TaxTMI 
TaxTMI 
2018 (9) TMI 226
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....on to the Assessing Officer (AO). The question of law raised is reframed as follows:- "Whether the Tribunal could have adopted the directions issued by the Honourable Supreme Court in a decision where the facts or law therein are not applicable squarely to the facts of the present case? 2. ITA Nos.100, 104, 105, 106 and 107 of 2011 arise from the orders passed under sub-Sections (1) and (1A) of Section 201 of the Income Tax Act, 1961 ('Act' for short). ITA Nos.108, 109, 110, 111 and 112 of 2011 arise from the orders of penalty passed under Section 271C of the Act. The allegation against the assessee was with respect to there being no deduction of tax at source on the various transactions entered into by the assessee in the said ....
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....tervention which alone could lead to the TDS being deducted as has been laid down in Bharati Cellular Ltd. (supra). 4. The learned Standing Counsel, Government of India (Taxes) appearing for the Revenue would submit that the Tribunal ought not to have issued such directions as issued by the Honourable Supreme Court. The Tribunal ought to have first examined whether the facts and law apply and only then could have directed the AO to make an enquiry. It is pointed out that Eli Lilly (supra) arises in a totally different context where there was a dispute as to whether the home salary received by foreigners in their home State in foreign currency was assessable to tax within India as income arising in India. There was a bona fide dispute rai....
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....as any liability on such expatriates; who were at the time residing and working in India, for the amounts they received outside the country. The Honourable Supreme Court found that Section 9(1)(ii) speaks of tax liability on the amount accrued within India and the test to be applied is whether the payments of home salary paid abroad by the foreign Company to the expatriates had any connection or nexus with his rendition of service in India. On facts, it was found that expatriates were working within India for the Indian Company in the said period and were not at all discharging any duties for the foreign Company. On reading Sections 9(1)(ii) and 5(2)(b) it was held that income which falls under the head salaries, if it is deemed to accrue o....
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....ster-servant relationship insofar as the assessee company and the recipient of salary. We are unable to find a broad application of the principles laid down therein to every instance of failure to deduct tax at source. The decision on the scope of Section 271C was also rendered on the peculiar facts arising therein, which was stated so:- "The concept of aggregation or consolidation of the entire income chargeable under the head "Salaries" being exigible to deduction of tax at source under section 192 was a nascent issue. It has not been considered by this court before. Further, in most of these cases, the tax deductor-assessee has not claimed deduction under section 40(a)(iii) in computation of its business income. This is one more....
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....rned Senior Counsel also has a case that even before the present amendment bringing in the proviso to Section 201(1), there was a circular issued by the Central Board of Direct Taxes, which was referred to by the Honourable Supreme Court in (2007) 293 ITR 226 (SC) [Hindustan Coca Cola Beverage P. Ltd. v. Commissioner of Income Tax]. The relevant paragraph is quoted hereunder:- "Be that as it may, Circular No.275/201/95-IT(B) dated January 29, 1997, issued by the Central Board of Direct Taxes, in our considered opinion, should put an end to the controversy. The circular declares "no demand visualized under section 201(1) of the Income-tax Act should be enforced after the tax deductor has satisfied the officerin- charge of TDS, that ....