TaxTMI 
TaxTMI 
2018 (4) TMI 1504
X X X X Extracts X X X X
X X X X Extracts X X X X
.....03.2008 8/2010 dt. 16.08.2010 1,34,07,471/- Rs.1,34,07,471 (Sec.78) 2. 50/09 dt. 16.03.09 01.04.2008 to 15.05.2008 9,93,474 Rs.200/- per day / 2 % pm whichever is higher (Sec.76) 3. 513/09 dt. 19.10.09 16.05.2008 to 31.03.2009 29,17,874/- These notices were adjudicated together culminating in a common Order-in-Original No.8/2010-S.Tax/Ch.IV dt. 16.08.2010 (impugned order), which upheld the demand of service with interest as proposed in the SCNs and also imposed penalties under Sections 76 & 78 of the Finance Act, 1994. Hence this appeal. 2. Today when the matter came up for hearing, on behalf of the appellant, Ld. Counsel Shri G. Natarajan made oral and written submissions which can be broadly summarized as under : i) The main activity of the appellant involved entering into agreement with various software companies for undertaking various software related services such as design and development of software, as per the Task Order assigned or the Projects allotted by the clients from time to time. For this purpose, the employees of the appellant would be assigned either to such software companies' premises or to the premises of the ultimate clients, where the actual ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2005 cannot sustain since during that period there was no levy of man power supply agency service. vii) Though part of these services were provided to SEZ units, Commissioner has not considered their submissions on this account and have dismissed their pleas without justification. viii) Ld. Advocate finally submitted that only due to their bonafide belief that the services were not taxable, they had not at all collected any tax from their clients. Therefore, even if the matter is decided against them, he prays that they should be extended the benefit of cum tax benefit and tax liability may be recalculated accordingly. 3.1 On the other hand, Ld. A.R Shri K.P.Muralidharan submits that agreements entered into by the appellants with TCS and Infosys will clearly indicate that services provided were only supply of man power; that appellants were not themselves developing software nor they were exclusively involved in IT services. 3.2 Ld.A.R also relies upon the ratio of the case law in Future Focus Infotech India (P) Ltd.Vs CST Chennai - 2010 (18) STR 308 (Tri.-Chennai) where identical activity provided by the appellants therein had been held to be falling within the scope of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the various clauses in the agreements executed between them and their clients namely TCS and Infosys. We are of the view that not only the wordings of these clauses are to be considered but also how different clauses of the contracts actually operate have to be seen. We find that the appellants are supplying various skilled personnel to TCS and Infosys to work on software projects undertaken by TCS and Infosys from their respective clients. The personnel deputed by the appellants appear to be working at the site of the clients of TCS and Infosys or in the premises of TCS and Infosys. There is no evidence produced before us to indicate that any of the software projects undertaken by TCS and Infosys from their respective clients has been sub-contracted to the appellants or that the appellants are working on any such project on their own. What has emerged clearly is that the appellants have deputed skilled personnel including computer engineers to work under the supervision and control of TCS and Infosys personnel in-charge of projects undertaken by TCS and Infosys. The appellants are getting paid in terms of the man hours for the persons deputed to work under the control and supe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....as no malafide intention on the part of the appellant. He has contended they were under the impression that the said activities would come within the scope of IT services, hence not taxable. For this reason, ld. Advocate has contended that extended period of time would not be invokable. However, we find that the adjudicating authority has addressed this aspect in para-10 of the impugned order, where it has been brought to the fold that appellant had not at all disclosed the receipt of income in respect of the activities done by them in respect of services provided by them in their ST-3 returns. 6.6 The facts came to light only when the department conducted scrutiny of the annual reports, possibly during audit. In such circumstances, the department is fully justified in invoking the extended period of limitation of five years. At the same time, we find merit in the Ld. Advocate's submission that while the demand has been made from 16.6.2005, for the period 1.4.2005 to 15.6.2005 the demand is erroneous since the impugned Manpower Recruitment of Supply Agency Services was made taxable only w.e.f. 16.5.2005. So ordered. 6.7 We also find merit in the plea for grant of cum tax benefit ....