TMI Blog2021 (11) TMI 99X X X X Extracts X X X X X X X X Extracts X X X X ..... it has further brought on record that the Revenue has lost on the very issue in DRP s directions in AY 2006-07 as well. We accordingly conclude that in this factual back-drop that the CIT(A) has rightly held that the impugned section 163 mechanism set into motion by the Assessing Officer against the assessee is not sustainable in law. - ITA Nos. 1132, 1133, 1134, 1135, 1136, 1137, 1138 & 1139/H/2015 with Cross Objections 6, 7, 8, 9, 10, 11, 12 & 13/H/2017 - - - Dated:- 28-10-2021 - Shri Satbeer Singh Godara, Judicial Member And Shri Laxmi Prasad Sahu, Accountant Member For the Revenue : Shri Y.V.S.T. Sai For the Assessee : Shri P. Murali Mohan Rao ORDER PER BENCH: The instant batch of sixteen cases pertaining to a single assessee i.e. M/s Madhucon Sino Hydro JV, Hyderabad involves the following relevant particulars: Sl. No. ITA No. Assessment Year CIT(A) Order, date Case No. Proceedings u/s 1 1132/Hyd/2015 2006-07 ITA No. 0036/CIT(A)-X/2014-15, 19/06/2015 U/s 163 of the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred in fact and law in holding that M/s. Madhucon Hydro (JV) could not be treated as the agent of Sino Hydro Corporation u/s.163 of the Income Tax Act. 3. The assessee s Cross Objections COs 6, 7, 8, 9, 10, 11, 12 13/H/2017, on the other hand, raise the following identical pleadings: 1. The ground no 1 raised by the revenue in the appeal has become Infructuous as the order of the ITAT in ITA Nos. 646 and 701/Hyd/2010 has subsequently been modified by the MA order of ITAT in MA No 33 34/H/2016 dated 12.08.2016. 2. The ground no. 1 raised by the revenue is not correct as there is no direction by the ITAT in ITA Nos. 646 and 701 jHydj2010 in respect of proceedings u/s 163 of Act as held by the Hon'ble ITAT, Hyderabad in its order dated 15.07.2 in ITA No. 246/H/2015. 3. The ground no. 1 raised by the revenue is not correct as the action of the assessing officer in treating the assessee as agent of non-resident was without any basis and without any directions of the IT AT as agitated by the revenue. 4. We notice, at the outset, that assessee s foregoing cross objections suffer from 553 days delay in filing CO Nos. 6 7/Hyd/2017 and 554 d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e JV did not pay the tax deducted at source within time. The matter went upto the Tribunal and the ITAT, Hyderabad for the assessment year 2006-07 decided the issue vide order in ITA No.646 701/Hyd/2010 dated 27.11.2012. The ITAT while disposing the appeal observed that in case the Chinese concern has not filed the return of income, the same may be brought to tax by taking suitable action for bringing the amount to tax in accordance with the provisions of the Act. Consequently, the Assessing Officer proposed to pass order u/s 163 of the I.T. Act against the JV treating the JV as the agent of Sino Hydro Corporation For the assessment year 2006-07, the order u/s 163 was passed on 30.3.2013 without providing opportunity to the appellant and whereas for the rest of the years, the Assessing officer issued show cause notice on 26.2.2013. The Assessing officer passed order u/s 163 of the LT. Act for the assessment year 2006-07 on 30.3.2013 and for the rest of the assessment years on 10.3.2014. The present appeals are directed against the orders passed by the Assessing Officer u/s 163 of the LT. Act. The appeals are posted for hearing and Sri S. Rama Rao is present. He filed the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Hon'ble ITAT issued notice u/s 163 on 30.03.2013 requiring the appellant to state the reasons as to why the JV should not be treated as the Agent of the Chinese company. The Assessing Officer without providing any opportunity passed an order u/s 163 on the same date i.e. 30.03.2013. In the said letter, the Assessing Officer held as under: a) The Hon'ble ITAT in its order dated 27.11.2012 directed to assess the JV on behalf of the Chinese company. b) The Sino Hydro Corporation is in receipt of the income from Madhucon Sino Hydro JV as per the terms of subscription agreement entered into between the two parties; c) The Madhucon Sino Hydro JV, Hyderabad, therefore, can be regarded as an Agent to Sino Hydro Corporation, China. The Assessing Officer, accordingly. treated the Madhucon Sino Hydro JV, Hyderabad as the Agent of Sino Hydro Corporation, China. It is against the said order u/s 163 of the I.T. Act passed by the Assessing Officer, the Madhucon Sino Hydro JV filed the present appeal: In this regard the appellant submits the following explanations for perusal of the Hon'ble CIT (A). a) The Assessing Officer di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount. The Hon'ble ITAT in order in the case of DCIT vs. PVP ventures t.to., in ITA No.1158 to 1162/2010 dated 31.07.2013 held that wherever the tax was deducted at source by the person responsible to pay the amount, the provisions of Sec.163 can not be applied. In view of the above, the appellant submits that it should not have been treated as an Agent of the Chinese Company, Sino Hydro Corporation . I find from the information that Sino Hydro corporation has a permanent establishment in India. The following documents filed by the appellant prove the fact that Sino Hydro possessed permanent establishments in India: 1. PAN Copy of China National Water Resources and Hydro Engineering corporation, issued by Commissioner of Income- Tax, Level III, East Block II, Vivekananda Marg, R.K. Puram, New Delhi 110 066 PAN AACC0705F 2. Copy of the letter issued by DDIT (Int. Tax) to China National Water Resources and Hydro Engineering Corporation Dated 27-02-2003. 3. Copy of the letter issued by RESERVE BANK OF INDIA to China National Water Resources and Hydro Engineering Corporation Dated 17-08-2002 permission to open a Project Office at New Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration, China. In view of the above, the appeals for all the above assessment years are treated as allowed. In the result, the appeal is allowed. 6. Learned CIT-DR vehemently contended during the course of hearing that not only the ld. CIT(A) has erred in law and on facts in deciding the impugned issue of assessee as not assessable as an agent of M/s Sino Hydro Corporation u/s 163 of the Act but also he has patently erred in passing two separate orders in tune with the above extracted Ground No. 1 (supra). 7. We find no merit in the Revenue s foregoing legal as well as technical arguments. This is for the precise reason that the assessing authority appears to have set into motion section 163 mechanism in order to assess the taxpayer herein as an agent of M/s Sino Hydro Corporation (JV Partner) in tune by treating the tribunal s discussion in Revenue s and latter s cross appeals appeal ITA No. 646 701/Hyd/2010 for AY 2006-07 decided on 27/11/2012. The Revenue s endeavor all along; in light of the Assessing Officer s order in issue herein dated 30th March, 2013, is that the earlier coordinate bench directions has settled the issue of the assessee s having acte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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