9911796707
TMI Blog2023 (7) TMI 805X X X X Extracts X X X X X X X X Extracts X X X X ..... elected for scrutiny assessment and an assessment order was passed on 18.12.2019 under section 143(3). It is a very brief assessment order, therefore, we deem it appropriate to take note of the complete order, which reads as under:- 4. The ld. Commissioner perused the record and order of the ld. Assessing Officer, thereafter formed an opinion that the assessment order is erroneous as much as it caused a prejudice to the interest of the revenue. Hence, it required revision by exercising the powers under section 263. Accordingly ld. Commissioner has issued a notice dated 11.01.2022, copy of this notice has been placed on page no. 271 of the paper book. It reads as under:- 5. The assessee filed written submission, which has been reproduced by the ld. CIT and thereafter ld. CIT passed the impugned order on 30.03.2022. 6. Brief facts giving rise to this proceeding are that the assessee entered into an agreement with Brahmaputra Cracker and Polymer Limited (BCPL) on 18.03.2009, vide which licence for manufacture of linear polyethylene in Assam and its sale across the world. Under this agreement, the assessee granted licence and the necessary knowhow including design, procurement, cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w-cause notice, the assessee has filed submission dated 15.11.2019 and the copy of this submission is placed on pages no. 4 to 8 of the paper book. He further submitted that the ld. Assessing Officer has again issued notices under section 142(1) on 19.11.2019 and 02.12.2019. These two notices were also replied by the assessee. The stand of the assessee was that the receipt was in the nature of supervisory services under this head. The assessee has not made available the technical knowledge, experience, skill, knowhow or processes. Therefore, under Article 13 of India-UK Treaty, the fees received for providing such services, where technology was not made available that would not fall within the concept of FTS, i.e. fees for Technical Services. The assessee has filed a note, which is available on pages no. 5 to 7 of the paper book. It relied upon the judgment of ITAT, Mumbai in the case of Raymond Limited -vs.- DCIT (86 ITD 791) and the decision of the Hon'ble Karnataka High Court in the case of CIT -vs.- De Beers India Minerals (P) Limited (2012) 21 taxmann.com 214. Though the ld. Assessing Officer has not made any discussion in the assessment order but it is to be construed that he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income Tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) "record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to pass a fresh order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. The ITAT in the case of Mrs. Khatiza S. Oomerbhoy Vs. ITO, Mumbai, 101 TTJ 1095, analyzed in detail various authoritative pronouncements including the decision of Hon'ble Supreme Court in the case of Malabar Industries 243 ITR 83 and has propounded the following broader principle to judge the action of CIT taken under section 263. (i) The CIT must record satisfaction that the order of the AO is erroneous and prejudicial to the interest of the Revenue. Both the conditions must be fulfilled. (ii) Sec. 263 cannot be invoked to correct each and every type of mistake or error committed by the AO and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remises in accordance with Clause 7.2.1; (iii) mechanical installation check and pre-commissioning safety audit of the Plant referred to in Clause 7.2.2.1; (iv) assistance with pre-commissioning and commissioning of the Plant referred to in Clause 7.2.2.2; (iv) attendance at and assistance with carrying out PGTRs and transition Tests at the Plant in accordance with Clause 7.2.2.3 and Clause 8. 7.1. In consideration of the fee paid by Licensee under Clause 3.4.1, the Licensor shall provide to Licensee the following Mandatory Services: 7.1.1. Licensee shall provide to Licensor five (5) copies and one (1) editable electronic copy in English of each document listed in the Eighth Schedule and Licensor shall, at no additional cost to Licensee, promptly review Licensee's documents for compliance with the BDEP, return comments (if any) to Licensee within fifteen (15) working days of receipt of such "documents by Licensor. Notwithstanding this review, Licensee shall remain exclusively responsible for the design of the Plant and for ensuring that the design conforms to the BDEP; 7.1.2. Upon dispatch by the Licensor of its written comments on the Licensee P&ID's as defined in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttendance at the equipment vendors' premises in accordance with clause 7.2 and so on. During the course of hearing, we put a question to the ld. Counsel for the assessee, whether this service is an independent service as a stand-alone. We also enquired how this service alone can be performed by the assessee without entering into this complete agreement. The reply of the ld. Counsel for the assessee was in negative. Therefore, these clauses if read into clauses starting from the Article 3, then, would reveal that it is a fee for one part from the composite contract and it cannot be segregated. This service was not being provided on a item which can be consider as stand alone item even without availability of this agreement. 14. As far as the first-fold of submission of the ld. Counsel for the assessee is concerned, that ld. Assessing Officer has perused the submission of the assessee particularly the note dated 15.11.2019 available on pages no. 4 to 7 of the paper book is concerned, we are of the view that the assessee had made a fatuous attempt to goad the adjudicating authority in a field, where facts are not available. The judgments of ITAT, Mumbai in the case of Raymond Limited ..... X X X X Extracts X X X X X X X X Extracts X X X X
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