TaxTMI 
TaxTMI 
2014 (11) TMI 952
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....ce in respect of the Commission payments on pre-paid charges and it is proposed to raise demands in respect of such commission payments as in the previous years. It was further stated that as the proposed order under sections 201(1) and 201(1A) of the Act will be in respect of the default under section 194H of the Act, the petitioner was directed to submit their objections to the said notice dated 21.10.2013, pertaining to the financial years 2012-13 & 2013-14. (c) By communication dated 16.12.2013, the petitioner submitted certain details which information was sought for by the second respondent during the course of personal hearing on 10.11.2013. Thereafter, assessment orders were passed for the assessment years 2012-13, 2013-14 & 2014-15 on 30.12.2013. The petitioner filed a Stay Petition before the second respondent under section 220(6) of the Act on 31.01.2014, in respect of the demands made pursuant to the assessment orders dated 30.12.2013, for the assessment years 2013-14 & 2014-15. The petitioner preferred Appeals to the first respondent against the assessment orders dated 30.12.2013, passed by the second respondent in respect of the assessment years 2013-14 & 2014-....
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....ble to distribute them will it be treated as income earned by the Distributor. Hence there is no fixed amount of income from the distribution agreement. Further it is submitted that the transaction between the petitioner and its pre-paid Distributor as being on principal to principal basis, the question of deducting TDS does not arise. Further, it is submitted with regard to the decision of Income Tax Appellate Tribunal on the TDS liability for the assessment years 2007-2008 and 2008-09, the same is pending before this Court in T.C.Appeal Nos. 308 & 309 of 2011 and conditional interim order has been granted and 50% of the demand has been paid. 5. Learned Senior Counsel after inviting the attention of this Court to the averments in the Stay Petition, submitted that the petitioner placed reliance on the decisions of the Kerala High Court in the case of M/S HAMEED AND OTHERS v. DIRECTOR OF STATE LOTTERIES 7 OTHERES [249 ITR 186]; the decision of the Gujarat High Court in the case of AHMEDABAD STAMP VENDORS ASSN. v. UNION OF INDIA [(2002) 257 ITR 202]; the decision of the Allahadbad High Court in the case of JAGRAN PRAKASHAN LIMITED [345 ITR 288] and the decision of the Kerala High Co....
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....earlier orders. It is submitted that though hearing notice was given to the petitioner and they were directed to produce required details, they have not produced the same and at present they cannot contend that the accounts are on all India basis, etc. and having not produced the accounts as called for, the petitioner cannot claim that matter should be remanded for fresh consideration before the authority. 10. Heard the learned counsel appearing on either side and perused the materials placed on record. 11. So far as the assessment years 2009-10, 2010-11 and 2011-12, the Commissioner of Income Tax (Appeals), has upheld the orders of the Assessing Officer, wherein identical issue has arisen for consideration. In so far as assessment years 2007-08 and 2008-09, Commissioner of Income Tax (Appeals) has confirmed the order of the Assessing Officer and the Income Tax Appellate Tribunal has rejected the petitioner's appeal and the petitioner has filed Tax Case (Appeals) before this Court and it is pending consideration and a conditional order of stay has been granted. 12. The question which falls for consideration in these Writ Petitions is as to whether the first respondent ignori....
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....de for services rendered by the Distributors under the pre-paid scheme. The appellant therein took a stand that the supply of sim cards, recharge coupons etc., under the prepaid scheme is sale of goods at discounted price by the Assessee and besides the discount given at the time of sale of these items, Assessee is not paying any commission or crediting any commission in the account of the distributors and so much so, Assessee is not liable to deduct and remit tax at source in terms of Section 194H of the Act. Considering the said submission, the Division Bench of the Kerla High Court held as follows: "6. Senior counsel appearing for the assessee has relied on several judgments, particularly two decisions of this court in M.S.HAMEED V. DIRECTOR OF STATE LOTTERIES reported in (2001) 114 TAXMAN 394 (KER.) and KERALA STATE STAMP VENDORS ASSOCIATION V. OFFICE OF THE ACCOUNTANT GENERAL reported in (2006) 150 TAXMAN 30(KER.), the decision of the Gujarat High Court in AHMEDABAD STAMP VENDORS ASSOCIATION V. UNION OF INDIA reported in (2002) 124 TAXMAN 628 (GUJ.), and the decision of the Bombay High Court in COMMISSIONER OF INCOME TAX V. QUTAR AIRWAYS in I.T.A. No.99 of 2009 dated 26.3.200....
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.... paid commission in the form of discount for services rendered to the assessee. Therefore, none of these decisions relied on by the assessee applies to the facts of this case which is payment of commission by way of discount for services rendered by the distributor. Senior counsel for the assessee has in support of his contentions relied on the following decisions of the Supreme Court also, ADDITIONAL COMMISSIOENR OF INCOME TAX V. SURAT ART SILK CLOTH MANUFACTURERS ASSOCIATION reported in (1980) 121 ITR 1, KEDARNATH JUTE MANUFACTURING CO. V. COMMISSIONER OF INCOME TAX reported in 82 ITR 363, COMMISSIONER OF INCOME TAX V. MOTORS 7 GENERAL STORES (P) LTD. (1967) 66 ITR 692, COMMISSIONER OF INCOME TAX V. AJAX PRODUCTS LTD. (1965) 55 ITR 741, COMMISSIONER OF INCOME TAX V. B.C.SRINIVASA SETTY (1981) 128 ITR 294, TUTICORIN ALKALI CHEMICALS & FERTILIZERS LTD. V. COMMISSIONER OF INCOME TAX (1997) 227 ITR 172 and decisions of House of Lords in INLAND REVNUE COMMISSIONERS V. WESLEYAN GENERAL ASSURANCE SOCIETY reported in (1948) 16 ITR 101 and another decision in REVENUE COMMISSIONERS V. DUKE OF WESTMINSTER reported in (1936) A.C. 1. However, on going through these judgments we do not find an....
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....oner has preferred an Appeal and the matter is now pending before the Hon'ble Supreme Court. 17. It is to be stated that the decision of the Kerala High Court in the case of the petitioner/assessee referred supra was followed by the Delhi High Court and Calcutta High Court. Learned Senior counsel submits that Karnataka High Court has taken a different view. However, as on date in the assessee's own case, the decision of the Kerala High Court supports the stand of the Revenue. In such circumstances, the first respondent while considering the Petition for Stay, took note of the earlier orders for the assessment years 2009-10 to 2011-12, which was on the same issue and pending as Appeal before the Tribunal and in respect of assessment years 2007-08 and 2008-09, it has been affirmedby the Tribunal and in the absence of production of Bank Accounts and fund availability, etc., rejected the Stay Petition. Thus, while applying the three cardinal principles while considering the Stay Petition, the decision in the assesses own case as on date stands concluded in favour of the Revenue. Therefore, to that extent the petitioner has not been able to establish a prima facie case. 18. So....
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....n respect of the anterior period i.e. for 2007-08 and 2008-09, the Tribunal confirmed the order passed by the Commissioner of Income Tax (Appeals), against which the petitioner has preferred Tax Case Appeal Nos.308 & 309 of 2011, which has been admitted by the Hon'ble Division Bench of this Court on 09.09.2011 and an order of interim stay has been granted, subject to the condition the petitioner pays 50% of the demand. 22. Therefore, in my view though the reasoning of the first respondent while rejecting the Stay Petition cannot be faulted in its entirety, but the fact that on the date when the order was passed, the Commissioner of Income Tax (Appeals) ought to have noted that the appeal arising out of the assessment orders for the years 2007-08 and 2008-09, has been entertained by the Hon'ble Division Bench of this Court in TCA No. 308 & 309 of 2011 and appeals have been admitted on 09.09.2011 and interim order has also been granted. 23. This undoubtedly would be a very relevant factor to consider two of the cardinal tests viz. prima facie case and balance of convenience. If the legal issue is now pending before the Hon'ble Division Bench of this Court and order of i....