DETECON INDIAN PROJECT OFFICE Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) The petitioner is a non-resident (foreign) company incorporated in Germany, having its registered office at Bonn, Germany It has its project office in New Delhi which is regularly assessed to income-tax. In January, 1986 it entered into an agreement with the President of India through the Ministry of Transport, Department of Railways by which it agreed to act through its New Delhi Project office as consultants and to provide consultancy services with regard to architecture and planning for integrated communication network, for Indian Railways. Since for the purpose of executing the said agreement the petitioner company required the services of expatriate employees, question arose with regard to income-tax payable by them. Clause 29 of the Agreement took care of that. The said clause reads as under:

(2.) It so happened that the Income Tax authorities levied interest on the petitioner company under section 201 (1 A) of the Act for not deducting tax under section 192 out of salary and the perquisites paid. The petitioner took the matter to the Income Tax Appellate Tribunal, Delhi Bench challenging the order and in support principally relied upon Clause 29 of the Agreement as reproduced above. The Tribunal by its order of September 27, 1991 held section 201 (1 A) as not attracted and while quashing the order observed as under:

(3.) On appearing before the leamed Additional Chief Metropolitan -Magistrate, the petitioner moved an application undersection 245(2) of the Code of Criminal Procedure seeking quashing of the proceedings relying not only on Clause29 of the Agreement but also on the finding of the Tribunal to which reference has already been made by me above. However, it did' not find favour with the learned Magistrate who dismissed the same by his order of April 6, 1993. Hence this petition.'