TaxTMI 
TaxTMI 
2017 (8) TMI 238
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....th that part of the judgment which relates to section 201(1) of the Act, 1961. 4. Following substantial questions of law have arisen in these appeals : "1. Whether the Income-tax Appellate Tribunal was justified in holding the assessee, not liable for deduction of tax on the basis of judgment of the Supreme Court in the case of Hindustan Coca Cola Beverage P. Ltd. The facts and circumstances of the case are different in the case of Hindustan Coca Cola Beverage P. Ltd. v. CIT. In that case there was already deduction of tax at source at 2 per cent. under section 194C while the Assessing Officer held it to be at 20 per cent. under section 194. Hence issue was not of deduction or non-deduction but difference of rate of deduction. As per section 194C of the Income-tax Act, 1961, liability of deduction of tax is on payment made by the deductor to the deductee. Positive or negative income is not a determining condition for applicability of TDS pro visions. 2. Whether the Tribunal was justified in restoring issue of applicability of section 201(1) of the Income-tax Act to the file of the Assessing Officer for verification, whether or not the deductee has returned losses for impugned ....
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....b of printing of logo, colour scheme etc. on boarding card, ticket, baggage tag on board their aircraft so that the passengers travelling could know about the company. Hence, SAL has not undertaken any agreement for advertisement activity for and on behalf of the assessee-company and, therefore, section 194C was not attracted. 7. The assessee's representative relied on the Central Board of Direct Taxes' Circular No. 714 dated August 3, 1995 in respect of meaning of term "advertising", explained therein. The assessee's representative thus explained arrangement with regard to payment of subsidy towards passengers fair to SAL, in the nature of facilitation arrangement with them for branding reality project undertaken by the assessee-company. Reliance was also placed on accounting entry made in the books of the assessee as well as SAL. The assessee-company debited the aforesaid payment as : "work in progress" while in account of SAL the amount was credited under the head "passenger revenue". The assessing authority thereafter obtained copy of the original agreement dated March 30, 1995, on June 9, 2008 through representative of the assessee and found payments by the assess....
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....of Dec.2003 31.12.2003 246,533,850 2003-04 1000092JV Being entry of advertisement passed for the month of Jan.2004 31.01.2004 266,269,800 2003-04 2000068JV Being entry of advertisement passed for the month of Feb.2004 28.02.2004 258,448,050 2003-04 3000117JV Being entry of advertisement passed for the month of March 2004 31.03.2004 273,186,450 2003-04 3000120JV Being entry passed for advertisement from April-03 to March-2004 31.03.2004 65,000,000 2,682,214,700 F. Year Voucher Narration of the voucher Voucher Amount in 2004-05 3000201JV Being entry of WIP of SAL PASS in SICCL 31.03.2005 2,787,243,925 F. Year Voucher No. Narration of the voucher as per general ledger Voucher |date Amount in Rs. 2005-06 4000056JV Being amount debited for the month of April, 2005 30.04.2005 274,412,050 2005-06 5000070JV Being amount debited for the month of May, 2005 31.05.2005 296,933,650 2005-06 6000089JV Being amount debited for the month of June, 2005 30.06.2005 322,441,825 2005-06 7000078JV Being amount debited for the month of July, 2005 31.07.2005 381,741,875 2005-06 8000077JV B....
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....-tax (Appeals)-III, Lucknow (hereinafter referred to as the "CIT(A)"). Various appeals in respect of the assessment years 2003-04 to 2007-08 were taken together and decided by a common order dated June 26, 2009. With respect to applicability of section 201 the assessee raised one of the grounds of limitation in respect of orders pertaining to the assessment years 2003-04 and 2004-05. The second ground was applicability of section 194C in the light of agreement dated March 30, 1995 and third ground was that the "assessee in default" cannot be made responsible for payment of tax but only on the amount of tax it had failed to deduct tax at source, at the best liability would have been towards interest and penalty. 10. Question relating to limitation was answered in favour of the assessee relying on NHK-Japan Broadcasting Corpn. v. Deputy CIT [2006] 101 TTJ (Delhi) 292 and the Commissioner of Income-tax (Appeals) held that assessment having not been made within four years it was barred by limitation. With respect to applicability of section 194C, the Commissioner of Income-tax (Appeals) construed agreement in the manner that transactions therein are not in the nature of advertisement,....
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.... this aspect the matter has attained finality since that has not been disputed by the assessee by filing any appeal. 15. The liability to pay interest under section 201(1A) is subject to condition that a person is declared an "assessee in default" and not otherwise. This is the view expressed by the Supreme Court in CIT v. Eli Lilly and Co. (India) P. Ltd. [2009] 312 ITR 225 (SC) ; [2009] 15 SCC 1 following in ITC Ltd. v. CIT (TDS) [2016] 384 ITR 14 (SC). 16. In Hindustan Coca Cola Beverage P. Ltd. (supra) the assessee paid warehousing charges to its owner M/s. Pradeep Oil Corporation and also deducted tax under section 194C. The assessing authority however held that deduction of tax should have been at the rate of 20 per cent. and not 2 per cent. and due to this shortfall in the amount of tax deducted by the assessee, it was an "assessee in default" under section 201 and hence liable to pay interest as also amount of deficit tax. The assessee did not raise any dispute of it being treated as "assessee in default" and also towards liability of interest. It however disputed demand of tax on the ground that warehousing was assessed on its income and tax dues was recovered from it by....
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....e. by deduction or collection at source as envisaged under section 190(1), the charge of payment of Income-tax is on a person, whose income is to be taxed. Section 191 provides that in the case of income in respect of which provision is not made under this Chapter for deducting Income-tax at source and where Income-tax has not been deducted in accordance with the provision of this Chapter, Income-tax shall be payable by the assessee direct. Thus, both the conditions i.e. (i) in the case of income in respect of which provision is not made under Chapter XVII for deducting Income-tax at the time of payment and (ii) in case where Income-tax has not been deducted in accordance with the provisions of Chapter XVII, the Income-tax is payable by the assessee direct. Section 191 thus re-enforces that primarily the liability of payment of Income-tax is on the person, whose income is to be taxed as delineated under sub-section (1) of section 4 and sub-section (2) of section 190. The Explanation to section 191 provides that where a deductor who was required to deduct Income-tax at source does not deduct or after deduction does not pay and where the assessee has also failed to pay such tax dir....