Income Tax Appellate Tribunal - Delhi
Technip Energies Italy S.P.A. , Noida vs Dcit, Circle-3(1)(1), Int. Taxation, ... on 14 October, 2022
Author: G.S. Pannu
Bench: G.S. Pannu
IN THE INCOME TAX APPELLATE TRIBUNAL,
DELHI BENCH: 'D' NEW DELHI
BEFORE SHRI G.S. PANNU, HON'BLE PRESIDENT
AND
SHRI SAKTIJIT DEY, JUDICIAL MEMBER
S.A. No.337/Del/2022
[Arising out of ITA No.2370/Del/2022]
Assessment Year: 2019-20
Technip Energies Italy S.P.A., Vs. DCIT,
A-4, Sector-1, Circle-3(1)(1), Intl. Taxation,
Noida New Delhi
PAN :AABCT2189H
(Applicant) (Respondent)
Applicant by Sh. Ajay Vohra, Sr. Advocate
Sh. Anshul Sachhar, Advocate
Sh. Prabhanu Sikaria, CA
Ms. Jasmin Kaur, CA
Respondent by Sh. Sanjay Kumar, Sr. DR
Date of hearing 14.10.2022
Date of pronouncement 14.10.2022
ORDER
PER SAKTIJIT DEY, JM:
Captioned application has been filed by the assessee seeking stay on recovery of outstanding demand of Rs.6,38,34,710/- pertaining to assessment year 2019-20.
2. Sh. Ajay Vohra, learned Senior Counsel appearing for the assessee submitted that the assessee was awarded a turn-key contract for modernization of refinery of Hindustan Petroleum S.A. No.337/Del/2022 AY: 2019-20 Corporation Ltd. (HPCL). He submitted, there is no disputed that the assessee has a Permanent Establishment (PE) in India. Drawing our attention to the draft assessment order, learned counsel submitted, though, the assessee furnished its books of account and audited financial statements before the Assessing Officer, however, the Assessing Officer erroneously observed that the assessee did not furnish the financial statement pertaining to the year under consideration.
3. Drawing our attention to the directions of learned DRP, learned counsel submitted, being convinced of the fact that the assessee had furnished its books of account and financial statements, learned DRP specifically directed the Assessing Officer to look into the account, documents and books of account furnished by the assessee and conclude the assessment. He submitted, in spite of such specific direction of learned DRP, the Assessing Officer merely repeated the observations made in the draft assessment order. He submitted, the Assessing Officer has applied the provisions of section 44BBB of the Act and taxed the entire receipts as appearing in Form 26AS. He submitted, the aforesaid approach of the Assessing Officer is unsustainable in law, as, section 44BBB is not at all applicable to the assessee, as,
2|Page S.A. No.337/Del/2022 AY: 2019-20 it is applicable to turn-key power projects approved by the Central Government. He submitted, on identical facts, the Assessing Officer has accepted assessee's claim in assessment year 2020-21 after verifying the books of accounts and financial statements.
4. Without prejudice, he submitted, an amount of Rs.27,50,00,000/- accrued to the assessee in subsequent year and has been offered to tax in that year. Therefore, to that extent, there is double taxation of the same amount. Thus, he submitted, since the assessee has strong prima facie case, the demand raised should be stayed and the appeal may be heard at an early date.
5. Learned Departmental Representative, opposing grant of absolute stay submitted, the assessee may be directed to pay 20% of the outstanding demand. However, he did not oppose the prayer for early hearing of the appeal.
6. We have considered rival submissions and perused the materials on record. We are conscious of the fact that at this stage we are not required to venture into the merits of the issues giving rise to the present demand, which have to be considered at the time of hearing of the corresponding appeal. However, on going through the material on record, it is observed that the assessee has offered to tax the profit derived from Fee for
3|Page S.A. No.337/Del/2022 AY: 2019-20 Technical Services (FTS) in India as the income attributable to the PE. However, the Assessing Officer has computed profit at 10% of the entire receipts of Rs.261.88 crores by taking recourse to the provisions contained under section 44BBB of the Act, though, it applies to receipts from supply, erection, testing, commissioning etc. of a turn-key power project and approved by the Central Government, whereas, the assessee is executing a turn-key refinery project. Further, while framing the draft assessment order, the Assessing Officer has observed that the assessee did not furnish any books of account or financial statements. Whereas, learned DRP, while dealing with assessee's objections against the draft assessment order, has clearly and categorically observed that the finding of the Assessing Officer with regard to non-furnishing of documents is at variance with the facts appearing on record. Accordingly, learned DRP directed the Assessing Officer to take into account of documents furnished by the assessee and decide the issue. However, in the final assessment order, the Assessing Officer has completely ignored the aforesaid direction of learned DRP. The aforesaid factual position clearly makes out a strong prima face case and balance of convenience in favour of the assessee.
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7. In view of the aforesaid, we are inclined to grant stay on recovery of the outstanding demand for a period of 180 days from the date of this order or till the disposal of corresponding appeal of the assessee, whichever is earlier.
8. Further, accepting assessee's prayer for early hearing of the appeal, we direct the Registry to fix the corresponding appeal for hearing on 30.11.2022, a date consented by both the parties. Paper-books, if any, must be filed by the parties sufficiently ahead of the date of hearing of the appeal. Since, the date of hearing of appeal was announced in the open court in presence of both the parties, there is no need for issuance of separate notice of hearing to the parties. Further, we make it clear, in case, the assessee seeks any adjournment without compelling reasons, it will run the risk of vacation of stay.
9. In the result, the stay application is allowed, as indicated above.
Order pronounced in the open court on 14th October, 2022 Sd/- Sd/-
(G.S. PANNU) (SAKTIJIT DEY)
PRESIDENT JUDICIAL MEMBER
Dated: 14th October, 2022.
RK/-
Copy forwarded to:
1. Appellant
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S.A. No.337/Del/2022
AY: 2019-20
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
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