TaxTMI 
TaxTMI 
2011 (10) TMI 158
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....ound of stay proceedings, the assessee relied on the decision of the Jaipur Bench in Jaipur Vidyut Vitran Nigam Ltd. v. Dy. CIT [IT Appeal No. 132 (Jp.) of 2009, dated 30-4-2009] for the proposition that no deduction of tax at source was required under Chapter XVII-B on wheeling and transmission charges paid by it and hence disallowance u/s 40(a)(ia) was wrongly made. The Tribunal in the original order also noted the contention raised by the learned Departmental Representative that disallowance u/s 40(a)(ia) was rightly made on the failure of the assessee to deduct tax at source under the relevant provisions. After that the Tribunal recorded that prima facie there was some substance in the arguments advanced by both the sides in favour or against the disallowance u/s 40(a)(ia). After considering the relevant fact that the assessee itself started deducting tax at source on similar payments from assessment year 2009-2010, the Tribunal refused to grant the stay. 3. It was contended before the Hon'ble High Court that the decision of Jaipur Vidyut Vitran Nigam Ltd.'s case (supra) was not properly considered by the Tribunal while evaluating prima facie the merits of applicability of the....
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....r from the generation point to the consumers is transmitted through the transmission network of RVPN." 6. Thereafter he also read certain other parts of the order to demonstrate the nature of payment made by that assessee. The sum and substance of his submission was that the nature of services received by the present assessee were identical with those in the case of Jaipur Vidyut Vitran Nigam Ltd. (supra). In the opposition, the learned Departmental Representative contended that the facts and circumstances of that case were different from those prevailing under consideration. 7. The primary condition for applying decision in one case to another is to first find out whether the facts and the legal position in both the cases is similar. If the facts are similar, then there does not arise any problem in adopting the earlier view. If however, the facts are found to be distinguishable, then the earlier view cannot be applied as such. In this direction we shall proceed to examine the facts of both the cases. We have extracted above the nature of work done for which payment was made by Jaipur Vidyut Vitran Nigam Ltd.'s case (supra) as for purchasing power from the generation company and....
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.... Jaipur Vidyut Vitran's case(supra) but failed to prove that such additional services were also there in that case. Since host of other services were provided to the assessee under BPTA, apart from those received by Jaipur Vidyut Vitran Nigam Ltd.'s case (supra), it becomes manifest that prima facie the facts of the two cases are not similar, what to talk of identical, as has been projected on behalf of the assessee. In view of difference in the package of services received by the assessee under BPTA and those received in Jaipur Vidyut Vitran Nigam Ltd.'s case (supra), it becomes manifest that at this preliminary stage the conclusion drawn in that case cannot be straight away applied to the instant case inasmuch as it is a question of determination of nature of services which decides about the section under which tax is deductible, if required. As such it cannot be held that prima facie the facts of two cases are matching. 9. It is further important to note that after the survey was conducted by the Department at the assessee's premises, it started deducting tax at source on such payments made under BPTA from assessment year 2009-2010 u/s.194-I. A copy of the certificate u/s 197(1....
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....icate from ACIT (TDS) Circle, u/s 197(1) for getting tax deducted at source at a lower rate. No other case in favour of the assessee, whether of any Hon'ble High Court or that of the Tribunal, has been brought to our notice. These are the factors which destroy the prima facie case in favour of the assessee. 12. The learned A.R. vehemently argued that no disallowance u/s 40(a)(ia) was required on the ground that the payee adequately paid the tax on the amount received from the assessee. He further argued that the Department itself was also not clear of its stand as to whether the payments were to be covered u/s 194J or 194C or 194-I. 13. We are unable to accept this contention. Section 40(a)(ia), at the material time, reads as under:- "40. Notwithstanding anything to the contrary in sections 30 to 38, the following amounts shall not be deducted in computed the income chargeable under the head 'Profits and gains of business or profession'--- ** ** ** (ia) any interest, commission or brokerage, rent, royalty, fees for professional services or fees for technical services p....
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....ssee to deduct tax at source or to deposit such tax after deducting within the prescribed time entails several consequences such as applicability of sections 201, 40(a)(ia) and also penalty u/s 271C etc. No doubt the payment of due tax by the payee would exonerate the assessee from being treated as assessee in default u/s 201, but would not obliterate the other statutory consequences for non-deduction of tax deducted at source including the disallowance in terms of section 40(a)(ia). This section is immediately attracted when the assessee fails to deduct tax at source under Chapter XIV-B or pay such tax to the exchequer with in the stipulated period. Payment of due tax by the payee is of no consequence when the question of disallowance u/s 40(a)(ia) in the hands of the payer is considered. 15. The above discussion shows that the assessee has failed to prove a prima facie case in its favour. 16. A chart has been filed showing the working of demand after giving effect to the direction of the learned CIT(A). As per this chart, the total amount payable to Income Tax Department now stood at Rs.673,82,35,203. The learned Departmental Representative contended that if the assessee was se....
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....eing concerned about the balance of convenience, the public interest and a host of other relevant considerations. In this case it has been held as under :- "All this is not to say that interim orders may never be made against public authorities. There are, of course, cases which demand that interim orders should be made in the interests of justice...... But since the law presumes that public authorities function properly and bona fide with due regard to the public interest, a court must be circumspect in granting interim orders ..... There are several other vital considerations apart from the existence of a prima facie case. There was no question of any balance of convenience being in favour of the respondent-company. The balance of convenience was certainly in favour of the Government of India. Governments are not run on mere bank guarantees...... No governmental business or for that matter no business of any kind can be run on mere bank guarantees. Liquid cash is necessary for the running of a Government as indeed any other enterprise. We consider that where matters of public revenue are concerned, it is of utmost importance to realise that interim orders ought not to be granted....