2024 (7) TMI 1055 - HC - Income Tax

Bombay High Court aligns with Supreme Court precedent on TDS under Sec. 194-H, favors assessee for refund within three months.

M/s. Bharti Airtel Limited Versus The Assistant Commissioner of Income Tax (TDS), Circle 1 (1), Mumbai

The HC of Bombay disposed of an appeal concerning TDS under Sec. 194-H of the IT Act, aligning with a precedent set by the SC in a similar case. The ... TDS u/s 194H - Tax liability to be deducted at source and the discounted price by the distributors - HELD THAT:- As decided in Bharti Cellular Limited (now Bharti Airtel Limited) [2024 (3) TMI 41 - SUPREME COURT] wherein, the issue which fell for the consideration of the Supreme Court was in relation to the liability to deduct tax at source u/s 194-H on the amount which as per the revenue, is a commission payable to an agent by the assessee under the franchise / distributorship agreement, between the assessee and the franchise / distributor. The assessee also in the present proceeding has contended that neither the amounts were paid as a commission or brokerage to the franchise / distributor nor were the franchise / distributor’s their agents. High Court had taken a view that the assessee was liable to deduct tax at source u/s 194(H) whereas, this Court as also the Rajasthan High Court and the Karnataka High Court had held that Section 194(H) of the Act was not attracted in the facts and circumstances of the case. The Supreme Court considering the rival contentions upheld the view taken by this Court. Thus, on a reading of the said decision of the Supreme Court, it is clear that the question of law as raised in the present appeals was squarely dealt by the Supreme Court and answered in favour of the assessee. In this view of the matter, further adjudication of these appeals is not called for, as the question of law would stand answered by the authoritative pronouncement of the Supreme Court, in the assessee’s own case in Bharti Airtel Limited (supra). We answering the question in favour of the assessee and against the revenue. The High Court of Bombay heard an appeal regarding the deduction of tax at the source under Section 194-H of the Income Tax Act. The Supreme Court ruled in favor of the assessee in a similar case, leading the High Court to dispose of the appeal in favor of the assessee. The assessee can apply for a refund within three months, and no costs were awarded.