TaxTMI 
TaxTMI 
2013 (11) TMI 1237
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....cription, particularly when appellant company has not paid any fee for such work but paid for executing the work as per contract. 3. The Authorities below have seriously erred in law and in facts while misinterpreted the provisions of Section 194J of the I.T. Act and ignored the definition of the term 'fee for technical services' in Explanation 2 to section 9(1)(vii) of the Income-tax Act, 1961 read with Instruction No. 1862, dated 22/10/1990, issued by Hon'ble CBDT and uphold the applicability of the Provision of Section 194J instead of Section 194C of the I.T. Act, without any tenable basis and/or reason in the facts and circumstances of the case. 4. The Authorities below have erred in law and in facts while applying provisions of Section 194I of the I.T. Act, instead of Section 194C on certain payments to contractors for Hiring of Crane fitted of Motor Vehicle, particularly when such payments are duly covered by Section 194C of The I.T. Act, without any tenable basis and/or reason in the facts and circumstances of the case. 5. That We may kindly be permitted, to reserve the right to amend, modify, alter and/or add new ground/s of the appeal....
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....Rs.60,25,000 The submissions of the assessee before the A.O. were that the above said payments were not in the nature of fees for technical services because the same were made for carrying out simple works contract and accordingly TDS on such payments was rightly made u/s 194C of the Act. The Assessing Officer, however, was of the view that the provisions of section 194J of the Act were applicable for the following reasons:- "(i) Section II of contract No. RPF/2016 dated 27.09.2005 with M/s HLS Asia Ltd., Noida showed that the deductee provided wire line logging, perforation and data processing services. (ii) Under para 2, 2.1 & 2.2 of contract No. RPI/2091 dated 10.08.2005 the deductee, M/s Mercantile Associates, Dibrugarh was to provide man management services as also personnel to carry out normal drilling operations. (iii) Under para 3.1 & 3.2 of contract No. RPI/2091 dated 10.08.2005 the deductee, M/s Purvanchal Banijiya Vikas, Guwahati was to provide trained and well experienced personnel to carry out drilling operations. (iv) Under para 4 (4.1 to 4.5) of contract No. RPI/2095 dated 24.12.2004 the deductee, M/s Exploroil Otech I....
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....ploration, development, extraction, transportation of crude oil and natural gas, transportation of finished petroleum products and production of liquefied petroleum gas. It was further stated that as a part of its mining activities, the company had a Project Office in Rajasthan at Jodhpur where the assessee engaged contractors from time to time for different oilfield services, such as Seismic Survey, Hiring of Drilling Rigs, Wire Line Logging Services, Mud Logging Services, Hiring of Crane, Transportation by Trucks/Trailers, Man Management Services, Cementing Services etc. towards achievement of its objectives. It was contended that the assessee at Jodhpur, in line with the practices followed in its other offices/projects as also in other upstream oil & gas companies under Ministry of Petroleum and Natural Gas (MOPNG), had consistently been collecting TDS from the contractors (recipients) u/s 194C of the Act and depositing the same with the Government Authorities. The assessee explained in detail the activities involved in mining of Oil & Gas as follows :- "Step-1 Obtain Environmental Clearance - In order to obtain Environmental Clearance a study called Environmen....
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....ices included (The Contract was awarded to Purvanchal Banijaya Vikash)- 1. Operation and Maintenance of the Bulk Handling Plant (used for mixing cement) owned by OIL. 2. Mixing of Cement in the Bulk Handling Plant. 3. Storage and transportation of cement in Silos. 4. Putting mixed cement in gaps between the earth and the casing wall for packing with the help of a pump. 5. Packing it with the help of a hydraulic packer. (c) Mud Engineering Services: At the time of boring the hole sub-surface pressure of different intensity was encountered. To neutralize the down-hole pressure a mixture of different chemicals (called mud) was prepared and pumped in to the hole through Bit (it had openings) and Drill Pipes with the help of an equipment called Mud Pump. The services included (This Contract was awarded to Exploroil Otech (I) (P) Ltd.) 1. Operation and Maintenance of Mud Pump and Mud Plant. 2. Ascertaining the proportion of different chemicals on the basis of well profiles. 3. Mixing the chemicals in the Mud Plant. 4. Pumping the Mud in the hole with the help of the Mud Pump. (d) Wire line ....
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....ices. (f) Man Management for Cementing: Since the company did not have the required number of crews, the company outsourced a Man Management Contract, The essential services included ((The Contract was awarded to Purvanchal Banijaya Vikash)- 1. Supply of required numbers of crews for Operation and Maintenance of company's Bulk Handling Plant and Silos. 2. Mixing Cement and pumping the same in the hole as per the direction of the company's engineers. (g) Transportation: Hired trailers and Trucks were extensively used for transporting different equipments (The contract was awarded to RR Enterprise). (h) Crane: Cranes were used for loading, unloading, Rig Assembling and Dismantling and other services during drilling as described above (The contract was awarded to Choudhary Transport). (i) Security: Since huge items of equipments and other materials were stored in the drilling site, necessary arrangements were required to be made for security to prevent theft of the said materials (The contract was awarded to Hindustan Purva Sainik Cooperative Society Ltd). Step 4 Production." It was further stated that ....
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.... Communication Ltd. & Anr. Vs. DCIT 251 ITR 53 (Mad.) (iii) CIT V/s Estel Communications (P) Ltd. 217 CTR 102 (Del.) [13] (iv) Pacific Internet (India) P. Ltd. Vs. ITO-TDS BCAJ March, 2009 at page 795. (v) Millennium Infocom Technologies Ltd. Vs. ACIT 117 TTJ 456 (Del.). (vi) Jaipur Vidyut Vitran Nigam Ltd. Vs. DCIT 123 TTJ 888 (JP.) (vii) Principal Officer, Jaipur Vidyut Vitran Nigam Ltd. Vs. ITO 26 DTR 154 (Jp)(Trib). (viii) Dell Inter-nation Services India (P) Ltd. In Re (10 DTK 249). (ix) CIT Vs. Bharti Cellular Ltd. 220 CTR 258 (Del.). It was further submitted that as per the provisions of section 44BB of the Act, the presumptive income which was subject to Income Tax under Income Tax Act, 1961, was only 10% of the gross receipts, though the said Section was not applicable to resident contractors, yet it could reasonably be inferred that taxable income (profit) of the contractors engaged in similar mining activities was 10% of the gross receipts and if the chargeable presumptive income in case of non residents for executing similar mining contracts was 10% of the gross receipts as per section 44BB of the Act, then deduction of tax u/s 194J would tantamo....
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....ws: (i) ONGC (as representative assessee of Alberta Research Council, Canada) vs. Joint CIT Spl. Range, Dehradun 133 TTJ 0663 (DELHI) (ii) Geofizyka Torun Sp. Z. O. O., In Re 320 ITR 0268 (AAR) (iii) DCIT vs. ONGC as agent of Foramer France 70 ITD 0468 (DELHI) (iv) Assistant Commissioner of Income-tax, Circle 1, Dehradun vs. Paradigm Geophysical Pty. Ltd. 122 ITD 0155 (DELHI) (v) Seabird Exploration FZ LLC, In Re 320 ITR 0286 (AAR) (vi) Director of Income-tax vs. Jindal Drilling and Industries Ltd. 320 ITR 0104 (DELHI) It was further stated that the payments made by the assessee company, if presumed to be considered as fee for technical services, even than the said payments were specifically excluded from the definition of fee for technical services by virtue of exclusion clause in Explanation 2 to section 9(1)(vii) of the Act, read with Instruction No. 1862, dated 22/10/1990, issued by CBDT in respect of definition of fee for technical services and duly supported by various Hon'ble courts decision and the said payments were out of purview of section 194J of the Act and the assessee company had correctly deducted the TDS u/s 194 C of the Act. 8.1 The lea....
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....ated services (page 108 of P.B.). Even in the definition clause of the contract the work had been defined to mean each and every activity required for the successful performance of the services described under this contract. The appellant was paying the deductee consideration for the provision of services. The services were spelt out in detail in para 3.2 of the contract. The contractor was to provide experienced personnel for the services. The price schedule also mentioned payment of operation and maintenance charges. (4) Contract with Exploroil Otech (India) Pvt Ltd. dated 24.12.2004 was for providing mud engineering services (page 135 of P.B.). Even in the definition clause of the contract the work had been defined to mean each and every activity required for the successful performance of the services described under this contract. The appellant was paying the deductee consideration for the provision of services. The services were spelt out in detail in Annexure-1 of the contract. The contractor was to provide experienced personnel for the services. The price schedule also mentioned payment of mobilization charges. 8.2 On the basis of the above, the learned CIT(A) he....
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.... the well (MINE) spontaneously. However, to maintain steady production or increase the production some activities are undertaken. The major activities undertaken in this regard include - (A) Installation of Oil Collecting Stations (OCS)/Gas Gathering Stations (GGS). These installations accumulate Oil/Gas from different wells for onward dispatch to the customers. (B) Installation of flow lines and long distance pipelines for establishment of connectivity between the Oil/Gas Wells (MINES) and the OCS/GGS. Oil/Gas is transported through Flow lines and pipelines in to the OCS/GGS. (C) Installation of Christmas Trees and other well head fittings on the wells. The function of this equipment is control the well pressure and flow of Oil/Gas from the well (Mine). (D) Installation of different kinds of valves to control the flow of Oil/Gas. (E) Installation of Sucker Rod Pump (SRP) for lifting Oil from the well (MINE). (F) Installation of Heater-Separator Unit for separation of Oil, Gas and formation of water. (G) Operation and Maintenance of the OCS/GGS and other plants & equipments such as SRP, Heater Separator Unit. (....
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....specting for, or extraction or exploration or production of mineral oils (Contract for Mining Activities) against circular/clarification of C.B.D.T. and binding precedents submitted before him. It was pointed out that the Assessing Officer failed to follow the decision of the Hon'ble Supreme Court in the case of Associated Cement Co. Ltd. Vs. C.I.T. (1993) 201 ITR 435 (SC) wherein the meaning of "works contract" had been explained. It was submitted that the learned CIT(A) without appreciating the detail submissions of the assessee held as under: (i) The Contractors were providing technical services and the appellant was liable to deduct tax at source u/s. 194J instead of 194C; (Page 20 of the impugned order). (ii) The assessee was liable to deduct tax u/s. 1941 in respect of Choudhary Transport (Page 22 of the impugned order). Crane hired is machinery (Page 25 of the impugned order). Same is for R.R. Enterprises (Page 26); (iii) No deduction certificate for M/s. Hindustan Purv Sainik Human Welfare Multi Purpose Co-Op. Society is not for the relevant year. (Page 26); (iv) As per the evidences filed, the deductees, viz. the contractors had file....
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....oleum and natural gas and these expressions have been defined in section 9(1)(vii) of the Act read with Explanations thereof, for which Departmental Circular No. 202 dated 5th July, 1976 stands issued. It was emphasized that a plain reading of Explanation 2 to section 9(1)(vii) defining fees for technical services clearly shows that consideration received for any construction, assembly, mining or like project undertaken by the recipient does not fall within the ambit of the term "fees for technical services" and that the various High Courts in the assessee's own case and various other similar cases have held that the services for exploration, prospecting and production of mineral oil cannot be regarded as fees for technical services u/s 9(1)(vii) and presumptive income will be assessable u/s 44BB. The reliance was placed on the following case laws: (i) Director of Income-tax vs. Jindal Drilling and Industries Ltd. [2010] 320 ITR 104 (Delhi) (ii) Geofizyka Torun SP.Z.O.O., In re [2010] 320 ITR 268 (AAR) (iii) Seabird Exploration FZ LLC , In re [2010] 320 ITR 286 (AAR) (iv) Wavefield Inseis ASA, In re [2010] 320 ITR 290 (AAR) (v) Oil India Limited vs. CIT [1995] 21....
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....d Cement Company V/s Commissioner of Income Tax (1993) 201 ITR 435 (SC). It was also stated that the CBDT has issued various circulars from time to time to explain the wide meaning and scope of section 194C of the Act. It was submitted that the assessee had rightly deducted tax at source as per provisions contained in section 194C of the Act from payments made to all the concerned contractors since beginning and that the assessee had not paid any fees for technical services but has paid the amount in terms of contract for execution of the work detailed therein, based on the actual execution of work on field of the exploration block of the assessee company and in accordance to the work executed as per their bills with the details of the work done by the respective contractor, after verification of execution of the works contract. Therefore, the tax had been rightly deducted u/s 194C of the Act and as was done in the past. He accordingly prayed to delete the demand of tax and interest sustained by learned CIT(A). 12. In his rival submissions, the learned CIT, D.R. strongly supported the orders of the authorities below and further submitted that during the course of survey conducte....
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....ys, Formation pressure measurement, Cement Bond evaluation services etc. etc. 2. M/s Mercantile Associates, Dibrugarh (Assam):- Company has provided Man-Management Services for an initial period of two years to Company for drilling of approximately fifteen (15) On-Shore oil/gas wells by deploying one number newly acquired (Company owned) 1000 HP Mobile Diesel Electrical Drilling Rig having two Power Packs for the SCR Module to power the mud pumps solid control equipment and other associated equipment/tools/accessories. Drilling will be carried out under supervision of Company and well depths are expected to be in the range of 700-2600 mtrs. (approx). However, the number of wells and well depths may vary at the discretion of the Company Company has provided personnel to carry out normal drilling operation including coring/round trips, lowering of casing pipes, primary testing, completion, and all other associated with the well drilling and completion programme to be furnished by Company before commencement of work. All rig equipment/tools/accessories well consumable sand crane service will be provided by Company. Company will also provide Mud engi....
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....a, if any, Socio-economic study, Source of air pollution. Source of water pollution. 12.1 The learned CIT, D.R. also gave a write-up on the analysis of nature of services, which reads as under: "From the above details it is clear without any doubt that all the impugned contracts were not ordinary contracts. It is so because all the activities required to be performed as per these contracts involved technical knowledge and expertise. The operations of the company in Rajasthan are not ordinary operations. Being one of the very few players the field of highly technical job of oil and gas exploration in India it is obvious that the company is not expected to carry out ordinary civil or electrical etc. construction work. Its operations being highly technical in nature almost always require a great deal of technical knowledge, expertise and skill from the service providers. Contractor Mercantile Associates's personnel team shall consist with electrical engineer, rig electrician, mechanic (ICE), mechanic (pump), welder, mechanical engineer, instrumentation technician, radio operator etc. etc. Contractor Purvanchal Banijya Vikas, Guwahati was required to c....
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....rds. Viewed in this context one can easily understand that the works like man-management services, mud engineering services, services of various operational crews, services of electrical engineers, rig electricians, radio operators, instrumentation technicians, mechanical engineers etc. etc. for which the aforesaid contracts were made by the company, cannot be termed as non-technical or simple work contracts by any stretch of imagination. It is so because all these services required a very high degree of technical knowledge, expertise and skill from the side of the contractors. The contention of assessee company that its case is covered in the exclusionary part of Explanation-2 to sub-section (vii) of section (9) is also not tenable. Since services rendered like man-managements services, mud engineering services, services of various operational: crews, services of electrical engineers, rig electricians, radio operators, instrumentation technicians, mechanical engineers etc. etc. by these contractors are not fallen in the purview of mining or like project. This fact is clear from the reading of the above quoted extracts from the relevant agreements. None of the abo....
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.... person shall, at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to-- (i) one per cent where the payment is being made or credit is being given to an individual or a Hindu undivided family; (ii) two per cent where the payment is being made or credit is being given to a person other than an individual or a Hindu undivided family, of such sum as income-tax on income comprised therein. (2) Where any sum referred to in sub-section (1) is credited to any account, whether called "Suspense account" or by any other name, in the books of account of the person liable to pay such income, such crediting shall be deemed to be credit of such income to the account of the payee and the provisions of this section shall apply accordingly. (3) Where any sum is paid or credited for carrying out any work mentioned in sub-clause (e) of clause (iv) of the Explanation, tax shall be deducted at source-- (i) on the invoice value excluding the value of material, if such value is mentioned separately in the i....
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....established or incorporated by or under a Central, State or Provincial Act and an institution declared to be a university under section 3 of the University Grants Commission Act, 1956 (3 of 1956); or (j) any Government of a foreign State or a foreign enterprise or any association or body established outside India; or (k) any firm; or (l) any person, being an individual or a Hindu undivided family or an association of persons or a body of individuals, if such person,-- (A) does not fall under any of the preceding sub-clauses; and (B) is liable to audit of accounts under clause (a) or clause (b) of section 44AB during the financial year immediately preceding the financial year in which such sum is credited or paid to the account of the contractor; (ii) "goods carriage" shall have the meaning assigned to it in the Explanation to sub-section (7) of section 44AE; (iii) "contract" shall include sub-contract; (iv) "work" shall include-- (a) advertising; (b) broadcasting and telecasting including production of programmes for such broadcasting or telecasting; (c) carriage of goods or passenger....
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....envisaged in the sub- section, therefore, has a wide import and covers 'any work' which one or the other of the organizations specified in the sub-section can get carried out through a contract under a contract and further it includes obtaining by any of such organizations supply of labour under a contract with a contractor for carrying out its work.. Therefore a person who credits to the account of or pans to a contractor any sum payable by any of the organizations specified in s. 194C(1) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and the specific specified organization is liable to deduct two per cent of such sum as income-tax as required under that sub-section." 13.2 From the ratio laid down in the aforesaid decision, it is clear that the work envisaged in section 194C of the Act has vide import and covers any work which can be got carried out through a contract under a contract and includes obtaining by any of such organizations, supply of labour under a contract with a contractor for carrying out its work. Therefore, the Assessing Officer was not justified in observing that secti....
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....il and natural gas. 3. In view of the above opinion, the consideration for such services will not be treated as fees for technical services for the purpose of Explanation 2 to section 9(1)(vii) of the Income-tax Act, 1961. Payments for such services to a foreign company, therefore, will be income chargeable to tax under the provisions of section 44BB of the Income-tax Act, 1961 and not under the special provision for the taxation of fees for technical services contained in section 115A read with section 44D of the Income-tax Act, 1961." 13.4 In the above said instruction, at para 2, it is made clear that prospecting for, or extraction or production of, mineral oil can be termed as 'mining' operations and the expressions 'mining project' or 'like project' occurring in Explanation 2 to section 9(1)(vii) of the Act would cover rendering of services like imparting of training and carrying out drilling operations for exploration or exploitation of oil and natural gas. It is an admitted fact that the assessee is engaged in the project of carrying out drilling operation in exploration or extraction of oil and natural gas and for that purpose he obtained....
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.... a non-resident and accordingly it will not be fair to tax such consideration in the hands of a foreign company on gross basis or to restrict the expenditure incurred for earning the same to 20 per cent of the gross amount as provided in new s. 44D of the IT Act. Consideration for any construction, assembly, mining or like project will, therefore, be chargeable to tax on net basis, i.e., after allowing deduction in respect of costs and expenditure incurred for earning the same and charged to tax at the rates applicable to the ordinary income of the non- resident as specified in the relevant Finance Act." (Emphasis supplied by us) 13.8 From the above circular, it is clear that any mining or like project undertaken by the recipient, the expression 'fees for technical services' is not applicable. On the basis of above, it can be said that the services for mining, obtained by the assessee, were not the technical services. As such the Assessing Officer was not justified in holding that the provisions of section 194J of the Act were applicable because the assessee entered into contract for technical services with the service providers. Therefore, the learned CIT(A) was not jus....
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....icable in the income tax proceedings since each and every assessment year is separate and independent year however, the principle of consistency is to be maintained when the facts are identical. We, therefore, considering the totality of the facts of the present case as discussed herein above, are of the view that the learned CIT(A) was not justified in confirming the action of the Assessing Officer. In that view of the matter, the impugned demand u/s 201(1) and 201(1A) raised by the Assessing Officer and confirmed by the learned CIT(A) is deleted. 14. Vide ground No. 4 the grievance of the assessee relates to the application of provisions of section 194I of the Act instead of section 194C with respect to payments made to contractors for hiring of crane. 15. The facts related to this issue, in brief, are that the Assessing Officer during the course of assessment proceedings noticed that the assessee made total payment of Rs. 88,51,120/- to M/s Choudhary Transport, New Delhi and deducted TDS u/s 194C of the Act treating it as payment to transport contractor. The Assessing Officer observed that the payments to these contactors have been made for hiring of two diesels hydraulic ....
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....nterest thereon. As regards to the payment made to M/s Choudhary Transport, it was stated that the same was covered u/s 194C only since those contracts clearly revealed that the work of lifting, loading, transportation, unloading of heavy goods was entrusted to the said contractors and the work of operation, maintenance etc. of the cranes was also the responsibility of the said contractors. It was further stated that the operator and crew were also provided by the said contractors, therefore, the contract clearly came within the definition of work of carriage of goods by any mode of transport other than by railways, which was specifically covered within the definition of expression 'work' given in section 194C of the Act. It was pointed out that the provisions contained in Explanation (ii) below section 194C(7) provided that "goods carriages" shall have the same meaning assigned to it in Explanation to sub-section (7) of section 44AE of the Act. The reliance was placed the following case laws: (i) M/s Birla Cement Works and Ors. Vs. State of Rajasthan AIR 2003 (Raj.) 251 (ii) Gujco Carriers Vs. CIT 256 ITR 50 (Guj.) It was submitted that the Assessing Officer has b....
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....unloading of heavy goods was entrusted to the said contractors and the work of operation, maintenance etc. of the cranes was also the responsibility of the said contractors. It was stated that the operator and crew were also provided by the said contractors, therefore, such contracts clearly come within the definition of work of carriage of goods by any mode of transport other than by railways, which was specifically covered within the definition of expression 'work' given in section 194C of the Act. It was stated that the provision contained in Explanation (ii) below section 194C(7) provides that "goods carriages" shall have the same meaning assigned to it in Explanation to sub-section (7) of section 44AE of the Act. It was stated that the truck with Cranes were "heavy goods vehicle" and not "machinery". The reliance was placed the following case laws: (i) M/s Birla Cement Works and Ors. Vs. State of Rajasthan AIR (2003) (Raj.) 251 (ii) Gujco Carriers vs. CIT [2002] 256 ITR 50 (Guj) (iii) CIT vs. Popular Art Palace Pvt. Ltd., Hon'ble Rajasthan High Court in C.O. No. 20/2003 in D.B. Appeal No.171/2009 by order dated 08/04/2003 It was further submitted that t....
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....e decision of Hon'ble Madras High Court in the case of CIT vs. Shri Ram Transport Finance Co. Ltd. [2002] 254 ITR 558. 19. It was also pointed out that the ITO, TDS ward 51(6), New Delhi had issued a certificate u/s 197/194I of the Act to M/s Choudhary Transport on 30/06/2008. As per this certificate for the Financial Year 2008-09, the tax at source was to be deducted @ 0.30% plus surcharge and cess as applicable in respect the payments being made to this concern. It was further stated that the said certificate was effective between 24/06/2008 to 31/03/2009 and the Assessing Officer clearly mentioned that the payments to M/s Choudhary Transport were in the nature of rent and were accordingly covered u/s 194I of the Act which was sufficient to prove without any doubt that the payment made for hiring of cranes were covered u/s 194I of the Act. Neither the payees nor the company had ever raised any objection in respect to this certificate. 20. We have considered the submissions of both the parties and carefully gone through the material available on record. In the present case the assessee was having a contract with M/s Choudhary Transport, New Delhi for hiring of two diesel....
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....ection 2(14) of the Motor Vehicles Act, 1988, means any motor vehicle constructed or adapted for use solely for the carriage of goods, or any motor vehicle not so constructed or adapted when used for the carriage of goods. Unloading in the context of truck crane where the crane remains mounted and attached to the truck when carried and even at the destination where it is put to use is not a relevant factor at all. Though not required to be loaded or unloaded like other goods transported in carriage of freight, the crane remains fixed, mounted on the truck which has been adapted for use solely for its carriage and such truck crane is used for the special service of lifting and moving heavy objects. This is why such a mobile crane is registered as a heavy motor vehicle which is a heavy goods vehicle as defined in section 2(16) of the Motor Vehicle Act." (Emphasis supplied) 21.1 From the ratio laid down in the aforesaid referred to case, it is clear that the lorry or truck would mean not only any motor vehicle designed to carry freight or goods but also to perform special services. Motor vehicles like fire trucks, fork lift trucks and crane trucks which are designed for special ser....
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....Certificate" to the payee society on 10/06/2003 and accordingly when the payee submitted this certificate, in later part of the financial year, tax was not deducted on the payments made to it. The Assessing Officer observed that copy of the said certificate issued on 10/06/2003 did not mention the period for which it was applicable. When it was pointed out to the assessee, it was stated that since there was no period mentioned in the said certificate, it was presumed that it was effective for the Financial Year under consideration. The Assessing Officer enquired from ITO, Ward 1(1), Udaipur who informed that for Financial Year 2005-06 and 2006-07 also "No Deduction Certificate" were again issued to the aforesaid society. However, he could not confirm that for Financial Year 2008-09 also such certificate was ever given. The Assessing Officer was of the view that the assessee was required to ensure before making the payment to the above said society as to whether for the financial year under consideration any "No Deduction Certificate" was ever issued by the concerned Assessing officer. He, therefore, held that the assessee company did not fulfill its legal obligations to deduct tax ....
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....missions made before the authorities below and further submitted that the assessee furnished the certificate dated 08/05/2008 for non deduction of tax issued by the Assessing Officer which was valid up to 31/3/2009 and related to the society whose income was exempt u/s 80P of the Act, therefore, the action of the Assessing Officer in considering the assessee as "assessee in default" for the payment of the impugned amount was not justified and that the learned CIT(A) without considering the facts of the case in right perspective confirmed the action of the Assessing Officer. Reliance was placed on the following case laws: - CIT Vs. Rishikesh Apts. Co-Operative Housing Society Ltd. (2002) 253 ITR 310 (Guj.) - Mahindra & Mahindra Vs. DCIT (2009) 122 TTJ (Mum.) (S.B.) 577. - CIT Vs. Adidas India Marketing P. Ltd. (2007) 288 ITR 379 (Del). - CIT vs. Rajasthan Rajya Vidyut Prasaran Nigam Ltd. (2006) 287 ITR 354 (Raj.). - ITO vs. Emrald Cost Co.P.Ltd. (2008)304 ITR (AT) 338 (Jd.) - CIT Vs. Eli Lilly and Co. (India) P.Ltd. (2009) 312 ITR 225 (SC) 27. In his rival submissions the learned CIT, D.R. strongly supported the orders of the authorities below and further submit....