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COURT:
CORAM: , ,
SECTION(S): ,
GENRE: ,
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COUNSEL: , , , ,
DATE: February 13, 2017 (Date of pronouncement)
DATE: February 22, 2017 (Date of publication)
AY: 2011-12
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CITATION:
S. 206AA does not have an overriding effect over the other provisions of the Act. By virtue of s. 90(2), the provisions of the Treaty override s. 206AA to the extent they are beneficial to the assessee. Consequently, the payer cannot be held liable to deduct tax at higher of the rates prescribed in s. 206AA in case of payments made to non-resident persons in spite of their failure to furnish the PAN

In view of the above discussion, we are of the view that the provisions of section 206AA of the Act will not have a overriding effect for all other provisions of the Act and the provisions of the Treaty to the extent they are beneficial to the assessee will override sect ion 206AA by virtue of section 90(2). In our opinion, the assessee therefore cannot be held liable to deduct tax at higher of the rates prescribed in section 206AA in case of payments made to non-resident persons having taxable income in India in spite of their failure to furnish the Permanent Account Numbers

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CORAM: ,
SECTION(S): ,
GENRE:
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COUNSEL:
DATE: September 16, 2016 (Date of pronouncement)
DATE: November 12, 2016 (Date of publication)
AY: 2005-06 to 2008-09
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CITATION:
The pre-amended Explanation 5A to s. 271(1)(c) applies to non-filer assessees where a ROI is not filed before search and undisclosed income is not offered in the ROI. The amended provision of Explanation 5A, which is applicable to both filers and non-filers of returns, does not apply to searches conducted pre 13.08.2009. Penalty levied u/s 271(1)(c) to cases which are covered by s. 271AAA is void

The provisions of explanation 5A to section 271(1)(c) as it stood as on the date of search or filing of the return u/s 153A of the Act, is important to reckon whether the deeming fiction provided in the said provisions is applicable or not. The pre-amended provisions of explanation 5A is applicable to a non filer assessees, where the assessee’s is not filed return of income before the search and also not disclosed the undisclosed income in the return of income. The amended provision of explanation 5A, which is brought into the statute by the Finance Act 2009, (which was received ascent of President on 13.8.2009) is applicable to both filers and non-filers of returns. In the present case on hand, the law applicable as on the date of search, which was pre-amended provisions of explanation 5A, as per which no penalty can be leviable, in case the assessee has filed return of income u/s 139(1) of the Act before the date of search, whether or not undisclosed income is disclosed in the said return. Admittedly in this case, the search is taken place on 16.11.2007. The assessee has filed return of income u/s 1534 of the Act u/s 30.1.2009

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COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: ,
COUNSEL:
DATE: October 21, 2016 (Date of pronouncement)
DATE: November 12, 2016 (Date of publication)
AY: 2011-12
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CITATION:
S. 35(2AB): The AO is bound to grant deduction if the R&D facility is approved by the competent authority. He has no jurisdiction in sit in judgement over the approval. The fact that the competent authority did not file the report with the department as prescribed is a technical lapse for which the assessee is not liable.

Once, the R&D facility is approved by the competent authority and assessee has complied with the prescribed rules, the A.O. is bound to allow the deductions claimed u/s 35(2AB) of the Act, if he is satisfied that the assessee’s facility is approved by the competent authority. In case the A.O. is having any doubt with regard to the goods manufactured by the assessee or expenditure claimed, the A.O. is bound to refer the matter back to the competent authority through appropriate authority i.e. the Central Board of Direct Taxes (CBDT) and seek clarifications. Thus, it would emerge from above analysis that neither the A.O. nor the board was competent to take any decision of any such controversy relating to report and approval granted by the prescribed authority as it involved expert view or opinion. It was prescribed authority alone which would be competent to take decision with regard to the correctness or otherwise and its order of approval granted in form no.3CL as prescribed u/s 35(2AB) of the Act read with rule 7A of the Income Tax Rules, 1962. In the present case on hand, on perusal of the facts available on record, we find that the A.O. without following the procedure laid down under rules, simply disallowed the expenditure claimed by the assessee by holding that the goods manufactured by the assessee are mere office machines and apparatus listed in Eleventh schedule. Therefore, we are of the view that the A.O. is not correct in disallowing the claim made by the assessee u/s 35(2AB) of the Act

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