TMI Blog2000 (8) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. The petitioner is a foreign company incorporated in France. It is engaged in the business of oil exploration and providing expertise and assistance in the said field throughout the world. During the relevant assessment year, the petitioner-company was operating under three contracts with the Oil and Natural Gas Commission. These contracts were for drilling operation by employing its own "IDA" rig and also for manning and management services for supervision of drilling activities carried on by the ONGC on its rigs, Sagar Vijay and Sagar Bhushan. The petitioner-company supplied its own technical personnel and expertise in manning such contracts. In the assessment year 1988-89, the IDA rig was sold to Mahindra and Mahindra Ltd. and the operations for the IDA were for part of the year, whereas operations on the other rigs owned by the ONGC continued up to the assessment year 1991-92. The petitioner being a foreign company incorporated in France its taxability in respect of income accrued or deemed to accrue in India is governed by the double taxation avoidance agreement. A copy of the said treaty is annexure 1 to the writ petition. The petitioner being a non-resident was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 5 to the petition. In another letter dated January 14, 1999, the petitioner wrote to the Department stating that it had made full disclosure in the original return and there was no undisclosed income. The Department was again asked to disclose the reasons for initiating proceedings for reassessment. In response to the said letter, the petitioner received a reply dated February 12, 1999, vide annexure 7 to the petition stating that in view of the Tribunal's decision rendered in the case of Boudier Christian relating to the petitioner-company's technician deputed to India, the income of the company was treated as to be a fee for technical services and not business income. A true copy of the letter dated February 12, 1999, is annexure 7 to the petition. A true copy of the decision of the Tribunal in Boudier Christian's case is annexure 8 to the petition. The contention of the petitioner is that Boudier Christian's case was a decision pertaining to the taxability of income of an expatriate employee of the petitioner. The issue of eligibility of income to tax of the company was neither an issue directly or indirectly involved in that case. Learned counsel for the petitioner has c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er-affidavit. In paragraph 3 of the same, it is alleged that the petitioner has an alternative remedy before the income-tax authorities. In paragraph 5, it is alleged that the taxability of the petitioner-company was governed by the provisions of the treaty between India and France and also the relevant provisions of the Income-tax Act. In paragraph 6 of the same, it is stated that on May 25, 1987, the Department had passed a provisional order. In paragraph 11, it is stated that the assessments have been reopened in the light of the findings of the Tribunal in cases of the petitioner's employees. In paragraph 13, it is stated that the Tribunal in the case of Boudier Christian held that the income of the petitioner was assessable as fee for technical services. In paragraph 14 of the same, it is alleged that section 147 of the Income-tax Act was amended from April 1, 1989, and, hence, the existence of pre-conditions mentioned earlier are no longer necessary. In paragraph 15 of the same, it is alleged that the notices under section 148 were issued to give effect to the findings of the Tribunal. In paragraph 17, it is stated that the impugned notices were issued not because of change o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year." This new section has made a radical departure from the original section 147 inasmuch as clauses (a) and (b) of the original section 147 have been deleted and a new pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be a direction as contemplated by section 153(3)(ii) it must be an express direction necessary for the disposal of the case before the authority or court vide Rajinder Nath v. CIT [1979] 120 ITR 14 (SC) ; Gupta Traders v. CIT [1982] 135 ITR 504 (All) ; CIT v. Tarajan Tea Co. (P.) Ltd. [1999] 236 ITR 477 (SC) and CIT v. Goel Bros. [1982] 135 ITR 511 (All), etc. The case of an expatriate employee was to be decided on the basis of the provisions of article XIV of the treaty, whereas corporate income was to be decided on the basis of either article III or article XVI of the treaty or section 44BB of the Act. Hence, the observations of the Tribunal in Boudier Christian's case was not a direction necessary for the disposal of the appeal relating to the petitioner. The exigibility of income of the petitioner from manning and management contracts was never an issue directly or indirectly involved in the case of Boudier Christian. Moreover, the Tribunal in the appeal relating to the assessment of the petitioner's own case, vide Deputy CIT v. ONGC [1999] 70 ITD 468 (Delhi) has considered the decision of the Tribunal in Boudier Christian's case. It is settled law that an appeal is a conti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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