TaxTMI 
TaxTMI 
2005 (7) TMI 581
X X X X Extracts X X X X
X X X X Extracts X X X X
....er, the assessee has not deducted tax at source before making the payment. According to the learned counsel, the recipient of the amount namely International Airport Authority of India has paid the entire tax due on the amount paid by the assessee. Therefore, the assessee cannot be treated as assessee-in-default under section 201(1) of the Income-tax Act. According to the learned counsel, the Assessing Officer treated the payment made by the assessee towards landing and parking charges as rent and ultimately concluded that the assessee ought to have deducted 20% of the amount paid to International Airport Authority of India as tax at source under section 194-I of the Income-tax Act. Since the assessee has not deducted tax at source before making the payment, the Assessing Officer has also levied interest under section 201(1A) of the Income-tax Act. According to the learned counsel, interest under section 201(1A) could be levied from the date of actual payment of the money till the date of payment of taxes by the International Airport Authority of India. The learned counsel for the assessee further submitted that the very same issue of landing and parking charges to International Ai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ng other technical services for which the payments were made. According to the learned counsel, the technical services are like getting weather report, instruction to over flights to fly over Indian territories, such other technical services which are needed to fly the aircraft on the Indian territory. The learned counsel for the assessee Mr. R. Vijayaraghavan clarified that the navigational facilities are not just like using the cell phone subscribers, the sophisticated equipments installed by cell phone companies for the purpose of communication. Therefore, he very fairly conceded the judgment of the Madras High Court in the case of Skycell Communications Ltd. (supra) may not be applicable to the facilities and technical services offered by International Airport Authority of India to the assessee-company. 4. Regarding the levy of interest under section 201(1A), the learned counsel for the assessee submitted that the interest could be levied till the tax due has been paid either by the assessee or by the recipient of the amount. The Assessing Officer, however, levied interest till October, 1999 by which time the recipient International Airport Authority of India had paid all th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed tax at source either under section 194-I in respect of landing and parking charges or under section 194J in respect of navigational charges, the Assessing Officer rightly levied tax till the month of October 1999. 7. We have considered the rival submissions on either side, and also perused the material available on record. The first issue is regarding the liability of the assessee for deduction of tax at source with respect to payment for landing and parking facilities. The only contention of the Revenue is that the landing and parking facilities provided by International Airport Authority of India is in the nature of providing a space for rent, therefore, the payment has to be treated as payment of rent. This issue has been elaborately discussed by the Delhi Bench of this Tribunal in the case of Japan Airlines ( supra). After considering the entire factual situation in the case of landing and parking of aircraft in the airport, a co-ordinate Bench of this Tribunal in the case of Japan Airlines (supra), came to a conclusion that the International Airport Authority of India never intended to give out exclusive possession of any part of the landed property in relation to landin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....thority of India had paid taxes on the amount received from the assessee-company also. Hence, in our opinion, the assessee need not be treated as assessee-in-default. Under the scheme of the Income-tax Act, the deduction of tax at source is only to ensure collection of tax on behalf of Government. Once the recipient paid the tax, the purpose or object sought to be achieved under the scheme of the Act is achieved. Therefore, the tax need not be once again recovered from the assessee. The question of declaring the assessee as assessee-in-default would arise when the recipient failed to pay the tax. Since the recipient company, admittedly, paid the tax, in our opinion, any further recovery from assessee would amount to double taxation which is not permissible under the Act. Accordingly, we hold that there is no justification to treat the assessee as assessee-in-default. When the Assessing Officer himself revised the order by making a rectification under section 154, in our opinion, there is no justification on the part of the first Appellate Authority to restore the original order with respect to section 201(1). 10. Now coming to levy of interest, the Department is entitled to reco....