5.1 As regards admissibility of fresh ground during assessment proceedings or appellate proceedings, albeit ITAT in the instant case did not consider the ruling of SC in the case of Goetze India 284 ITR 323 (interalia barring admissibility of fresh claims during assessment proceedings except by way of revised return), it seems that conclusion drawn by ITAT in this regard that “… there cannot be estoppel against the statute… ” is in line with:

• Constitutional spirit enshrined in Article 265 (supra)

• SC rulings in Mahalakshmi case (supra) and Anchor Pressing 161 ITR 159 etc. (not considered in Goetze supra)

• CBDT views contained in Circular No 14 dated 11 April 1955 (not considered in Goetze supra)

• Mum ITAT ruling in Chicago Pneumatic 15 SOT 252 which has distinguished Goetze (supra) in light of Article 265 (supra) and CBDT Circular No 14 (supra)

In aforesaid connection, useful reference may be further made to Delhi ITAT ruling in the case of SNC Alvalin 110 TTJ 13, wherein ITAT has distinguished Goetze (supra) on the ground that since fresh claim has been dealt with by AO and CIT(A) , now at ITAT level, revenue cannot rely on Goetze (supra) to oust assessee’s claim otherwise dealt with. Further, Delhi ITAT in Moser Baer 295 ITR 148 (AT) has also distinguished Goetze (supra) in context of fresh claim (viz. opting out) under section 10B of the Act. In this connection, while distinguishing Goetze (supra) ITAT has held that Goetze (supra) operates in different context and has no applicability to section 10B, which is a code in itself.

5.2 As regards time span for which subject project remained in operation, albeit ITAT did not specifically considered OECD Commentary on Model Tax Convention, but reasoning drawn by ITAT that “……if the enterprise ends its business activities for good, its PE will also cease to exist…” seems to be in harmony with OECD which has also echoed similar views in its commentary in relation to the subject matter (refer para 11 etc.).

5.3 As regards filing of return of income by an overseas company which although carried certain operations in India but did not have a PE constituted under subject DTAA and hence no taxability, it seems that views propounded by ITAT in this regard that “…..it (assessee) did not require to file return as there was no PE of its own during material point of time……” seems to be in consonance with views of AAR in Venenburg 289 ITR 464 and contrary to AAR in XYZ – ABC Equity Fund 250 ITR 194.

In aforesaid connection, in the opinion of the author, applicability of section 139 of the Act interalia dealing with filing of return of income, in context of foreign companies that are accepted to have no income tax chargeability in India with some foot prints in India, needs to be analysed in the backdrop of:

• Section 1(2) of the Act (stating that the ‘Act’ extends to whole of India)

• Article 245(2) of Indian Constitution (giving power to parliament to make laws having extra territorial operation)

• SC ruling in Electronic Corporation of India 183 ITR 43, interpreting Article 245 in context of ‘Act’ etc, interalia held that there must be some provocation in India to apply an Indian law to a subject

5.4 As regards evaluation of project PE in aforesaid scenario (which fell short of time limit specified in relevant PE article of DTAA), albeit ITAT did not considered the question whether same may be evaluated in residuary para 1 (fixed place PE), it seems that Delhi ITAT in BKI/HAM case 70 TTJ 480 and AAR in its rulings reported at 237 ITR 156 and 228 ITR 55, applying the maxim “generallia specialibus non derogant” has taken a view that project PE can only be evaluated in terms of specific para of Article 5 of relevant DTAA and not as ‘fixed place PE’ which is general in nature. However, a contrary view seems to have been taken by Mumbai ITAT in Micoperi SPA Milano case 82 ITD 369.