HC : Upholds CIT’s probe u/s. 263 into Singaporean co.’s Rs. 100 cr. contract revenue from Cairn India

Uttarakhand HC upholds invocation of CIT’s revisionary jurisdiction u/s. 263 in case of assessee (a Singaporean co. engaged in rendering offshore geophysical services), dismisses assessee’s writ; Assessee had claimed that since the duration of its contract with Cairn India (for providing seismic vessel in connection with oil exploration) was only for 102 days, the gross revenue of Rs. 100.33 cr. earned therefrom during FY 2014-15 was not taxable in India in view of Article 5(5) of India-Singapore DTAA (which provides 183 days threshold); Finds force in CIT’s view that the seismic vessel itself constituted fixed place PE under Article 5(1) of DTAA, also AO was wrong in accepting assessee’s resort to Article 5(5) and that no effort was made by AO to study relevant provision of DTAA; Further, HC states that instead of assessee giving explanation to CIT, it has filed the present writ petition before this Court, accordingly upholds the show cause notice issued u/s. 263; Noting the necessary conditions of Sec. 263 that the CIT must come to the conclusion that the order is both erroneous and prejudicial to the interest of Revenue, HC opines that there is definitely application of mind by CIT on both these aspects:HC