TMI Blog1991 (2) TMI 168X X X X Extracts X X X X X X X X Extracts X X X X ..... ss receipts from freight and carriage. The ITOs had assessed their taxable incomes at 7.5 per cent of the gross-receipts and determined the amounts payable as tax thereon by passing orders under section 172(4). The assessed tax was duly paid, in excess too in some cases. DTA relief, which all the ships were entitled to under the relevant condition of the agreements for avoidance of double taxation between India and their countries, had been allowed in the case of German ship, viz., M.V. Aegis, only. Rest of the non-resident claimed such reliefs after the passing of the orders under section 172(4) but, admittedly, before the expiry of the assessment years relevant to the previous years in which the dates of departure of their ships from Indian ports fell. The ITO granted such reliefs to them by passing orders under section 154/155 of the Act. In all the cases there had been one transaction each of carriage or shipment during the relevant previous year. 3. After a lapse of two to four years of the grant of DTA reliefs to the appellants the succeeding ITO issued notice to them notifying his intention to withdraw the DTA reliefs by actions under section 154 on the ground that as per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... convinced that twice the income-tax authorities have failed the appellants in their just claims but, in the facts and circumstances of these cases, we should fail them not. 7. Section 154 is a general provision enabling the income-tax authorities to amend any order passed by them under the provisions of the Act. Such powers may be exercised by them either suo moto or on application by the assessee within four years from the date of the order sought to be amended (as the law stood at the relevant time). But amendment of the relevant order may be made only with a view to rectify any mistake apparent from record. A mistake apparent on record, as held by the Supreme Court in the case of T.S. Balaram, ITO v. Volkart Bros. [1971] 82 ITR 50 (SC) must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on the points on which there may be conceivably two opinions. A decision on a debatable point of law would not be a mistake apparent from record. 8. Section 172 makes provisions for levy and recovery of tax on profits of nonresidents from occasional shipping business in India. This section provides for a summary procedure for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is view of ours stands supported by the ratio of the decisions in the cases of CIT v. Rajnagar Tea Co. Ltd. [1973] 87 ITR 669 (Cal.), National Rayon Corp. Ltd. v. G.R. Bahmani, ITO [1965] 56 ITR 114 (Bom.), Nilgiris Potatoe Growers Co-operative Marketing Society Ltd. v. CIT [1978] 111 ITR 375 (Mad.). 11. Sub-section (7) of section 172 expands and enlarges rather than limits or restricts the rights of the non-resident for claiming assessment of his total income during the assessment year involved and determination of the tax payable thereon after taking into consideration for adjustment the tax paid by him in consequence of order(s) passed under section 172(4). This sub-section provides that : " 172(7). Nothing in this section shall be deemed to prevent the owner or charterer of a ship from claiming before the expiry of the assessment year relevant to the previous year in which the date of departure of the ship from the Indian port falls, that an assessment be made of his total income of the previous year and the tax payable on the basis thereof be determined in accordance with the other provisions of this Act, and if he so claims, any payment made under this section in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e made. Art. VI of the relevant DTA Agreement provides as under : DTA Agreement with Germany " Article VI -- (1) Where an enterprise of one of the territories derives profits through shipping operations the tax leviable on such profits in the other territory shall be reduced by an amount equal to fifty per cent, thereof. (2) Paragraph (1) shall not apply to profits arising as a result of coastal traffic ; the term ' coastal traffic ' means traffic which originates and terminates in the territorial waters of the same territory. (3) This article shall not, in the case of India, affect the provisions of sections 44A and 44B of the Indian Income-tax Act, 1922, relating to the assessment of profits from occasional shipping or tramp steamers. When an adjustment is to be made under section 44C of the Indian Income-tax Act, 1922, in the case of occasional shipping or tramp steamers, the provisions of paragraph (1) will apply." DTA Agreement with Greece " Article VI -- (1) When a resident of Greece, operating ships, derives profits from India through such operations carried on in India, such profits may be taxed in Greece as well as in India ; but the tax so charged in Indi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 154 on 13-2-1986. Without considering appellants' contentions raised in reply dated 24-2-1986 and which were to the effect that the last date for claiming refund had already expired on 31-3-1984, the refund received had already been disbursed to the owner or charterer of the ship and that the return filed under section 172(3)/(4) be either treated as filed under section 172(7) or extension of time to rile one be given, the ITO withdrew the DTA relief by his order dated 19-3-1986 passed under section 154 of the Act. Not only that no mistake apparent from record existed in the order under section 172(4) dated 7-5-1983 but also that the order withdrawing the relief was passed after a lapse of about three years of the order under section 172(4) having become final. On the face of it, ITO's order under section 154 is bad in law and on facts and hence not sustainable. 16. In the cases of the Greek ships MV Belstar, DTA relief had been given on 14-12-1984 by an order under section 154/155. The same was withdrawn on 14-3-1986. Similarly such relief had been given on 11-1-1984 in the cases of MV Heroas and MV Suerte and on 21-12-1984 but the same was withdrawn on 28-12-1986 by similar a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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