TMI Blog2023 (9) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... al evidences placed before CIT(A) goes to the root of the matter and would demonstrate the absence of obligation for deduction of withholding tax contemplated u/s 195 - HELD THAT:- In the present circumstances, evidences obtained from external sources which have a critical bearing on the outcome of the subject matter ought to have been admitted to reinforce the overriding cause of substantial justice vis-a-vis technical considerations. The breach of sacrosanct principles of natural justice is fundamental and goes to the root of process of framing assessment. Needless to say that the spirit of Rule 46A of IT Rules enabling the assessee to place additional evidences before the CIT(A) are founded on the doctrine of legitimate expectation an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Assessing Officer (AO) under Section 143(3) of the Income Tax Act, 1961 (the Act) concerning AY 2013-14. 2. The grounds of appeal raised by the assessee read as under: 1. That on the facts and circumstances of the case, the CIT(A) erred in law in upholding the assessment made by the assessing officer ( AO ) under section 143(3) of the Income-tax Act, 1961 ( the Act ) at an income of Rs. 1,59,62,193 as against loss of Rs. 1,79,51,014 returned by the Appellant. 2. That on the facts and circumstances of the case, the CIT(A) erred in law in allegedly holding that the documents furnished by the Appellant, viz., (1) Agreements entered into by the Appellant with the non-resident group companies, and (2) No Permanent Establis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant and taxability of income arising from such services in India. 3. Briefly stated, the assessee-company is stated to be engaged in the business of risk management, risk analysis, mitigation consultant and to provide solutions related to crisis management etc. The assessee filed return of income digitally declaring loss of Rs. 1,79,51,014/- for the Assessment Year 2013-14 in question. The return filed by the assessee was subjected to scrutiny assessment under Section 143(3) of the Act. In the course of assessment proceedings, the Assessing Officer inter alia observed that during the relevant assessment year, the assessee had inter alia made payment on account of intercompany fees, i.e., payment in consideration for outsourced risk ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer examined the provisions of the law and respective tax treaty and concluded that assessee has failed to deduct withholding tax under Section 195 on an aggregate sum of Rs. 3,39,13,207/- towards such expenses intercompany fee and commissions attributable to Non-Resident entities. 4. Aggrieved the assessee preferred appeal before the CIT(A). The CIT(A) confirmed the action of the Assessing Officer and refused to admit additional evidences filed by the assessee in the form of no PE certificate from certain entities, Tax Residency Certificate (TRC) etc. on the ground that no formal application has been moved under Rule 46A explaining the reasons why such evidences were not submitted in the course of assessment proceedings. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oints out that such remittances towards intercompany fees and commission to overseas group companies located outside India are not susceptible to withholding tax as per the scheme of the Act and when the provisions of the Act and the appropriate Articles of the DTAA are read in conjunction. The ld. counsel contends that the payments have been made to non resident entities who have no permanent establishment in India and the payment made do not confirm the requirement of make available condition under DTAA provisions. In continuance, the ld. counsel submits that the TRC and certificate showing presence of PE of non resident entities in India are vital for the determination of the obligation of the assessee under Section 195 of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have a critical bearing on the outcome of the subject matter ought to have been admitted to reinforce the overriding cause of substantial justice vis-a-vis technical considerations. The breach of sacrosanct principles of natural justice is fundamental and goes to the root of process of framing assessment. Needless to say that the spirit of Rule 46A of IT Rules enabling the assessee to place additional evidences before the CIT(A) are founded on the doctrine of legitimate expectation and principles of natural justice. It is indeed the sacrosanct obligation of the first appellate authority to have ensured that any effective opportunity is granted to the assessee for presenting its case and all evidences are taken into account while determining ..... X X X X Extracts X X X X X X X X Extracts X X X X
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