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TMI Blog2019 (10) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... ection with the IT Service Agreement with these two companies that the applicant has filed the present application on 1-4-2019 for an advance ruling under section 245Q of the Act on the following questions: - 1. Whether, based on the facts and circumstances of the case and in law, under the terms of the IT Services Agreement ('the Agreement'), the amount received amounting to INR 31,67,20,806 by the Applicant from Valmet Chennai Private Limited ('Valmet Chennai') and Valmet Automation Private Limited ('Valmet Automation'), for provision of IT support services rendered from Finland, would be deemed to arise in Finland and thus not taxable ion India in view of the provisions of Article 12(5) of the Double Taxation Avoidance Agreement signed between India and Finland ('India-Finland Tax Treaty')? 2. Whether, based on the facts and circumstances of the case and in law, the amount received by the Applicant (included in INR 31,67,20,806 above) from Valmet Chennai and Valmet Automation, for reimbursement of third party cost incurred for providing IT support services without any income element embedded therein, would not be chargeable to tax in India? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as submitted that Valmet Automation has been merged with Valmet Chennai w.e.f. 1-4-2019 and in case if it is held that two different transactions are not maintainable in a single application then the subject application may be deemed to be filed only in respect of transaction of provision of IT support services to Valmet Chennai and reference to Valmet Automation Private Limited (wherever provided in the application) be ignored. 4. On the issue of pendency, the applicant has admitted that notice under section 143(2) dated 18-7-2017 for the AY 2016-17 was received by it. Further it was submitted that the said notice does not specifically discuss/call for details to analyse the tax liability of income from IT support services. Therefore, mere issuance of notice under section 143(2) of the Act would not result in constituting any 'question' to be pending before the income tax authority. Reliance in this regard was placed on the following decisions: (a) Sage Publication Limited UK (387 ITR 437) (Delhi) (b) LS Cable and System Limited (385 ITR 99) (Delhi) 5. As regarding allegation of the revenue that the present applicant was merely an afterthought designed prima facie fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Authority to entertain these applications. The premise on which this objection proceeds is that section 245N of the Act defines 'advance ruling' as determination by the Authority in relation to a transaction which has been undertaken or is proposed to be undertaken by a non-resident applicant so also in relation to the tax liability of a non-resident in relation to a transaction, but in each of these applications a series of transactions are involved, therefore, the Authority has no jurisdiction to pronounce ruling in regard to series of transactions. Mr. Nishith Desai, learned counsel appearing for the applicant, has argued that as per section 13 of the General Clauses Act 1897 in all Central Acts and Regulations, words in the singular shall include the plural and vice-versa. We may observe that on the face of it the preliminary objection raised by the Commissioner lacks not only merit but also rationality. After some reluctance Mr. Chopra has given up this objection, we, therefore, do not propose to deal with this aspect any further except to mention that section 13 of the General Clauses Act 1897 is a complete answer to the objection raised by the Commissioner. 7. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iny Selection (CASS). It is found from the CASS Selection Reason that the return of Valmet Technology Oy for AY 2016-17 was selected for scrutiny for the following two reasons: - CASS Selection Reason and Issue PAN: AAGCM4532L Name: VALMET TECHNOLOGIES OY AY: 2016-17 Reason Code Reason Description Issue Underlying Information Elements Rationale TP02.01 International transaction(s) in respect of intangible property (T.P. Risk Parameter) (Form 3CEB) (S. No. 12, Form 3CEB) Whether value of international transactions in respect of intangible property are correctly shown in Form 3CEB and return of income BR01.01 Tax credit claimed in ITR is less than tax credit available in 26AS (26AS and Part B- TT1 of ITR) (Verification of corresponding receipts/investments) Whether sales turnover/receipt has been correctly offered for tax 9. From the CASS Selection reason, it is found that the return was selected for scrutiny to examine whether the value of international transaction in respect of intangible property was correctly shown in Form 3CEB and return of income and whether sales turnover/receipt was correctly offered for tax. These reasons do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notices under section 143(2) of the Act. Consequently, the mere fact that such a notice was issued prior to the filing of the application by the Petitioner before the AAR will not constitute a bar, in terms of clause (i) to proviso to Section 245R(2) of the Act, on the AAR entertaining and allowing the applications. 11. In the instant case also the notice was issued in a standard pre-printed format and the specific issue as appearing in this application was not part of the said notice. The Hon'ble Delhi High Court has also held in the case of Sage Publications Ltd, U.K. (387 ITR 437) that issue of notice u/s 143(2) even prior to filing of application before A.A.R. ipso facto would be insufficient to attract automatic rejection of said application under proviso to section 245R(2) of the Act and the SLP filed against this decision was dismissed by the Apex Court. In this case, the Hon'ble High Court had observed as under: It is evident on a plain reading of the notice that it does not address itself to any specific question; it does not even disclose application of mind to the returns save and except the fact that they conform to the instructions which compelled the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X
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