TaxTMI 
TaxTMI 
2018 (11) TMI 786
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....ant as a assessee in default u/s 201(1) and 201 (LA) of the I.Tax Act 1964 for not deducting the tax u/s 194J of I.T.Act 1961 on payment made by appellant to the seafarers. 2. The Ld. CIT (A) has failed to appreciate that it is the Shipping Company who are taking the benefit of the services the seafarers, they are the only party who has engaged the seafarers and the appellant does not come in the picture at all. 3 . The Ld. CIT (A) has failed to appreciate that as per the requirement of manpower of SCI, the appellant engages the manpower for which tripartite agreement is entered between SCI, the concerned person and the appellant and as such in such a situation provisions of section 1 94C are applicable for the purpose of deducting th....
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....ucted tax at the rate of 1% from the wages paid to the crew. In order to verify the correctness of tax deduction payment thereof a survey u/s.133 of Income Tax Act was conducted. Consequent upon survey in the assessment proceedings it was observed by the AO that the assessee is liable to deduct tax u/s.192 from the wages. He observed that allowances and bonus paid of Rs. 11,49,60,003/- to the employees recruited, appointed and deputed to perform duties of the respective post in the vessels of the Shipping corporation of India effected by the assessee firm is not correct as they are the wages, allowances and bonus paid to employees and there exists employer-employee relation as stated above. Since, the assessee has not done so, the assessee ....
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.... the responsibility to comply with the Income tax provisions is placed upon the assessee. The articles of agreement for employment of seafarers have been issued by the shipping company directly to the employees. 5. In our view, the nature of relationship between the assessee and shipping company, between the shipping company and seafarers and between the assessee and seafarers have to be determined first, which will in turn would help in determining the nature of liability under the Income tax Act. The nature of relationship could be determined by examining whole gamut of activities along with the agreements and other documents. A perusal of the orders passed by the tax authorities would show that they have not determined the nature of rela....