TaxTMI 
TaxTMI 
2023 (5) TMI 1038
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....peal was called for hearing neither anyone appeared on behalf of the assessee nor was any application seeking adjournment filed. Therefore, in view of the above, we proceed to dispose off the present appeal ex-parte, qua the assessee after hearing the learned Departmental Representative ("learned DR") and on the basis of material available on record. 3. In this appeal, the Revenue has raised the following grounds:- "1. Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in directing the Assessing Officer to delete the disallowance made u/s 40(a)(ia) amounting to Rs. 37,36,72,805/- on account of non deduction of tax on service fees retained by the bank on credit card charges whereas the AO has in the order ....
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....mitted that the payments made by credit/debit cards are more convenient means of payment, to which end, the bank and the merchant establishment have agreed to certain terms and conditions facilitating such credit card payments. The assessee relied on various judicial pronouncements in support of its plea that TDS is not deductible under section 194H of the Act on such payments. The Assessing Officer ("AO") vide order dated 31/03/2016, passed under section 143(3) of the Act did not agree with the submissions of the assessee and held that mode of payment between the assessee and the banks is clearly covered by the provisions of section 194H, as the banks provide credit card facilities to the assessee and for that commission is charged by them....
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....d companies is not subject to the TDS provisions of the Act. The relevant findings of the coordinate bench, in the aforesaid decision, are as under:- "Ground No. 2 to 9. Since all the above grounds raised by the revenue are inter-connected and inter related and pertains to the disallowance under section 40(a)(ia) of the Act in respect of commission on credit card companies paid to various banks for non- deduction of tax at source which was reversed by the CIT(A). As per the facts of the case, during the course of the assessment proceedings, the Assessing Officer disallowed the commission on credit card paid to various banks under Section 40(a)(i) of the Act by holding that the credit card transaction was in nature of commission for pr....
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....ough credit cards is not liable to TDS under section 194H of the Act. This issue has also been decided in favour of the assessee by various Tribunals in the following cases: * Gems Paradise v. ACIT [IT Appeal No. 746 (JP) of 2011, dated 2.2.2012 * Bhandari Jewellers v. ACIT [IT Appeal No. 745 (JP) of 2011, dated 2-2- 2012] * Tata Teleservices Ltd. v. Dy. CIT [2013] 140 ITD 451/29 taxmann.com 261 (Bang.) (para 8) and * Dy. CIT v. Vah Magna Retail (P.) Ltd [IT Appeal No.905 (Hyd.) of 2011, dated 10-4-2012] Respectfully following the decisions cited above, it is held that the commission paid to the credit card companies is not subject to the TDS provisions of the Act. Accordingly the disallowance made by the Assessing Officer canno....