Renting of immovable property tax follows the actual lessor and rent recipient; extended limitation needs proof of suppression.

Service tax on renting of immovable property is recoverable from the person who actually lets out the premises and receives the rent. Where lease deeds, receipts, affidavits and PAN records showed the Agricultural Produce Marketing Committees as lessor and rent recipient, the Board could not be treated as the service provider, so the tax demand was unsustainable. The extended limitation period also could not be invoked because the record did not establish suppression of facts or intent to evade tax, and the notice proceeded on an incorrect assumption about who earned the rent. The demand was therefore barred by limitation and the assessee obtained consequential relief.

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Issues: (i) Whether the appellant Board could be fastened with service tax liability on rental income where the lease deeds and receipts showed the Agricultural Produce Marketing Committees as the lessor and recipient of rent; (ii) Whether the demand for the extended period was sustainable in the absence of suppression with intent to evade tax.

Issue (i): Whether the appellant Board could be fastened with service tax liability on rental income where the lease deeds and receipts showed the Agricultural Produce Marketing Committees as the lessor and recipient of rent.

Analysis: The rental agreements showed the Agricultural Produce Marketing Committees as the lessor and required rent to be paid only to them. The affidavit and PAN records also indicated that the rent was collected by the committees and treated as their income. On that basis, the Board was neither the lessor nor the recipient of rent, and the Revenue's assumption that the Board was the service provider was unsupported by the documents on record.

Conclusion: The service tax demand against the appellant on the rental income was not sustainable and is answered in favour of the assessee.

Issue (ii): Whether the demand for the extended period was sustainable in the absence of suppression with intent to evade tax.

Analysis: The record did not establish that the appellant had suppressed any material facts or acted with intent to evade tax. The show cause notice itself proceeded on an incorrect premise as to the identity of the lessor and beneficiary of rent. In these circumstances, invocation of the extended period was not justified.

Conclusion: The extended period demand was barred by limitation and is answered in favour of the assessee.

Final Conclusion: The impugned order was set aside and the appeal was allowed on merits as well as on limitation, with consequential relief as permitted by law.

Ratio Decidendi: Service tax on renting of immovable property is recoverable from the person who actually lets out the premises and receives the rent, and the extended limitation period cannot be invoked without proof of suppression or intent to evade tax.

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