Income Tax Appellate Tribunal - Panji
Nivedita Fernandes., Margao vs Assessee on 19 January, 2015
IN THE INCOME TAX APPELLATE TRIBUNAL,PANAJI BENCH, PANAJI
[Before Shri P. K. Bansal, AM & Shri D.T Garasia, JM]
I.T.A Nos. 373 to 374/PNJ/2014 A.Ys. 2012-13 to & '13-14
Mrs. Nivedita Fernandes Vs. I.T.O, International Taxation,
PAN: AAHPF 4105C Margao
(Appellant/Assessee) (Respondent)
I.T.A No. 375/PNJ/2014 A.Y 2012-13
Mr. Brian Cosme Fernandes Vs. I.T.O, International Taxation,
PAN: AAGPF 5536Q Margao
(Appellant/Assessee) (Respondent)
For the appellant/assesee: Shri Devendra A. Bale, CA, ld.AR
For the respondent/department: Shri R. Durai Pandian, ld.DR
Date of hearing: 19-01-2015
Date of pronouncement: 19-01-2015
ORDER
Per Shri D.T Garasia, JM:
These appeals have been filed by both the assessees against the respective order of the ld. CIT(A), Bangalore dated 25th March 2014 for the assessment years 2012-13 and 2013-14 respectively.
2. The above appeals pertain to common issues , therefore, these are disposed of by this common order for the sake of convenience.
3. The following common grounds are raised by the respective assessee in ITA Nos. 373 to 375/PNJ/2014 for the assessment years 2012-13 and 2013-14:-
1. The learned CIT(A) erred in dismissing the appeal for want of evidence.
2. Tour appellant prays that the passports of the Portugese Lawyers be taken on record as evidence.
3. Your appellant prays that the order of CIT(A) dated 25/08/2014 be set aside and the order of ITO(Int. Tax) dated10/02/2014 be quashed.2 ITA Nos.373-375/PN?-14-JM
Mrs. Nivedita Fernandes & Mr. Brian Cosme Fernandes
4. Your appellant craves leave to amend, alter or add any ground during the hearing.
4. The Common short facts of the case are that the assessee is a proprietor of M/s. Goan Support India/M/s. Excellency Services engaged in the activities of collecting the documents like marriage certificates, birth certificates, death certificates, passport copies etc. from the clients in India and sending it to Lawyers in Portugal (hereinafter referred to as Protugese Beneficiaries) in connection with Portugese Nationality work undertaken by the Portugese Beneficiaries, who provide legal consultancy services in connection with the said Portugese Nationality work and correspond with Portugese Authorities in Portugal in this regard. The assessee collects and remits the fixed charges for different services from the clients in India as per the bills raised by the Portugese Beneficiaries. These monies are being transferred from the Axis (UTI) Bank Ltd., current account No.909020038739826/911020021329794 of M/s. Goan Support India//M/s. Excellency Services to Portugese beneficiaries on demand.
5. Thereafter, the AO held that the entire sum remitted abroad fell within the purview of section 5(2) of the I.T Act, and the assessee was liable to withhold tax under the provisions of section 195 of the Act. He also examined Article 14 of the relevant DTAA and concluded that the same was not beneficial to the assessee.
6. Matter carried to ld. CIT(A) and CIT(A) has disposed of the appeals by his common order by observing as under:- Para 5 "5. Before me, the assessee‟s representative were unable to produce the passports of the recipients. Thereby, the fact regarding period of stay in India remains unestablished vis-à-vis conditions laid down in the Treaty. Thus, I have no option but to confirm the action of the A.O for want of evidence. It is ordered accordingly.
7. Both the assessee are in appeal against the decision of the ld.CIT(A).
8. During the course of hearing before us the ld.AR submitted the written submissions, which reads as under:-
1. The facts and the point of law involved in the present appeal is fully covered by the decision of Hon'ble Tribunal, Panaji Bench in the case of Cedrik Jordan da Silva V/s Income Tax Officer in ITA no.61/PNJ/2012 dated 08/08/2013 (copy of order attached).3 ITA Nos.373-375/PN?-14-JM
Mrs. Nivedita Fernandes & Mr. Brian Cosme Fernandes
2. Your appellant has paid fees to Portugese Lawyers towards their legal services rendered at Portugal.
3. Your appellant claimed that the fees paid to „lawyers‟ are covered under article 14 of DTAA with the Government of Portugese Republic (copy attached), and hence does not attract the provisions of withholding of tax under Income Tax Act, 1961.
4. The learned I.T.O rejected the claim of your appellant and held your appellant liable for withholding of tax u/s195 of Income Tax Act, 1961.
5. The learned CIT(A) accepted the contention of your appellant, relying on the decision of Hon'ble Tribunal, Panaji Bench in the case of Cedrik Jordan da Silva V/s. I.T.O in ITA no.61/PNJ/2012 dated 08/08/2013, but dismissed the appeal for non production of passports of the Portugese Lawyers, holding at para 5"Before me, the asessee‟s representative were unable to produce the passport of the recipients. Thereby, the fact regarding period of stay in India remains unestablished vis-à-vis conditions laid down in the Treaty. Thus, I have no option but to confirm the action of the AO for want of evidence."
6. The passports of the recipients were not in the possession of the appellant and hence the same could not be produced at the time of hearing.
7. Your appellant has filed passports of the recipients along with a prayer under rule 29 of Appellate Tribunal Rules 1963 praying for production of passports of recipients as additional evidence.
8. A scrutiny of the passports clearly indicates that the advocates were not in India for more than 183 days as depicted below:
ASS YR NAME OF ADVOCATE NO OF DAYS STAY PERIOD
2012-13 Dr. Vasco Adolfo Faria 9 16/01/2012 to
Esteves 24/01/2012
2012-13 Minguel Reis 23 04/11/2011 to
26/11/2011
2013-14 0 0
9. Your appellant submits that as the period of stay of portugese lawyers in India is less than 183 days, it is not hit by the exception of article 14(b) of DTAA with the Government of the Portugese Republic.
10. The Hon'ble Tribunal on the same facts and point of law has held in the case of Cedrick Jorda da Silva V/s. Income Tax Officer in ITA no.61/PNJ/2012 dated 08/08/2013 as follows:
Para 2.2 last part: "... but due to the DTAA between India and Portugal if the income is not chargeable to tax, we are of the firm view that the DTAA will prevail and the income will not be chargeable to tax in India. Since the income is not chargeable to tax in India, the Assessee was not under an obligation to deduct the TDS. We, accordingly, set aside the order of CIT(A) and quash the order passed u/s201(1) and 201(1A) of the Income Tax Act."
11. Your appellant prays that the order of CIT(A) dated 25/08/2014 be set aside and the order of ITO(Int.Tax) dated 10/02/2014 be quashed.
9. The ld.DR has relied on the orders of the tax authorities.
4 ITA Nos.373-375/PN?-14-JMMrs. Nivedita Fernandes & Mr. Brian Cosme Fernandes
10. We have heard the rival contentions of both the parties. We find that the AO and ld.CIT(A) held that the assessee is liable for withholding of tax u/s195 of the I.T Act 1961. The ld.CIT(A) has accepted the decision in the case of Cedrick Jordan da Silva Vs.ITO in ITA No.61/PNJ/2012 dated 08.08.2013. The assessee could not produce the passports of Portugese Lawyers. The assessee was unable to produce the same before us also. The passports clarify that the advocates were not in India for more than 183 days. The assessee has to prove this fact. The ld.AR submitted that as per DTAA with the Government of Portugese Republic article 14(b) if the portugese lawyers stay in India is less than 183 days. However, the assessee wanted to produce these passports before the AO to prove the claim of the assessee. Therefore, in the interest of natural justice and fair play, we restore this issue to the file of the AO. The AO is directed to verify the Portuguese Passports of the lawyers as required article 14(b) of DTAA with Government of Portugese Republic. The AO is directed to decide the matter afresh after giving due opportunity of hearing to the assessee.
11. In the result, appeals of the both the assessee are allowed for statistical purpose.
Order is pronounced in the open court on 19-01-2015 Sd/- Sd/-
(P. K. Bansal ) (D.T Garasia)
Accountant Member Judicial Member
Dated : 19-01-2015
**PRADIP(Sr.P.S.)
Copy of the order forwarded to:
1. Appellant -
2 Respondent -
3. The CIT(A) concerned
4. The CIT concerned
5. The D.R 6. Guard File
True Copy, By order,
Asstt. Registrar.