INCOME TAX ACT, 1961

Section 254

Appeal (Tribunal) - Rectification under section 254 - PE in India or not - Period of stay was not factually verified by AO or DRP

Assessee sought for rectification under section 254 stating that while deciding ground raised by the assessee relating to existence of Permanent Establishment (PE) in India, Tribunal following its decision in assessee's own case for the assessment year 2012-13 has restored the issue to AO to verify assessee's claim that the employees of the assessee have rendered service in India for a period less than 90 days. Assessee had furnished the details of employees/personnel who have rendered services in India during the previous year and the number of days for which they have rendered services in India is 42 days, hence, less than 90 days. Therefore, as per Article 5(2)(k)(i) of the India-U.K. Tax Treaty, there was no PE in India. Thus, it was submitted that instead of restoring the issue, Tribunal should have decided the issue finally by allowing assessee's claim. Held: Neither AO nor DRP have given any factual finding on assessee's claim that during the previous year relevant to the assessment year under dispute, employees/personnel of assessee were in India for only 42 days and not more than 90 days. Finding that assessee's claim regarding stay of its employees/personnel in India for rendering services for an aggregate period of 42 days was not factually verified either by AO or by DRP, Tribunal while allowing the ground raised by the assessee had issued a direction to AO to factually verify assessee's claim regarding stay of its employees/personnel in India for an aggregate period of 42 days. There could not be any mistake in the direction of the Tribunal as assessee's claim, though, was made before the revenue authorities, however, neither AO nor DRP had recorded any factual finding regarding the aforesaid claim of assessee. No mistake, much less, a mistake apparent on the face of record as envisaged under section 254(2).

Relied:Linklaters LLP v. Dy. CIT (2019) 111 taxmann.com 198 (Mum) Linklaters LLP v. Dy. CIT (International Taxation) [MA No. 238 (Mum.) of 2019, dt. 12-3-2018] : 2018 TaxPub(DT) 6663 (Mum-Trib)

REFERRED :

FAVOUR : Against the assessee

A.Y. :

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