ITAT President Declines to Form Special Bench on TRC-Related Issues in the Essar Communications Case

News, dated 27-08-2024

The Revenue filed an application before the President of the Tribunal, seeking reference of the Appeals to a Special Bench. The appeal pertains to Essar Communications Ltd. (ECL) and Essar Com Ltd. (ECOM) challenging the Assessment order rejecting the TDS refund of Rs. 2821,21,70,693/- and Rs. 1097,18,51,195/- respectively.

The application was filed on the ground that the appeals involved issues of substantial public importance requiring a decision in an authoritative manner.

After hearing the parties, the President of the Tribunal held that the appeals do not involve questions of law, much less of public importance, so as to require reference of the appeals to a Special Bench.

The reference was sought only because the appeals involve questions of great public importance, not on the grounds of any conflict of decisions by co­ ordinate benches in similar factual situations.

It can prima facie be seen that, broadly, two questions are involved. One concerns the TRC and the India­ Mauritius DTAA, which essentially consists of deciding whether the assessees are tax residents of India or Mauritius. The next issue, which, according to the parties, arises only in the appeal of ECL, is whether the assessee has engaged in colourable devices and/or entered into sham and bogus documents to show that the assessee’s effectual control and management are from Mauritius.

The president held that both these are issues of fact. The decision arrived at by the Bench one way, or the other would then be governed by the law laid down by the Hon’ble Supreme Court in the case of Mc Dowell & Co. Ltd. [1985) 154 ITR 148 (SC), Union of India and Vodafone International Holdings B.V. [2012) 341 ITR 1 (SC).

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