Income Tax Appellate Tribunal - Hyderabad
Dr. Reddy'S Laboratories Ltd., Hyd, ... vs Adit, International Taxation-I, Hyd, ... on 24 March, 2021
IN THE INCOME TAX APPELLATE TRIBUNAL
HYDERABAD BENCHES "B": HYDERABAD
(THROUGH VIRTUAL CONFERENCE)
BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER
AND
SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER
ITA Nos. 827 & 828/H/2015
Assessment Year: 2011-12 & 2012-13
Dr. Reddy's Laboratories Vs. Asst. Director of
Ltd., Hyderabad. Income-tax,
PAN - AAACD 7999Q International Taxation -
1, Hyderabad.
(Appellants) (Respondent)
Assessee by: Shri S.P. Chidambaram
Revenue by: Shri YVST Sai
Date of hearing: 17/03/2021
Date of pronouncement: /03/2021
ORDER
PER BENCH:
These Assessee's appeals for AY 2011-12 and 2012-13 are directed against the CIT(A) - X, Hyderabad's separate orders, both dated 30/03/2015 passed in Case Nos. 0287 & 0288/CIT(A)-X/2014-15; respectively, involving proceedings u/s 201 & 201(1A) of the Income Tax Act, 1961 ; in short "the Act".
:- 2 -: ITA Nos. 827 & 828/Hyd/15 Dr. Reddy's Labo rato ries Ltd ., Hyd.
Heard both the parties. Case files perused.
2. The assessee has raised the following identical substantive grounds in both the appeals:
"1 . The learned Commissioner of IT (Appeals) erred in law and on facts and circumstances of the case in confirming the assessing officer's action in holding the appellant company as an assessee in default u/s.20I and in raising the tax demand there-under by applying the provisions of sec.206AA with sec.195 of the act.
2. The learned CIT(A) erred in not considering, adjudicating and dispensing with the appeal with regard to each of the grounds of appeal as raised before him but in confining himself to the issue of higher rate of tax as prescribed u/s.206AA act.
3. The learned CIT(A) erred in not passing a speaking order on each of the grounds of appeal as raised before him but basing on an order passed earlier by himself on a solitary ground.
4. The learned CIT (A) ought to have held that the assessing officer should have provided an adequate and reasonable opportunity to the assessee.
5. The learned CIT (A) erred in law in concluding that provisions of the section 206AA of the Act override the DT AAs and consequently tax rate applicable in terms of section 206 AA prevails over the tax rate prescribed in the relevant DTAAs.
6. The CIT(A) erred in ignoring the provisions of the Section 90(2) of the Act which clearly state that tax liability 'in India is required to be determined in :- 3 -: ITA Nos. 827 & 828/Hyd/15 Dr. Reddy's Labo rato ries Ltd ., Hyd.
accordance with the provisions of the Act or the DT AA between India and the relevant country, whichever is more beneficial to the assessee.
7. The CIT (A) erred in law in concluding that the provisions of section 206AA of the Act override the provisions of section 139A(8)(d) read with rule 114 C of the Act.
8. The Appellant craves the right to add/modify any grounds that may be prayed for, raised before and as may be allowed."
3. With the able assistance coming from both assessee as well as Revenue side, we notice during the course of hearing that this tribunal's earlier dated 28/02/2018 had restored the issue of application of Double Taxation Avoidance Agreement "DTAA" vis a vis domestic tax provisions contained in section 206AA of the Act back to the Assessing Officer as under:
"7. Having regard to the rival contentions and the material on record, we find that the A.O has followed the decision of the Bangalore Tribunal in the case of Bosch limited (cited supra) to hold that the provision of Sec. 206AA of the IT Act will prevail where non-residents do not have a PAN number. The Hon'ble Special Bench in the case of Nagarjuna Fertilizers and Chemicals limited (cited supra) has held that the treaty provisions which are beneficial to the non-residents prevail over the provisions of Sec. 206AA of the Act. Thus, it is clear that the decision of the Tribunal in the case of Bosch Ltd., (cited supra) has been set aside to the extent the transactions are covered under the respective DTAA and the provisions of DTAA are more beneficial to the non-residents. In view of the fact that the A.O has not examined the nature of the payments as :- 4 -: ITA Nos. 827 & 828/Hyd/15 Dr. Reddy's Labo rato ries Ltd ., Hyd.
to whether they are covered by the respective DTAA provisions or not, we deem it fit and proper to remand the issue to the file of the A.O only for verification as to whether these 15 transactions fall within the purview of DTAA provisions, and if they do so, then the assessee shall not be treated as an "assessee in default" u/s 201(1) of the IT Act to such an extent, and no interest u/s 201(1A) shall be leviable thereon."
4. The assessee thereafter filed its MA Nos. 64 & 65/Hyd/2018 before the Tribunal. Learned coordinate bench disposed of the same vide common order dt. 28/11/2018 as follows:-
2. The first mistake pointed out by the assessee is that there were 28 transactions as per the order u/s 201A of the Act which were to be considered u/s 206AA of the Act, whereas the Tribunal erroneously has mentioned the transactions as only 15. Therefore, the assessee prayed for a corrigendum to rectify the wording" 15 transactions" to "28 transactions".
3. We have gone through the above order and find the transactions involved are 28 and not 15. Therefore, we modify our order in Para 3 and 7 modifying the number of transactions from 15 to 28. The order is modified accordingly.
4. Further, the second mistake pointed out by the assessee is that it has raised grounds 2 and 3 which were not disposed of by the Tribunal and therefore, there is a mistake apparent from the record. We have gone through the order of the Tribunal and find that these grounds were not disposed of and accordingly we recall the order of the Tribunal for disposal of the grounds 2 and 3. The registry is directed to fix the appeal for hearing in due course."
:- 5 -: ITA Nos. 827 & 828/Hyd/15 Dr. Reddy's Labo rato ries Ltd ., Hyd.
5. It therefore emerges that the issue before us is regarding assessee's identical ground Nos. 2 & 3 in both these appeals only. We observe in this backdrop that since the coordinate bench of this tribunal has already restored the above issue; stated to be legal in nature back to the Assessing Officer for his factual verification , assessee's instant remaining twin ground Nos. 2 & 3 hereinabove must also follow the suit. We order accordingly. It is further made clear that the Assessing Officer shall make all factual verification(s) and decide all these issues together so as to avoid contrary findings.
6. Mr. Chidambaram hereby pointed out that these two grounds each pertain to the CIT(A)'s lower appellate order only. Be that as it may, we are of the opinion that the Assessing Officer's consequential rectification shall consider all these aspects as per law.
:- 6 -: ITA Nos. 827 & 828/Hyd/15 Dr. Reddy's Labo rato ries Ltd ., Hyd.
7. These two assessee's appeals are partly allowed for statistical purposes in above terms.
Pronounced in the open court on 24 th March, 2021.
Sd/- Sd/-
(L.P. SAHU) (S.S. GODARA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad, Dated: 24 th March, 2021.
Kv
copy to :
1 Dr. Reddy's Laboratories Ltd., 8-2-337, Road No. 3,
Banjara Hills, Hyderabad - 500 034
2 ADIT, International Taxation - I, IT Towers,
AC Guards, , Hyderabad
3 CIT(A) -X, Hyderabad
4 CIT (IT & TP), Hyderabad
5 ITAT, DR, Hyderabad.
6 Guard File.