TMI Blog2019 (10) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... s made. This Court in Commissioner of Income Tax V/s. M/s. NGC Networks (India) Pvt. Ltd. [ 2018 (5) TMI 1148 - BOMBAY HIGH COURT] has held that a party cannot be called upon to perform an impossible act i.e. to comply with the provision which was not in force at the relevant time. Admittedly, the Explanation if applicable is introduced later by a retrospective amendment. Thus, there could be no obligation to deduct tax at source when the payments have been made to the service providers abroad in the absence of a specific provision at the time when the payments were made. - Decided against revenue - INCOME TAX APPEAL NO. 690 OF 2017 - - - Dated:- 24-9-2019 - M.S. SANKLECHA NITIN JAMDAR, JJ. Mr. Suresh Kumar for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent had paid fees for professional services outside India without TDS deduction to (1) Rahman Rahman Haq., Bangladesh (2) KPMG Huazhen, China (3) KPMG, Mauritius (4) KPMG, Portugal (5) KPMG, Sweden (6) KPMG, Accounts N.V. The Netherlands (7) Background Bureau Inc. USA (8) Sidney Austin LLP, USA (9) Scherzer International, USA (10) Conference Board Inc. USA (11) KPMG IFRG Ltd. UK (12) KPMG, LLP, USA (13) KPMG USCMG Ltd. UK and (14) KPMG International, the Netherlands ( service providers for short). 4. During the course of assessment proceedings for the subject assessment year, the Assessing Officer disallowed the professional fees paid under Section 40(a)(i) of the Act to the service providers outside India. This on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t source to service providers in all countries (save China). The Assessee being aggrieved to the extent the disallowance for non deduction of tax at source in respect of payment made to service providers in China. The Tribunal heard both the appeals together. The impugned order is a common order for Assessment Year 2007-08 and 2008-09. It allowed the respondent s appeal and dismissed the Revenue s appeal for the subject Assessment Year 2008-09 for the reasons indicated in its very order while dealing with the Assessment Year 2007-08. In the Revenue s appeal it found that services received by the respondent outside India were in the nature of audit and Advisory. It held that none of the services had attributes of making available of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order to the extent it relates to A.Y. 2007-08. Mr. Suresh Kumar informed us that the appeal was dismissed for non-removal of office objections. However, the tax effect is less than the limit provided in the CBDT Circular dated 8th August, 2019. Thus, the appeal would not be pressed. In the above circumstances, we took up this appeal for consideration. 9. From the questions proposed by the Revenue, it is clear that there is no challenge by them to the findings of the Tribunal that the payments made by the respondent to its service providers is covered by the DTAA. There is no challenge to the applicability of DTAA in favour of the respondent. In fact, the only challenge is the question urged, as reiterated by the Reve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... V/s. M/s. NGC Networks (India) Pvt. Ltd. (Income Tax Appeal No.397 of 2005, decided on 29th January, 2018) has held that a party cannot be called upon to perform an impossible act i.e. to comply with the provision which was not in force at the relevant time. Admittedly, the Explanation if applicable is introduced later by a retrospective amendment. Thus, there could be no obligation to deduct tax at source when the payments have been made to the service providers abroad in the absence of a specific provision at the time when the payments were made. 12. In view of the above facts, the questions as proposed by the Revenue are academic, as the basis of the Tribunal s order that the amounts paid to the service providers is not incom ..... X X X X Extracts X X X X X X X X Extracts X X X X
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