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2018 (3) TMI 942

) - assessee in default - revision u/s 263 - Held that:- It is not in dispute that in the original assessment order dated 3.5.2005, AO did not advert to the applicability of the provisions u/s 9(1)(ii) or the provisions of the DTAA between India and Japan but considered the case only u/s 6 of the Act in respect of the residential status of the employee. In view of the later decision of the Tribunal dated 21st October 2005 to the effect that the payment made to the expatriate technicians in India is taxable in India irrespective of their stay, CIT correctly held that the original assessment order passed by the AO is erroneous in so far as the provisions of Section 9(1)(ii) of the Act and the DTAA between India and Japan have not been taken i .....

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AWAL, PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER Appellant by: Smt. Rajni Mahajan, Advocate Respondent by: Shri S.S. Rana, CIT DR ORDER PER K. NARASIMHA CHARY, JM Aggrieved by the order dated 6.12.2006 u/s 263 of the Income-tax Act, 1961 ( the Act ) passed by the Commissioner of Income-tax, Delhi-XVII, New Delhi ( CIT ), assessee preferred this appeal. 2. Brief facts of the case are that the assessee is a non resident foreign company incorporated in Japan and is engaged in the business of carrying passengers and cargo by air. Under the Double Taxation Avoidance Agreement between the Government of India and Government of Japan, the income derived by its operations is taxable in Japan. 3. Pursuant to the survey conducted on 24.2.2 .....

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fter affording an opportunity to the assessee, learned CIT passed the impugned order holding that the assessee was required to deduct tax on the payments made to all the four employees mentioned in the proposal u/s 263 submitted by the AO, but in view of the plea taken by the assessee that the order in so far as two employees is concerned has merged with the orders of the learned CIT(A), learned CIT held that the assessment order was required to be modified in respect of the two other employees, namely, Mr. Takashi Suzuki and Mr.Tetsuo Mitera. The assessee is, therefore, challenging this order u/s 263 in this appeal, but with a delay of 120 days. 6. It is submitted on behalf of the assessee that in view of the fact that one Mr. Neeraj Sharm .....

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the summons issued u/s 131 of the Act, the assessee submitted all the details to the learned AO, upon examination of which and due consideration thereof, the learned AO held that the assessee is in default only in respect of two employees and such view taken by the learned AO was proper. According to her the revenue is now taking recourse to Section 263 of the Act, which is only a change in its earlier adopted view and line of thought of application and is in no manner a consequence to discovery of any error in the order of the learned AO. It is further submitted by the learned AR that this Tribunal passed order dated 27.2.2017 in ITA No.4172/Del/2005 in respect of the two employees, viz., Mr. Masao Koga and Mr. Kiyonori Yana. Basing on th .....

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d legal and cannot be interfered with. 10. We have gone through the record in the light of the submissions on either side. Out of the four employees, learned AO passed order u/s 201(1) and 201(1A) of the Act in respect of two employees considering the residential status u/s 6 of the Act whereas in the revision proceedings, learned CIT(A) reached a conclusion that in view of the decision of the Tribunal in the case of Pride Foramer vs ACIT (supra), the applicability of the provisions u/s 9(1)(ii) of the Act and also the provisions of the DTAA between India and Japan are relevant inasmuch as in view of the law declared in the Pride Foramer vs ACIT (supra), payment made to expatriate technicians in India is taxable in India irrespective of the .....

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the deduction of tax on the payments made to all the four employees requires consideration and for that purpose all the employees stand on the same footing. Since the case of two employees, namely, Mr. Masao Koga and Mr. Kiyonori Yana has already been decided by this Tribunal as being covered by the decision of the Hon ble Apex Court in the case of Pradeep J. Mehta vs CIT (supra), we do not think it necessary to take a different view in respect of these two employees, viz. Mr. Takashi Suzuki and Mr.Tetsuo Mitera. Admittedly, the matter relating to the employees covered by the original assessment order is set aside to the file of the learned AO, we, therefore, set aside this matter also to the file of the AO for considering the case afresh i .....

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