IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 4559 OF 2013 CASTLETON INVESTMENT LTD. ... Appellant VERSUS DIRECTOR OF INCOME TAX, (INTERNATIONAL TAXATION-I), MUMBAI ... Respondent WITH CIVIL APPEAL NO. 4560 OF 2013 O R D E R Interlocutory application for intervention is allowed. In these appeals order of Authority for Advance Rulings (Income Tax), New Delhi, (hereinafter referred to as 'AAR') passed on 14.08.2012 is questioned. basic issue, which is raised, pertains to applicability of Section 115JB of Income Tax Act, 1961 (hereinafter referred to as 'Act') in respect of foreign company which does not have any Permanent Establishment (PE) in India. Mr. Harish Salve, learned senior counsel appearing for appellants, has brought to our notice circular dated 02.09.2015 issued by Central Board of Direct Taxes, Ministry of Finance, Government of India. It states that Minimum Alternate Tax (MAT) provisions will not be available Signature Not Verified Digitally signed by ASHWANI KUMAR to FIIs and FPIs not having business/Permanent Date: 2015.10.05 14:55:54 IST Reason: Establishment in India for period prior to 01.04.2015. C.A. No. 4559/2013 etc. 1 We reproduce hereinbelow said circular in entirety: - Subject: Report on applicability of Minimum Alternate Tax (MAT) on FIIs/FPIs for period prior to 01.04.2015 and acceptance of Government thereof-reg.- Committee on Direct Tax Matters chaired by Justice A. P. Shah, was constituted to examine issue of applicability of Minimum Alternate Tax ('MAT') on FIIs/FPIs for period prior to 01.04.2015. Committee has submitted its final report to Government on 25.08.2015. Committee has recommended that section 115JB of Income Tax Act, 1961 ('Act') may be amended to clarify inapplicability of provisions of section 115JB to FIIs/FPIs having no permanent establishment (PE)/ place of business in India. Government has accepted said recommendation and it has been decided to carry out appropriate amendment in Act so as to prescribe that MAT provisions will not be applicable to FIIs/FPIs not having place of business/ permanent establishment in India, for period prior to 01.04.2015. field authorities are accordingly advised to take into consideration above position and keep in abeyance, for time being, pending assessment proceedings in cases of FIIs/FPIs involving above issue. They are further advised not to pursue recovery of outstanding demands, if any, in such cases. This is followed by Press Release dated 24.09.2015 in which two alternatives are mentioned when provisions of Section 115JB of Act shall not be applicable to foreign company under certain circumstances. It reads as under: - Sub: Applicability of Minimum Alternate Tax (MAT) on foreign companies having no PE in India regarding - Issues relating to taxation of foreign companies, having no permanent establishment in India, have been under consideration of Government. In this regard, Government has already clarified inapplicability of MAT C.A. No. 4559/2013 etc. 2 provisions to FIIs/FPIs. Government has now considered issue of applicability of MAT under section 115JB of Income Tax Act to foreign companies having no place of business/ permanent establishment in India. After due consideration of various aspects of matter, Government has decided that with effect from 01.04.2001 provisions of section 115JB shall not be applicable to foreign company if- foreign company is resident of country having DTAA with India and such foreign company does not have permanent establishment within definition of term in relevant DTAA, or foreign company is resident of country which does not have DTAA with India and such foreign company is not required to seek registration under section 592 of Companies Act 1956 or section 380 of Companies Act 2013. appropriate amendment to Income Tax Act in this regard will be carried out. Learned Attorney General has made statement at Bar that Government would abide by decision which has been taken in aforesaid Circular dated 02.09.2015 and Press Release dated 24.09.2015. Learned counsel for parties agree that in view of this submission, present appeals can be disposed of in terms thereof. Ordered accordingly. We may place on record that one more issue has been decided in impugned opinion of AAR which relates to applicability of transfer pricing provisions, i.e., Sections 90-95 to foreign companies. However, Mr. Salve C.A. No. 4559/2013 etc. 3 submits that since there is another Press Release on 28.01.2015, appellants are not pressing that issue. ........................, J. [ A.K. SIKRI ] ........................, J. [ ROHINTON FALI NARIMAN ] New Delhi; September 30, 2015. C.A. No. 4559/2013 etc. 4 ITEM NO.120 COURT NO.14 SECTION IIIA S U P R E M E C O U R T O F I N D I RECORD OF PROCEEDINGS Civil Appeal No. 4559/2013 CASTLETON INVESTMENT LTD. Appellant(s) VERSUS DIR.OF I.T INTERNATIONAL TAXN MUMBAI Respondent(s) (With appln. (s) for intervention and office report) WITH C.A. No. 4560/2013 (With Interim Relief and Office Report) Date : 30/09/2015 These appeals were called on for hearing today. CORAM : HON'BLE MR. JUSTICE A.K. SIKRI HON'BLE MR. JUSTICE ROHINTON FALI NARIMAN For Parties Mr. Parse Padhiwala, Sr. Adv. Mr. Jay Savla, Adv. Ms. Renuka Sahu, Adv. Mr. Abhinav Sharma, Adv. Mr. Mukul Rohatgi, AG. Mr. Subas Acharya, Adv. Mr. Arijit Prasad, Adv. Mr. Pritish Kapoor, Adv. Ms. Diksha Rai, Adv. Mrs. Anil Katiyar, Adv. Mr. Harish N. Salve, Sr. Adv. Mr. Ajay Bhargava, Adv. Ms. Vanita Bhargava, Adv. Mr. Aseem Chaturvedi, Adv. Ms. Aditi Mukundan, Adv. Mr. Karan Lahiri, Adv. M/s. Khaitan & Co. For Intervenors Mr. Mukesh Butani, Adv. Mr. Gaurav Gupta, Adv. Mr. S. S. Tomar, Adv. M/s. Khaitan & Co. UPON hearing counsel Court made following O R D E R appeals are disposed of in terms of signed order. (Nidhi Ahuja) (Renu Diwan) COURT MASTER COURT MASTER [Signed order is placed on file.] C.A. No. 4559/2013 etc. 5 CASTLETON INVESTMENT LTD. v. DIRECTOR OF INCOME TAX, (INTERNATIONAL TAXATION-I) MUMBAI