2017-TII-INSTANT-ALL-454
26 April 2017   
CASE LAWS

2017-TII-25-HC-DEL-TP

PR CIT Vs IQOR INDIA SERVICES PVT LTD: DELHI HIGH COURT (Dated: April 19, 2017)

Income tax - Associated Enterprise (AE) - extraordinary delay - e- filing - FAR analysis - high-end services - IT-enabled services.

The assessee is a subsidiary of Intellirisk Management Corporation (IRMC, US) providing IT enabled services (ITES) to its AE namely, IRMC US. It had various international transactions with its AE.  TPO rejected the TP study conducted by the assessee and conducted an independent search of comparable, based on the Functions, Assets and Risks (FAR) of the assessee. The TPO arrived at 25 comparable companies and provided the PLI of the comparables at 28.29%. On appeal, the CIT(A) partly rejected  objection of assessee. The assessee moved an appeal before the Tribunal, who directed the TPO to exclude one company from the final list of comparables. This application is filed by Revenue whereby condonation of an extraordinary delay of 505 days in re-filing the appeal is sought.

Having heard the parties, the High Court held that,

Whether  extraordinary delay of 505 days in re- filing the appeal can be condoned on the ground that there was a drastic increase in the court fee - NO : HC

Whether extraordinary delay in re-filing the appeal can be condoned on the ground that assessee was not familiar with the new e-filing facility when it is evident that e-filing came into force much before the filing of the said appeal - NO: HC

+ in the reasons for delay it was submitted that ".....Due to drastic increase in the court fees, the matters were placed under objections by the registry. It would be appreciated that, each CIT charge was therefore left with thousands of appeals for which the requisite funds had to be received from the Central Government and thereafter allocated by the CBDT. The amounts were extremely substantial and were not part of the allocated budget for the year. This has resulted in the present delay in re-filing the appeal due to unavoidable circumstances."

It was held that the reasons given cannot justify the extraordinary delay of 505 days in re-filing the appeal. As far as e-filing is concerned, the Registry of this court conducted orientation sessions to enable the lawyers to familiarize themselves with the e-filing processes. Scanning facilities were provided at the filing counters to assist lawyers and litigants. As far as increase in court fee is concerned, the change came into force on 1st August, 2012 much before the filing of the present appeal. Even change in counsel cannot explain why there would be a delay of 505 days in curing defects and re-filing the appeal.

Assessee's appeal dismissed

2017-TII-19-HC-MUM-INTL

DIT Vs WNS GLOBAL SERVICES UK LTD: BOMBAY HIGH COURT (Dated: April 19, 2017)

Income Tax - India-UK DTAA - Articles 5, 7 & 12(4)(b).

Keywords - Fee for included services - marketing & management fees - substantial question of law.

The assessee is WNS Global Services (UK) Ltd. This appeal raised by revenue, questioned the Tribunal's stand that marketing and management fees in India and the provision for marketing and management services outside India by the assessee does not qualify as 'Fees for Included Services' under Article 12(4)(b) of the Indo-UK DTAA. It was also contended that even if it is assumed that the aforesaid do not qualify as fees for included services under Article 12(4)(b) of the Indo-UK DTAA, the same would be liable to be taxed as business profits under Article 7 r/w Article 5 of the Indo-UK DTAA in view of the Force of Attraction Rule.

Having heard the parties, the High Court held that,

Whether an appeal concerning certain questions of law deserves to be dismissed if similar questions raised previously were held to be not 'substantial questions of law' by lower authorities and the reasons for such disposal still hold good - YES: HC

+ in assessee's own case, the Tribunal had passed an order whereby the question raised herein was not treated as substantial question of law and the Revenue's appeal was dismissed. The Court does not dispute this position, but only says that the earlier orders as also this order of the Court has been challenged in the Supreme Court of India and the proceedings are pending. The reasons that persuaded the earlier Division Bench not to admit the Revenue's appeal still hold good. Therefore, by applying them to the facts of this case, we dismiss the Revenue's appeal.

Revenue's appeal dismissed

 

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