Income tax query

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CA Himanshu Sharma (Querist)
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25 December 2013 Dear Experts

posting this query on behalf of my japnese company. we doesnt have any operation of working & PE in India but we have a PAN in india on which our joint ventures companies deduct TDS on royalty & technical fees paid to us.
we had not filled the return of Income tax from very beginning in India.
now we have received a notice from department for non filling of return.

my query is whether we a liability to file fill return in India , is there is any similar case laws ???
request your help in the captioned matter......

Also we are unable to view form26AS , as when we registering our PAN on site it required a digital signature to be registered mandatory but our company not registered in India & non of our director is in india how can we apply for digital Signature.

Regards
CA Himanshu Sharma

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Guest (Expert)

25 December 2013 You are covered in sub section (5) of section 115A which is as follows-:
(5) It shall not be necessary for an assessee referred to in sub-section (1) to furnish under sub-section (1) of section 139 a return of his or its income if—

(a) his or its total income in respect of which he or it is assessable under this Act during the previous year consisted only of income referred to in clause (a) of sub-section (1); and

(b) the tax deductible at source under the provisions of Chapter XVII-B has been deducted from such income.]

So i dont think the notice of AO is valid.
Secondly there is not any such requirement of digital Signature to view your 26 AS.

CA Himanshu Sharma

CA Himanshu Sharma (Querist)
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25 December 2013 Dear Rachit

Thanks for your advice....
But please read section clause a of subsection 1 of section 115A
Which is as follow....

(a) a non-resident (not being a company) or of a foreign company, includes any income by way of—
(i) dividends 82[other than dividends referred to in section 115-O] ; or
(ii) interest received from Government or an Indian concern on monies borrowed or debt incurred by Government or the Indian concern in foreign currency ; or
(iii) income received in respect of units, purchased in foreign currency, of a Mutual Fund specified under clause (23D) of section 10 or of the Unit Trust of India,
the income-tax payable shall be aggregate of—
(A) the amount of income-tax calculated on the amount of income by way of dividends 83[other than dividends referred to in section 115-O], if any, included in the total income, at the rate of twenty per cent ;
(B) the amount of income-tax calculated on the amount of income by way of interest referred to in sub-clause (ii), if any, included in the total income, at the rate of twenty per cent ;
(C) the amount of income-tax calculated on the income in respect of units referred to in sub-clause (iii), if any, included in the total income, at the rate of twenty per cent ; and
(D) the amount of income-tax with which he or it would have been chargeable had his or its total income been reduced by the amount of income referred to in sub-clause (i), sub-clause (ii) and sub-clause (iii) ;

my case is not falling in the above mentioned clause....

Regards

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CA Himanshu Sharma

CA Himanshu Sharma (Querist)
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25 December 2013 Also please request you to please register one company on income tax e-filling site for 2nd query (form 26 AS)

Guest

Guest (Expert)

25 December 2013 YOU ARE FALLING IN CLAUSE (b) WHICH IS AS FOLLOWS-:

(b) 84[a non-resident (not being a company) or a foreign company, includes any income by way of royalty or fees for technical services other than income referred to in sub-section (1) of section 44DA] received from Government or an Indian concern in pursuance of an agreement made by the foreign company with Government or the Indian concern after the 31st day of March, 1976, and where such agreement is with an Indian concern, the agreement is approved by the Central Government or where it relates to a matter included in the industrial policy, for the time being in force, of the Government of India, the agreement is in accordance with that policy, then, subject to the provisions of sub-sections (1A) and (2), the income-tax payable shall be the aggregate of,—

Guest

Guest (Expert)

25 December 2013 YA YOU ARE RIGHT FRIEND YOU NEED TO FILE RETURN IN THIS CASE BECAUSE THE EXCEPTION IS ONLY FOR CLAUSE (a)

CA Himanshu Sharma

CA Himanshu Sharma (Querist)
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25 December 2013 Thanks dear for your advice & efforts made by you....

i need reference of any case law......
i think seniors have some knowledge of relevant case laws.....

Nikhil Kaushik

Nikhil Kaushik (Expert)
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26 December 2013 Dear Himanshu,

A very typical case of non-resident companies being forced to comply with Indian tax compliances.

But then, when did Income tax authorities bothered about that.

Nevertheless, please refer to AAR in the case of VNU Internation B.V. (unfortunately unable to locate citation for the same) wherein it was ruled that if the income is taxable in India (which should be the case by virtue of Section 9) return is to be filed.

With regards to Digital signature problem, I believe you can register at tdscpc.gov.in without DSC to check Form 26AS.

With regards to filing of tax return, you can authorize an Indian national to do that. (read section 140)

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CA Himanshu Sharma

CA Himanshu Sharma (Querist)
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26 December 2013 Dear Nikhil

Thanks for your advice..
Now we can conclude the above query as.

We are liable to fill ROI in India.....
We can file ROI for last two years.....
But what should we do for the period before that two year....as we cant file roi for the same.....

secondly for form 26 AS we are still unaable to view

Nikhil Kaushik

Nikhil Kaushik (Expert)
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26 December 2013 1. With regards to the period before 2 years, in response to the notice received by department, you can provide the computation of income tax to the department with request for issue of notice under 142(1). Once the notice is issued, you can file returns in response to the same. And please avoid 148.

2. What I am saying is that you can register as a tax payer on tdscpc.gov.in. I dont think it required DSC for registration and can view your form 26AS from there. If you are facing problems in registering there, PM me. May be I can do it for you.

Regards

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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29 December 2013 There are host of decisions which have held that return filing is mandatory for foreign companies having any income from India . Exceptions to that, have been already been discussed in earlier posts.

But there might be other issues as we'll, if the total turnover/receipts are more than limits prescribed under section 44 AB.

Anuj