Point of Law : Income Tax- Permanent establishment – Pending Appeal is a Revenue Appeal, the first proviso of Section 3 of the DTVSV Act would become applicable and, accordingly, the amount payable by the Petitioner would be 50% of the amount, viz., 50% of the disputed tax.

JUDGMENT :

ABHAY AHUJA, J.

1. By this Petition filed under Article 226 of the Constitution of India, 1950, Petitioner is challenging the validity of Form-3, dated 28th January, 2021 and 26th March, 2021 issued under Section 5 of the Direct Tax Vivad Se Vishwas Scheme, 2020 (the “DTVSV Act”) by the Designated Authority for Assessment Year 2002-2003.

2. Petitioner is a bank established in the Netherlands and it is a part of the Rabobank Group worldwide. It is submitted that Petitioner is a regular assessee under the Income Tax Act, 1961 (the “IT Act”).

3. Petitioner had filed a Return of Income on 31st March, 2003 declaring nil income. The Assessment Order was passed on 28th March, 2005 assessing business profits attributable to permanent establishment (PE) at Rs.31,25,060/-. Being aggrieved by the said order, an appeal was filed before the Commissioner of Income Tax (Appeals) [“CIT(A)”] on 28th April, 2005. The CIT(A), by its order dated 15th May, 2006 deleted the addition, holding that Petitioner does not have a PE in India. Thereafter, the assessing officer filed Appeal before the Tribunal on 11th August, 2006. The Tribunal, by its order dated 1st April, 2015, restored the issue to the file of the assessing officer. Against the said order, Petitioner filed an Appeal before this Court on 23rd September, 2015 under Section 260A of the IT Act. Petitioner also filed Miscellaneous Application before the Tribunal, which came to be rejected by an order dated 21st August, 2018. Thereafter, on 29th August, 2018, this Court in Income Tax Appeal No.1198 of 2015 with Income Tax Appeal No.260 of 2016 with Income Tax Appeal No.264 of 2016 passed an order setting aside both the orders of the Tribunal, viz., the order dated 1st April, 2015 restoring the issue to thefile of the assessing officer as well as the order dated 21st August, 2018 dismissing the Miscellaneous Application filed by Petitioner. The High Court directed the Tribunal to decide the matter afresh. The following paragraphs of the order of this Court are relevant and are quoted as under :-

“26 In the backdrop of all this, and further facts noted, a cryptic order has been passed by the Tribunal. In fact, in paragraph 5 of the order under challenge in reference to the Income Tax Appeal No. 4632/MUM/2006 for Assessment Year 2002-2003, the Tribunal says that the Indian company had made payment to the Assessee for providing the advisory services to it and under the Head “Guarantee Commission” and that the Indian company was paying the Assesee more than 30% of its income. That the basic issues are, as to whether the Assesee had permanent establishment in India or not and as to whether the services rendered by the Indian company could be treated as the activities carried out by the Assessee. Yet, it says that there is nothing on record to prove that the provisions of Article 5(1) of the Agreement are applicable. That stipulates that the permanent establishment for the purpose of convention meant a fixed business through which the business of the enterprise was wholly or partly carried on. The conclusion is that the Assessee was not having fixed place of business in India. Hence, the First Appellate Authority rightly held that the provisions of Article 5 (1) were inapplicable. It is in these circumstances we are surprised that the Tribunal still deems it ft and proper to remand the case. If there was indeed no material on record, then, the above conclusion was impossible to be reached.

27 Be that as it may, we do not wish to express any opinion on the rival contentions for it may prejudice both sides. In fact, resorting to such shortcuts, results in wastage of precious judicial time of the Tribunal as also Higher courts and delaying the collection and recovery of Revenue, if any. It only enables the parties to postpone the inevitable. It also results in uncertainty and chaos. Judicial decisions have to be consistent and all the more there should be no confusion. There ought to be some