TaxTMI 
TaxTMI 
2022 (11) TMI 1414
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....d. Accordingly, the applications stand disposed of. ITA 482/2022 ITA 483/2022 ITA 485/2022 Present Income Tax Appeals have been filed challenging the Order dated 22nd April, 2019 passed in ITA No. 4226/Del/2014 for the Assessment Year 2011-12, Order dated 28th February, 2019 passed in ITA No. 6103/Del/2015 for the Assessment Year 2012-13 and Order dated 23rd July, 2019 in ITA No.1496/Del/2017 for the Assessment Year 2013-14. Learned counsel for the appellant states that the ITAT has erred in holding that the amount retained by the banks/credit card agencies for rendering credit card processing service would not amount to commission within the ambit of Section 194H of the Income Tax Act, 1961 ('the Act'). He states that the ITAT has er....
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.... credit card was used, got access to the internet gateway of the acquiring bank resulting in the realisation of payment. Subsequently, the acquiring bank realised and recovered the payment from the bank which had issued the credit card. HDFC had not undertaken any act on "behalf" of the respondent-assessee. The relationship between HDFC and the respondent-assessee was not of an agency but that of two independent parties on principal to principal basis. HDFC was also acting and equally protecting the interest of the customer whose credit card was used in the swiping machines. It is noticeable that the bank in question or their employees were not present at the spot and were not associated with buying or selling of goods as such. Upon swiping....
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....oods bought/sold. The bank merely provides banking services in the form of payment and subsequently collects the payment. The amount punched in the swiping machine is credited to the account of the retailer by the acquiring bank, i.e. HDFC in this case, after retaining a small portion of the same as their charges. The banking services cannot be covered and treated as services rendered by an agent for the principal during the course of buying or selling of goods as the banker does not render any service in the nature of agency. 17. Another reason why we feel Section 40(a)(ia) of the Act should not have been invoked in the present case is the principle of doubtful penalization which requires strict construction of penal provisions. The said....