required to decide the miscellaneous application but if ultimately there can be only one possible view then it cannot be said that the power to rectify such mistake is outside the ambit of section 254(2) of the Act. The ld. DR s arguments that the assessee is seeking review of the order of the tribunal is not correct. As we have already stated that this plea was already put forth in the submissions made before the tribunal but was not considered and omitted to be considered by the tribunal. For all the above reasons we accept the miscellaneous applications filed by the assessee. 21. The Order of the Tribunal is amended by substituting the existing paragraphs 72 73 of the order of the Tribunal for the following paragraphs 72 73: 72. Having come to the conclusion that there was no PE of the Assessee in India during the relevant previous year, the question that would now require consideration is with regard to taxability of the FTS. Considering the fats of the case, as per Article 13(2) of the India-UK DTAA, FTS income of non-resident is taxable @ 15% on gross receipts. Whereas as per section 115A of the Act, FTS is taxable @ 20% on gross ..... X X X X Extracts X X X X X X X X Extracts X X X X
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