TaxTMI 
TaxTMI 
TaxTMI 
2017 (10) TMI 244
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.... services like conducting examinations, interviews etc. The services are provided at Kolkata and other cities and locations. The AO while concluding the assessment noticed that as a service provider the assessee would get the work done through third parties and that would be a case of sub-contract. The assessee provided services to an entity by name Merit Trac services Pvt. Ltd (Merit Trac for short) of Bangalore. The assessee has two agreements with the aforesaid party dated 12.07.2012 and 30.04.2012. The main terms of the contract between the assessee and Merit Trac is that the assessee will provide man power for all the recruitment events and all pre and post events as directed by Merit Track. The assessee has to locate the venues as spe....
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....at pages 24 to 78 of the assessee's paper book. The AO after analyzing all the details came to the conclusion that there is a TDS violation in so far as the payment of Rs. 1,18,000/- in respect of payment made for a venue at Nepal and Rs. 86,000/- paid to the principal of an institution at Nepal. Thereafter after getting the reply from the assessee, the AO disallowed the payments of Rs. 1,18,000 for venue charges at Nepal and Rs. 86,000/- paid to the principal of the institution at Nepal because there is violation of section 195 of the Act. In the order of assessment however this has been referred to disallowance u/s 40(a)(ia) of the Act. The following are the conclusions of the AO in the order of assessment :- "5.4. Conclusion & Reliance ....
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....kanagar Rupandehi District Lumbini Zone 19 4500 5730 Public Youth Campus Ward No.4, Kadam Chowk, Janakpur 22 5500 5800 Manipal College of Medical Sciences Deep Heights, Pokhara-16 25 10500 12000 Campion Kathmandu College Ghanapokhari, (Beside Naxal Police Hqrs) Naxal 26 31000 20000 Campion Academy Lagankhel, (Beside Patan Hospital),Lalitpur 26 52000 86000 Campion College Kupondole (Near Room to Read), lalipur 27 35000 20000 All the case laws put forward by AR in his reply deal with domestic payments and in no means is self interpretation of 194C(1) "Any person responsible for paying any sum to any resident .... " and stretch the meaning for payments made to person(s) of Nepal. ....
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....deduction of tax at source. The CIT however did not agree with the contentions put forth on behalf of the assessee. In the reply to the show cause notice the assessee also took a plea that the provisions of section 194C of the Act are not attracted to the payments in question as what the Assessee paid was on behalf of Merit Trac which was reimbursed by them to the Assessee. 6. The CIT however was not satisfied with the reply and he set aside the order of AO in so far as it relates to the payment of Rs. 52,79,366/- as venue charges, payment of Rs. 32,64,500/- to principals of schools and colleges and payment of Rs. 28,07,393/- to examiners. The CIT directed the AO to examine as to whether disallowance u/s 40(a)(ia) of the Act has to be made....
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....DS u/s 194C of the Act on the above mentioned cases (stated at Para-5.2 above). In response, The AR instead of explaining the factual position, submitted an elaborative reply consisting of 9{nine) pages misplacing the interpretation of the statute, exemplifying a Barber's hair cutting with provisions of Section 194C and relying on various court cases his own contention about of the applicability of section 194C read with section 40(a)(ia) of the Act. The reply of AR dated 12-03-2015 is annexed herewith as Annexure-"A" to this order ." 9. The conclusion of the AO after extracting the reply of the Assessee to the show cause notice have already been set out in paragraph-3 of this order and hence not being repeated. It is clear that the d....
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....of the Act, the assessee has specifically highlighted the following aspects :- "From the Order of Assessment it will be evident that the A.O. has made thorough enquiry on the issue of payment of 'Venue Charges', "Payment of Principal' and 'payment to Examiners '. He had issued the Show Cause Notice on the points on 08. 03.2015 and the assessee's reply dated 12.03.2015 was made part of the assessment order itself. In addition to filing reply to Show Cause Notice Your assessee had earlier filed detailed ledger of 'Venue Charges, Payment of Principal. Payment to Examiners and self copies thereof before the A. O. which the A.O noted in Para 5.1 in Page 3 and 4 of the Assessment Order. After thorough examination of t....