In the facts of the present case also, it may be that if the Assessing Officer had made some efforts and examined the record of the previous assessment year, he may have come to know that this was a search and could have taken consequent action thereon. However, that by itself would not absolve the petitioner from the duty to disclose all primary facts before the Assessing Officer.
It to be settled position of law that right of appeal is neither an absolute nor an ingredient of natural justice, the principle of which must be followed in judicial and quasi-judicial adjudication. The right to appeal is a statutory right and it can be circumscribed by the condition in the grant. If a statute gives right to appeal upon certain conditions it is upon fulfilment of those conditions that the right becomes vested in and exercisable by the appellant.
It is observed that the amount in question payable by BAH India to the USA entity was not paid during the year under consideration and there is no dispute about the same. The said amount payable to the USA entity has been brought to tax in India in its hands by the Revenue authorities as fees for technical services. As per the relevant provisions of the Double Taxation Avoidance Treaty between India and the USA
Tribunal in the penalty proceedings has by its order, independent of the findings in quantum proceedings, has reached a conclusion that various incriminating documents found during search established that the appellant’s were manipulating its accounts so as to reduce its profits. Consequently, penalty under section 271(1)(c) is imposable and has been rightly imposed by the authorities under the Act.
It is seen from the facts that the assessee does not claim its expenditure as replacement of whole machinery or repairing of machinery as such. The assessee contended that such expenditure incurred in replacing the rolls has not in any manner increased the production capacity. On the other hand, it maintained the production capacity, as such, the rolls used removed the friction between the two machines in its process.
The Revenue which is in Appeal before the Court, is aggrieved by the order of the ITAT dated 13.03.2009 in ITA-2280/Del/2005. It urges the following substantial question of law for determination by this Court
We have heard rival submissions and have gone through the entire material available on record. Learned DR contends that ITAT in respect of above years while upholding the deletion of penalty u/s 271-D, has not considered the aspect of each transactions while ascertaining reasonable cause. In our view it is not so in as much as ITAT has consciously considered this aspect at more than one places and has held that AO though agreed that assessee has reasonable cause in mobilizing these deposits in rural and semi-urban areas, was not justified in levying penalty by holding that transactions based reasonable cause has not been spelt out.
This Court has heard the counsel for the parties. Learned counsel for the assessee argued that having regard to the facts, the ultimate disallowance was on account of Section 170(1) which was not even reflected in the orders of the lower authorities, nor adverted to by the orders of the lower authorities as well as the Tribunal in either round of litigation, i.e. quantum and penalty. Such being the case, the upholding of the quantum proceedings by the Court could not have been the only basis for the imposing of the penalty.
Dresser Rand Company, USA was covered by Indo-US DTAA and as per Article 12(4) of the said Treaty, technical and consultancy services were not taxable in India and there was no obligation to deduct tax at source for the payment and such technical and consultancy services.
‘Force of attraction rule’ as explained in Article 7(3) of India-UK DTAA – Where a permanent establishment takes an active part in negotiation, concluding or fulfilling contracts entered into by the enterprise, then, notwithstanding that other parts of the enterprise have also participated in those transactions, that proportion of profits of the enterprise arising out of these contracts
