TMI Blog2007 (1) TMI 640X X X X Extracts X X X X X X X X Extracts X X X X ..... plicant and/or its beneficiaries and, if so, treat the applicant as a resident of the USA and extend to it the benefits of the treaty. (b) To decide whether the applicant has a permanent establishment in India within the meaning of Article 5 of the treaty ; and (c) To clarify that if the applicant does not have a permanent establishment, the business income arising to the applicant shall not be chargeable to tax in India. 2. The applicant approached the Authority in the said application praying for rulings on the following questions: 1. Whether, on the facts and the circumstances of the case, the profits arising to General Electric Pension Trust (hereinafter referred to as the 'applicant') from the sale of portfolios inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es was being taxed in the USA in the hands of the beneficiaries of the applicant, was not readily available and, therefore, neither the applicant nor the beneficiaries could forever be regarded as not being subject to tax in the USA. Further whether the applicant is or is not subject to tax at a particular point of time cannot determine his eligibility to avail of the benefit of the treaty or otherwise in perpetuity. The applicant claims to have obtained material to establish that almost all of its beneficiaries (nearly 99.98 per cent.) are assessable to tax in the USA and that in the year 2004, out of 220,762 beneficiaries only 41 were not subject to tax and the remaining were subject to tax in the USA. It also filed certain documents in i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... treaty benefits in the light of the legal principles laid down by the AAR. It is stated that the application is not filed under Rule 18 and that rules 5 and 19 of the Rules confer power on the Authority which can be exercised to do justice. The applicant prays for issuing a clarification in terms of reliefs claimed in the petition in the interest of justice. 7. We have heard Mr. Dinesh Kanabar, learned C.A. for the applicant as well as Mr. S.D. Kapila, learned Counsel, for the Commissioner, in regard to maintainability of the petition. 8. Inasmuch as rules 5 and 19 of the Rules are pressed into service by the applicant in regard to the maintainability of the application, it would be useful to read them here (see [1996] 222 ITR (St.) 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication. It follows that the power thereunder is meant to be exercised before the disposal of the application filed under Section 245Q(1) of the Act and not thereafter. Rule 19 empowers the Authority to amend any order passed by it for the purpose of rectification of a mistake apparent from the record and that power could be exercised after the pronouncement of the ruling by the Authority but before the ruling has been given effect to by the Assessing Officer. It appears to us that the power under Rule 5 has to be exercised before the pronouncement of the ruling and the power under Rule 19 may be exercised after pronouncement of the ruling but before it is given effect to by the Assessing Officer. We may incidentally refer to Rule 18 as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icant has filed certain material though the applicant has had sufficient opportunity and the said material was available at the time of hearing of the application by the Authority, it was, however, not filed and the ground now taken is that it was not readily available at that stage. Thus neither Rule 5 nor Rule 19 can help the petitioner. 12. However, Mr. Kanabar strenuously argued that neither the applicant nor the beneficiaries could forever be regarded as not being subject to tax in the USA and consequently denied the benefit of the double taxation avoidance treaty between India and USA and prays that a clarification/direction be issued to the Assessing Officer to verify as to who among the beneficiaries are paying tax in USA and als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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