TMI Blog2022 (11) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... - Misc. App. No. 527/Del/2017 [ in I.T.A No. 3578/Del/2013 ] - - - Dated:- 12-10-2022 - SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER AND SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER Assessee by : Ms. Shashi M. Kapila, Adv. Shri Pravesh Sharma, Adv.; Advocate Department by : Shri Vijay Choudhary, Sr. D. R.; ORDER PER C. N. PRASAD , J. M. 1. In the Misc. application the assessee request to recall the order of the Tribunal in ITA. No. 3578/Del/2013 dated 10.03.2017. The assessee in the Misc. application stated as as under:- Miscellaneous Application under section 254(2) of the Income Tax Act, 1961. Arising Out of I.T.A. No.3578/Del/2013 In the case of-Standard Chartered Grindlays P Ltd. Assessment Year: 1995-96 1. The captioned appeal in I.T.A.No.3578/Del/2013 in the case of Standard Chartered Grindlays Bank Pty was disposed of by the Tribunal vide order dated 10.3.2017. 2. The Appellants above named beg to present this Miscellaneous Application for rectification of certain mistakes which are apparent from record in the said Impugned Order. (Copy of Impugned Order attached Application). Annexure 1 to this 3. That mistakes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Impugned assessment order for Assessment Year 1995-96 dated 3.12.2010 in which the Ld. AO had dis-allowed the deduction of interest paid by the Indian PE of Rs. 24,86,75,000 to Head Office for its Indian Business. 4.2. This dis-allowance was made by the Ld. AO solely by following the Tribunal judgment in the Appellant s own case for AY 1996-97 wherein the Tribunal had followed the judgment of the Third Member in the case of ABN AMRO Bank which is reported in 280 ITR (AT) 117 (Cal.) (97 ITD 89). (Copy of the Assessment Order dt. 3.12.2010 is attached as Annexure 2 to this Application.) 4.3 For AY 1996-97 in the assessee s case on this issue came up in appeal before the Income Tax Appellate Tribunal. The Hon'ble ITAT had followed the judgment of the Third Member Order in the case of ABN AMRO Bank which is reported in 280 ITR (AT 117 (Cal.). The Tribunal vide Order dt.24-10-2008 in ITA No.4988/Del/2003 held as follows:- 40. The learned Departmental Representative submitted that the assessee herein is a non-resident having a PE in India and hence its income is liable to tax as per provision of IT Act as also under Indo-UK DTAA. There is no dispute that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to this appeal. Thereafter the Third Member Judgement of ABN AMRO Bank was reversed 8 over-ruled by the Kolkotta High Court vide its judgment reported in 343 ITR 81. The Kolkatta High Court held that interest payment by branch office to head office is fully allowable as deduction. The court also held that such payment did not attract any with-holding tax as it was payment to self and therefore there was no obligation under Sec. 195 of the Act. Copy of the Kolkotta High Court Order was filed with the Tribunal at the time of the hearing of the appeal. 5. It is Most Respectfully submitted that the Kolkotta High Court Judgement in the case of ABN Amro Bank reversed the Third Member Judgement in the case of ABN Amro Bank, which was relied upon both by the Tribunal in the assessee's appeal for AY 1996-97, and also by the Assessing Officer in the Appellant's case for present year for dis-allowing the interest paid to head office. As the Kolkatta High Court reversed and over-ruled this judgment, hence it squarely covers the Appellants case. 6. In the Impugned Order under examination the Ld. ITAT has held as follows: We are also fully agreeable with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be in the fitness of things for the Tribunal to hear both paties and accordingly modify its order in exercise of its inherent power to do justice by the Tribunal. Because of this, perhaps the error occurred. 2. The ld. Counsel appearing for the assessee submits that judicial discipline was not followed by the ITAT for the reason that the direct decision in the case of ABN Amro Bank Vs. DDIT reported in 334 ITR 81 and the decision of the Special Bench of the Tribunal in the case of Sumitomo Banking Corporation Vs. DDIT [(2012) 16 ITR (Trib.) 116 (Mum.)(SB)] and the Third Member decision in the case of ABN Amro Bank Vs. DDIT (supra) in deciding whether interest paid to head office by the Indian branch of bank and other branches in India is chargeable to tax in India under section 195 of the Income Tax Act, 1961 (the Act). 3. The ld. DR referring to para 8.5 of the order of the Tribunal submitted that the Tribunal has taken a conscious decision and after interpreting the DTAA between India and UK, affirmed the view of the ld. CIT (Appeals) in coming to the conclusion that the interest paid by PE to head office on money lent by head office to PE shall not be allowed as ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appeal before the High Court, which as such was already filed by the Assessee before the High Court, which the Assessee withdrew after the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013. Therefore, as such, the order passed by the ITAT recalling its earlier order dated 06.09.2013 which has been passed in exercise of powers under Section 254(2) of the Act is beyond the scope and ambit of the powers of the Appellate Tribunal conferred under Section 254 (2) of the Act. Therefore, the order passed by the ITAT dated 18.11.2016 recalling its earlier order dated 06.09.2013 is unsustainable, which ought to have been set aside by the High Court. 5. From the impugned judgment and order passed by the High Court, it appears that the High Court has dismissed the writ petitions by observing that (i) the Revenue itself had in detail gone into merits of the case before the ITAT and the parties filed detailed submissions based on which the ITAT passed its order recalling its earlier order; (ii) the Revenue had not contended that the ITAT had become functus officio after delivering its original order and that if it had to relook/revisit the order, it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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