Calcutta High Court
Maersk Line U.K. Ltd. & Anr vs The Deputy Director Of Income Tax on 2 December, 2015
Author: Arindam Sinha
Bench: Arindam Sinha
ORDER SHEET
W.P. No. 272 of 2009
With
W.P. No. 1295 of 2008
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
ORIGINAL SIDE
MAERSK LINE U.K. LTD. & ANR.
Versus
THE DEPUTY DIRECTOR OF INCOME TAX,
INTERNATIONAL TAXATION, KOL
BEFORE:
The Hon'ble JUSTICE ARINDAM SINHA
Date: 2nd December, 2015.
Appearance:
Mr. Porus Kaka, Sr. Adv.
Mr. Vipul Kundalia, Adv.
Mr. Manish Kanth, Adv.
Ms. Sonal Shah, Adv.
... for the petitioners
Mr. Udayan Chakraborty, Adv.
Ms. Mamta Bhargav, Adv.
... for the respondents
The Court: Mr. Chakraborty assisted by Ms. Mamta Bhargav, learned Advocates appearing on behalf of the Revenue and submitted on instructions that the notice under Section 148 issued to the partnership, under challenge in these writ petitions, were good notices and should not be interfered with. Mr. Chakraborty relied on Article 3 of the Convention between the Government of the Republic of India and the Government of the United Kingdom of Great Britain and Northern Ireland for the avoidance of double taxation, in particular paragraphs 1(e) and 1(f), to submit the noticee, being a partnership firm, was transparent to the fiscal laws of the UK. It cannot be said that the noticee had fiscal domicile there. The partners or one of them having fiscal domicile in UK could not be taken to mean that the partnership also had such domicile there. 2 He submitted, therefore the noticee was not a person under the convention to be able to resist the issuance of the notice to it.
Mr. Kaka, learned Senior Advocate appearing on behalf of the petitioners, submitted in reply that the argument of the Revenue stood negated by the decision in P & O Nedlloyd Ltd. & Ors. vs. The Assistant Director of Income tax (International Taxation); reported in (2014) 369 ITR 282(Cal). He submitted another better interpretation of Article 3 of the said convention was also possible. According to him, by application of the interpretation of paragraph 2 of the said Article, Indian Partnerships were brought within the meaning of the term "person" defined by the treaty, to be covered thereby who, in the event, did business in UK, would be able to resist demands of income tax under the treaty as having fiscal domicile in India. He added the interpretation of Article 3, paragraph 1(f), according to him, was that the partnerships per se were not persons and, therefore, could not have notice issued to them by the Revenue.
Hearing is concluded and judgment reserved.
(ARINDAM SINHA, J.) sg2