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TMI Blog2025 (1) TMI 1500X X X X Extracts X X X X X X X X Extracts X X X X ..... t petitioner, it had at the time of furnishing its Return of Income [ROI] for the concerned Assessment Year [AY], namely, 2014-15 incorrectly proceeded on the assumption that since the aforesaid remittance was liable to be subjected to tax and no tax thereon had in fact been deducted, it would be liable to be disallowed by virtue of the provisions of Section 40 (a) (i) of the Act. Proceeding on that premise, the petitioner had thus suo moto disallowed the same and added the remittance back in its computation of income. 3. Subsequently, and on what the petitioner describes as that mistake coming to light, it was found that the remittance would in fact not be liable to tax at all in light of the provisions made in Article 12 of the India-Australia Double Taxation Avoidance Agreement [DTAA]. The contention appears to have been that since the payment made was in respect of services of a technical nature, namely, in the shape of reimbursement of expenses incurred in connection with the work discharged by seconded employees, it would clearly not satisfy the "make available" stipulation which appears in Article 12. Article 12 of the DTAA is extracted hereinbelow: "ARTICLE 12 ROYALTIES ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection with radio broadcasting; (f) total or partial forbearance in respect of the use or supply of any property or right referred to in sub-paragraphs (a) to (e); (g) the rendering of any services (including those of technical or other personnel), which make available technical knowledge, experience, skill, know-how or processes or consist of the development and transfer of a technical plan or design; but that term does not include payments or credits relating to services mentioned in sub-paragraphs (d) and (g) that are made; (h) for services that are ancillary and subsidiary, and inextricably and essentially linked, to a sale of property; (i) for services that are ancillary and subsidiary to the rental of ships, aircraft, containers or other equipment used in connection with the operation of ships or aircraft in international traffic; (j) for teaching in or by an educational institution; (k) for services for the personal use of the individual or individuals making the payments or credits; or (l) to an employee of the person making the payments or credits or to any individual or firm of individuals (other than a company) for professional services as defined in Articl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 195 envisages an inquiry being undertaken consequent to a remitter taking the position that the sum paid is not chargeable to tax under the Act. Viewed in that light and undisputedly, therefore, Section 195 stands on a pedestal distinct and distinguishable from the other provisions pertaining to deduction of tax at source as found in Chapter XVII of the Act. 5. Basis the aforesaid, the Principal Commissioner proceeded to record the following conclusions: "The contention of assessee has been duly considered. In my view, since payment on account of reimbursement was part and parcel in the nature of service which is technical in character or having been made available to the assessee company it would attract provisions of section 195 of Income Tax Act. The amount paid to its parent company embedded an element of income and therefore tax was required to be deducted at source. The assessee has also failed to furnish any exemption certificate u/s 195 of the Income Tax Act from the concerned TDS officer. Moreover, in its submission too, the assessee has failed to point out any manifest error in the assessment order. In the subsequent assessment years too similar addition h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by assessees. It would even cover situations where the assessee because of an error has not put forth a legitimate claim at the time of filing the return and the error is subsequently discovered and is raised for the first time in an application under section 264. 36. An assessee is liable to tax only upon such receipt as can be included in his total income and is assessable under the Income-tax Act. There is nothing in section 264, which places any restriction on the Commissioner's revisional power to give relief to the assessee in a case where the assessee detracts mistakes because of which he was over-assessed after the assessment was completed. Once it is found that there was a mistake in making an assessment, the Commissioner had power to correct it under section 264 (1). When the substantive law confers a benefit on the assessee under a statute, it cannot be taken away by the adjudicatory authority on mere technicalities. It is settled proposition of law that no tax can be levied or recovered without authority of law. Article 265 of the Constitution of India and section 114 of the State Constitution imposes an embargo on imposition and collection of tax if the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r conferred on the Commissioner is coupled with the duty to exercise the same "in the interest of doing real justice between the parties." 21. As observed above, it is clear that the amount of Rs. 1,51,67,868 cannot be taxed twice. In the aforesaid view, it was apposite for the Commissioner to have revised the assessment order for the assessment year 2014-15 in the light of the reassessment order dated December 8, 2017, whereby the amount of Rs. 1,51,67,868 was brought to tax in an earlier assessment year (assessment year 2012-13)." 10. As is manifest from the exposition of the legal position and the scope of the power which the Commissioner could have exercised under Section 264 in the two judgments noticed above, it was clearly not imperative for the petitioner to have amended its RoI. As was pertinently observed both in Vijay Gupta and Interglobe Enterprises, an assessee could be taxed only in respect of such part of its total income as was exigible under the Act. The judgments noted above further hold that an assessee could invoke the power conferred by Section 264 in order to rectify a mistaken stand taken earlier and where it may have offered income to tax even though the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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