9911796707
TMI Blog2021 (5) TMI 565X X X X Extracts X X X X X X X X Extracts X X X X ..... SPC) for providing feed review services, preparation of request for proposal documents, assistance in bidding process, cost estimation services, construction supervision, etc. in relation to construction of marine, rigs and tank facilities by GSPC in Gujarat. The applicant had established India project office for the purpose of rendering only onsite/onshore services to GSPC as per the PMC agreement. No part of the services referred to as off-shore services in the PMC agreement was carried out by the applicant's India project office. The applicant has raised the following questions in relation to this PMC agreement in this application : "Question 1. Whether, on the stated facts and in law, the sums received by the applicant under the project management consultancy agreements (PMC agreement) for rendering offshore services to GSPC LNG Limited are not liable to tax as fee for technical services under article 13 of the India-UK Double Taxation Avoidance Agreement (DTAA) ? Question 2. Where the answer to question No. 1 is negative, whether on the stated facts and in law, the sums received by the applicant under the PMC agreement for rendering offshore services to GSPC LNG Ltd. a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 2015-16 which was pending in the scrutiny assessment under section 143(3). A notice under section 143(2) was issued by the Department on September 19, 2017. Thereafter, a notice under section 142(1) dated October 23, 2017 along with a questionnaire was issued to the applicant requiring it to furnish certain details. It was submitted that in the questionnaire specific information pertaining to technical services provided to the Indian customers during the year was called for invoice-wise. Further, the details of employees and other persons who had visited India in this regard, their period of stay, purpose and the project for which their services were provided was also called for. However, there was no compliance at all to the questionnaires sent along with notice under section 142(1) dated October 23, 2017. The present applications were filed much later on May 15, 2018 without making any compliance in the course of assessment proceeding before the Assessing Officer (AO). The Revenue, therefore, has contended that the applications were not maintainable as the proceeding was already pending in respect of the issue as raised in the applications on the date of filing of applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income received in respect of provision of offshore services was claimed as not taxable in India. It was submitted that no specific question pertaining to offshore services was raised by the Department in any of the notices. According to the learned authorised representative the bar in clause (i) of the proviso to section 245R(2) will be triggered only if specific question as raised by the applicant before the Authority for Advance Rulings was also raised by the Assessing Officer in the notices issued. He submitted that the questionnaire was merely asking for standardized general information and no specific question in respect of taxability of offshore services was ever raised by the Department. As regarding reference to Transfer Pricing Officer it was submitted that in form 3CEB only transaction pertaining to provision of onshore services were reported by the applicant. Therefore, the reference by the Assessing Officer to the Transfer Pricing Officer for determination of arm's length price of transactions was with respect to the transactions undertaken by the applicant's project office in India and not undertaken by the applicant directly from U. K. The learned authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Assessing Officer. The notice indicated that it was for complete scrutiny under computer aided scrutiny selection (CASS). It is found from the CASS selection reason that the return of the applicant was selected for scrutiny for the following reasons : Reason code Reason description Issue TP 07. 01 Deemed international transactions by person other than AE in pursuance of a prior agreement (TP risk parameter) (S. No. 20 form 3CEB) Whether value of international transactions in pursuance of a prior agreement have been correctly shown in form 3CEB and return of income. TA 03.03 High ratio of refund to TDS (Part BTTI of ITR) Whether refund claim is justified. BR 01.01 Tax credit claimed in ITR is less than tax credit available in 26AS (26AS and Part B-TTI of ITR) (Verification of corresponding receipts/investments) Whether sales turnover/receipts has been correctly offered for tax. TA03.06 High ratio of refund to TDS relating to section 195 (TDS credit statement as per 26AS and Part BTTI of ITR) Whether refund claim is justified. 8. From the CASS selection reason, it is found that one of the reasons for selection was whether sales turnover/receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvices were provided to the Indian customer during the year ? If yes, please submit the names of employees and other persons who visited India in this regard stating their period of stay, purpose and for which project these services were provided and whether in these projects the assessee has supplied any products. The information should be provided invoice-wise." It is thus found that the Assessing Officer had raised specific questions about the agreements/contracts with Indian customers and also about the technical services rendered to Indian customers and a copy of the agreement/contract was also called for. The Assessing Officer had also raised a specific query about the details of employees and other persons who had visited India in connection with technical services, their period of stay, purpose and the project for which their services were provided. As already mentioned earlier, the contract of the applicant with Reliance stipulated that there would be occasional short visits of employees for attending meetings with Indian contractors. Thus, this question is found relevant with the PTC agreement with Reliance but the details as requisition were never provided. As per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ject matter of verification in the proceeding initiated under section 143(2) of the Act. If the applicant's return of income for the assessment year 2015-16 was only in respect of onshore services rendered by the project office, it would not have claimed credit for TDS on offshore services as such services were not rendered by the project office. Therefore, the notice was not only for verification of the receipt for the project office but also for verification of undisclosed receipts in the ITR vis-a-vis the receipts as per form 26AS, which admittedly was in respect of offshore services. 12. Another contention of the applicant is that no specific question pertaining to offshore services was ever raised by the Department in any of the notices. What is relevant to consider here is whether the issue involved in the questions raised in the applications filed before this authority was subject matter of pendency before the Assessing Officer or not. The question of pendency will arise only in a case where the application is filed after issue of scrutiny notice by the Department. Therefore, what is relevant to consider is whether the issue involved in the questions raised in the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... age 382 of 382 ITR) : "29. Therefore, inasmuch as, the notices under section 142(1) of the Act raising the very questions that form subject matter of the applications by the petitioner before the Authority for Advance Rulings for the assessment years 2008-09 and 2009-10 were issued prior to the filing of the applications, clause (i) of the proviso to section 245R(2) of the Act stood attracted. Therefore the rejection by the Authority for Advance Rulings of the applications filed by the petitioner for advance ruling in respect of the assessment years 2008-09 and 2009-10 are not erroneous and do not call for any interference. 30. However, as far as the notices under section 142(1) of the Act issued by the Assessing Officer to the petitioner in respect of the equipment supply contracts for the assessment year 2010-11 is concerned, the notices were issued only on November 24, 2012 whereas the date of filing of the application before the Authority for Advance Rulings was September 23, 2011." In the present case also the notice under section 142(1) was issued prior to the filing of the present applications and as already discussed earlier the issue involved in the questions that ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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