TaxTMI 
TaxTMI 
2015 (11) TMI 1521
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....s and in law in upholding the action of the learned Assessing Officer. 1.1 The learned AO has erred both on facts and in law in treating the business relationship between the company and the distributor as principal to agent as against the actual relationship of principal to principal. The learned Commissioner of Income Tax (Appeals) has further erred both on facts and in law in upholding the action of the learned Assessing Officer. 1.2 The learned AO has erred both on facts and in law in passing an order u/s 201(1) and holding the assessee company to be in default in respect of non-deduction of tax amounting to Rs. 837,842/- u/s 194H on the difference between the distributor's price and sale price of the prepaid card alleging the difference to be in the nature of commission. The learned Commissioner of Income Tax (Appeals) has further erred both on facts and in law in upholding the action of the learned AO. 1.3 The learned AO has erred both on facts and in law in demanding the tax amounting to Rs. 837,842/-, in spite of the fact that the amount has been subject to tax in the hands of distributor. The learned Commissioner of Income Tax (Appeals) has further erred both on fac....
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....t this issue has been dealt with by the Coordinate Bench by allowing these grounds vide para 6 of its order as under:- 6. We have heard the rival contentions of both the parties and perused the material available on the record. Recently this Bench has decided similar issue in the case of Tata Tele Services, which is identical to the assessee's case. The facts of the case has been demonstrated by the AR that the assessee was issuing bill on net amount on MRP has been fixed on prepaid card sold. The assessee has not transferred any income to the distributor but the distributor was allowed to avail the airtime to the extent of MRP price. In books of account, the assessee had credited these receipts on net basis. The finding on the case of Tata Tele Services is reproduced as under:- "2.23. We find merit in the contention of ld. Counsel that there is no jurisdictional high court judgment on this issue. Hon'ble Karnataka High Court Judgment is elaborate, detailed, considers the previous Delhi and Kerala High Court judgment against the assessee and is latest comprehensive adjudication on the issue. Even if it is held that there exist divergence of judicial opinion a view favourable to t....
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....p the Ground No. 2 and 2.1 of the assessee against confirming the addition u/s 194J of the Act for not deducting tax on roaming charges paid by the assessee to other telecom operators. 9. The ld. AR contended that Ground No. 2 and 2.1 in all the appeals are also covered by the order of this Coordinate Bench in assessee's own case (in ITA No. 656/JP/2010 for the assessment year 2009-10.) 10. The ld. DR relied on the orders of the lower authorities but he could not controvert the arguments of the assessee regarding covering this issue by the order of the Coordinate Bench (supra). 11. We have heard the rival contentions and perused the materials available on record. We have gone through the earlier order of the Coordinate Bench in assessee's own case (in ITA No. 656/JP/2010 for the assessment year 2009-10.) and observed that this issue has already been dealt with by the Coordinate Bench by allowing these grounds vide para 11 of its order as under:- ''11. We have heard the rival contentions of both the parties and perused the material available on the record. After going through the order of the Assessing Officer, ld CIT(A); submissions of the assessee as well as going thro....
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....ndis in all the appeals for the assessment year 2005-06 to 2008-09 (ITA Nos. 252 to 256/JP/2013). 15. Ground No. 4 of the assessee is specific to A.Y. 2004-05 to 2006- 07 and pertains to orders passed by the AO being barred by limitation and upholding the same by the ld. CIT(A) for the financial years 2003-04 to 2005-06. 16. The assessee has taken up this ground before the ld. CIT(A) but without any success. The ld. CIT(A) has given his findings at para 5.2 on pages 14 to 16 of his order which is reproduced as under:- ''5.2 I have duly considered the submission of the ld. AR and the material available on records. The time limit for passing the order u/s 201(1) has been provided by the Finance Act 2009 w.e.f. 01-04-2010. The Memorandum explaining the provisions of the Finance Bill 2009 clearly provides that the amendment will apply to such orders passed on or after 01-03- 2010. Hence the provisions of Section 201(3) are applicable to the impugned order. Proviso to sub-section (3) of Section 201 provides that an order u/s 201(1) for a F.Y. commencing on or before 01-04- 2007 may be passed at any time on or before 31-04-2011. Memorandum explaining the provisions of the Finance Bill....
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.... Tribunal has, in a series of decisions, some of which have been mentioned in the order which is under challenge before us, taken the view that four years would be reasonable period of time for initiating action, in a case where no limitation is prescribed. 20. The rational for this seems to be quite clear- if there is a time limit for completing the assessment, then the time limit for initiating the proceedings must be the same, if not less. Nevertheless, the Tribunal has given a grater period for commencement or initiation of proceedings. 21. We are not inclined to disturb the time limit of four years prescribed by the Tribunal and are of the view that in terms of the decision of Supreme Court in Bhatinda Dist. Coop. Mil P. Union Ltd. (supra) action must be initiated by the competent authority under the IT Act, where no limitation is prescribed as in s. 201 of the Act within the period of four years. 25. We may also note that under s. 191 of the Act, the primary liability to pay tax is on the person whose income it is, that is the deductee. of course, a duty is cast upon the deductor, that is the person who is making the payment to the deductee, to deduct tax source but if he....
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....ssing an order on 24-03-2011, well before the due date as prescribed in the proviso to section 201(3) i.e, before 31-03-2011. In light of that, proviso to Section 201(3) is clearly applicable in the instant case and the same has been duly complied with by the AO. Accordingly, the proceedings for the subject years have been duly completed within the prescribed time limit as per section 201(3) read with the proviso and we do not see any infirmity in this regard. 20. Now coming to the arguments of the assessee that Section 201(3) only provides the limitation for completing the proceedings by passing the order and not for initiation of proceedings. For initiation of proceedings, ld. AR drew reference to the decision of Hon'ble Delhi High Court in the case of NHK Japan Broadcasting Corporation 305 ITR 137 which provides that proceedings must be initiated within four financial year from the end of the relevant financial years and submitted that the principles laid down by Hon'ble Delhi High Court should be applied in the instant case. 21. In this regard, it is be noted that legislature has brought in specific limitation provision for the first time in Section 201 w.e.f. 01-04-2....