TaxTMI 
TaxTMI 
2024 (5) TMI 540
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....sue TDS Certificate for the amount of Rs. 2,90,32,000/- deducted as Income Tax @ 2% from the bills raised by the Petitioner towards supply of materials to the Respondent JBVNL so as to enable the Petitioner to get the tax credit of the said amount under Income Tax laws; or in alternative. ii. In the alternative to prayer (i), for the issuance of an appropriate writ/order/direction or a writ in the nature of mandamus directing the Respondent JBVNL to forthwith release the amount of Rs. 2,92,32,000/- so deducted from the bills of the Petitioner towards supply of materials by the Petitioner to the Respondent JBVNL as despite various requests made by the Petitioner, the Respondent JBVNL has neither released the aforesaid amount till date nor TDS certificate under Income Tax law has been issued by the Respondent JBVNL in order to entitle the Petitioner to take TDS credit of the aforesaid amount. iii. For the issuance of any other appropriate writ (s) or direction(s) or order(s) as this Hon'ble Court may deem fit and proper in view of the facts and circumstances of the case for doing conscionable justice to the Petitioner. 2. The petitioner-Firm is registered under t....
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....the following stand in its counter-affidavit: 5. That it is stated and submitted with regard to the statements made in the paragraph-1 to the writ petition under reply that the writ application, in which the petitioner prays for relieves in Point Nos. I. ii, iii and iv, are not acceptable in light of the following facts cited hereunder: Initially JBVNL was not deduction TDS on I. Tax on payments made against Supply of Materials. On dated 10.08.17, Income Tax Department conducted a survey at JBVNL and issued a notice under section 201 of I. Tax act, 1961 vide ref no. DCIT/RAN/TDS/2017-18/177 Dt 04.09.17. In the said notice department opined that the contract is for all works including supply of materials which cannot be considered as mere supply of materials being a separate contract is there for supply portion. Rather the contractor is purchasing the materials for using it for the contract. They considered it as a composite contract. After hearing, the department issued a demand notice vide their memo no. 607 Dt 10.10.17 to deposit amount of TDS alongwith interest for Rs. 36,63,51,685.00. Later on after submission of request the said demand was revised to....
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....rate at which the tax has been deducted and such other particulars as may be prescribed. Sections 201 and 203 of the Income Tax Act provide as under: 201. Consequences of failure to deduct or pay.-(1) Where any person, including the principal officer of a company,- (a) who is required to deduct any sum in accordance with the provisions of this Act; or (b) referred to in sub-section (1-A) of Section 192, being an employer, does not deduct, or does not pay, or after so deducting fails to pay, the whole or any part of the tax, as required by or under this Act, then, such person, shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax: Provided that any person, including the principal officer of a company, who fails to deduct the whole or any part of the tax in accordance with the provisions of this chapter on the sum paid to a resident or on the sum credited to the account of a resident shall not be deemed to be an assessee in default in respect of such tax if such resident- (i) has furnished his return of income under Section 139; (ii) has taken ....
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.... under sub-section (1) deeming a person to be an assessee in default for failure to deduct the whole or any part of the tax from a person resident in India, at any time after the expiry of seven years from the end of the financial year in which payment is made or credit is given. (4) The provisions of sub-clause (ii) of sub-section (3) of Section 153 and of Explanation 1 to Section 153 shall, so far as may, apply to the time limit prescribed in sub-section (3). Explanation.-For the purposes of this section, the expression "accountant" shall have the meaning assigned to it in the Explanations to sub-section (2) of Section 288. "203. Certificate for tax - (1) Every person deducting tax in accordance with the foregoing provisions of this Chapter shall, within such period as may be prescribed from the time of credit or payment of the sum, or, as the case may be, from the time of issue of a cheque or warrant for payment of any dividend to a shareholder, furnish to the person to whose account such credit is given or to whom such payment is made or the cheque or warrant is issued, a certificate to the effect that tax has been deducted, and specifying the amount ....
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....ime specified in the corresponding entry in column (4) of the said Table:- TABLE Sl.No. Form No. Periodicity (1) (2) (3) 1. 16 Annual By 15th day of June of the financial year immediately following the financial year in which the income was paid and tax deducted 2. 16A Quarterly Within fifteen days from the due date for furnishing the statement of tax deducted at source under rule 31A. 9. Section 271-C of the Income Tax Act provides that if any person fails to deduct the whole or any part of the tax at source, he shall be liable to pay a penalty. And, section 276-B makes punishable the failure to make payment to the credit of the Central Government the tax deducted at source. The provisions under sections 271-C and 276-B lay down as under: 271-C. Penalty for failure to deduct tax at source.-(1) If any person fails to- (a) deduct the whole or any part of the tax as required by or under the provisions of Chapter XVII-B; or (b) pay or ensure payment of, the whole] or any part of the tax as required by or under,- (i) sub-section (2) of Section 115-O; * * * (ii) the * * * proviso to Section 194-....
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.... It was also stated that the Petitioner has not received any credit of the TDS so deducted/retained/withheld by the Respondent JBVNL as it was not reflected in Form 26AS of the Petitioner. Further, it is stated that the Petitioner has already filed Income Tax Return and paid all the Income Tax and therefore, requested the Respondent JBVNL to release the amount held on account of excess TDS collected." 11. In response to the aforesaid statement made by the petitioner-Firm, the following stand has been made by JBVNL: "13. That it is stated and submitted that with regard to the statement made in the paragraph 20 to the writ petition under the reply that the amount as demanded by I. Tax department through demand notice raised as a result of survey was not reflecting in the 26AS of the petitioner which will be deposited with the department with proper return of TDS after outcome of the appeal more fully described in paragraph 1 of this counter affidavit." 12. In our opinion, the demand notice issued to the JBVNL that it committed default in not making TDS deductions cannot cloak the JBVNL with any authority or even an excuse to withhold a certain amount from the ....
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....rect transaction between the Employer and the Contractor, the EXW price is exclusive of all cost as well as duties and tax (viz., custom duties & levies, duties, sales tax/VAT etc.) paid or payable on components, raw materials and any other items used for their consumption incorporated or to be incorporated in the Plant & Equipment. Sales tax/VAT, excise duty, local tax and other levies for the Equipment/items under 'direct transaction' including octroi as applicable for destination site/state are not include in the EXW price. These amounts will be payable (along with subsequent variation if any), by the Employer on the supplies made by the Contractor but limited to the tax liability on the transaction between the Employer and the Contractor. In respect of bought-out finished items, which shall be dispatched directly from the sub-vendor's works to the Project site (sale-in-transit), the EXW price is inclusive of all cost as well as duties and taxes (viz., custom duties & levies, duties, sales tax/VAT etc.) paid or payable and any such taxes, duties levies additionally payable will be to Contractor's account and no separate claim on this behalf will be entertained ....
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....count. Employer shall, however, deduct such taxes at source as per the rules and issue Tax Deduction at Source (TDS) Certificate to the Contractor. 10.7 For the purpose of the Contract, it is agreed that the Contract Price specified in Article 2 (Contract Price and Terms of Payment) of the Contract Agreement is based on the taxes, duties, levies and charges prevailing at the date seven (07) days prior to the last date of bid submission (hereinafter called "Tax" in this GCC Sub-clause 10.7). If any rates of Tax are increased or decreased, a new Tax is introduced, an existing Tax is abolished, or any change in interpretation or application of any Tax occurs in the course of the performance of the Contract, which was or will be assessed on the Contractor in connection with performance of the Contract, an equitable adjustment of the Contract price shall be made to fully take into account any such change by addition to the Contract price or deduction therefrom, as the case may be, in accordance with GCC Clause 31 (Changes in Laws and Regulations) hereof. However, these adjustments would be restricted to direct transactions between the Employer and the Contractor for which the t....
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....aw Pipes Ltd." (2003) 5 SCC 705 the Hon'ble Supreme Court observed that the intention of the parties is to be gathered from the words used in the agreement. In "Mahabir Auto Stores v. Indian Oil Corpn." (1990) 3 SCC 752 the Hon'ble Supreme Court held that the State or its instrumentalities are 'State' under Article 12 of the Constitution and its actions even in commercial transactions must be reasonable, fair and just. In "Mahabir Auto Stores" the Hon'ble Supreme Court further indicated that the requirement of being just, fair and reasonable on the part of the State and its instrumentalities extends in cases where no formal contract has been entered. 17. Any unjust retention of money or property of another shall be against the fundamental principles of justice, equity and good conscience. The unauthorized deductions from the running bills of the petitioner-Firm are patently illegal. Such deductions caused loses to the petitioner-Firm which filed its Income Tax returns but was deprived of Rs. 2,90,32,000/- and thereby suffered business or alteast interest losses. On the other hand, the JBVNL was unjustly enriched and need to restitute the petitioner-Firm. The refund of Rs. 2,90,3....
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....he counter-affidavit, the stand taken by the JBVNL that the aforementioned amount has been retained as "Keep Back Amount" for meeting the future liability under the Income Tax Act, 1961 also seems to be unjustified. As it appears on a cursory glance at the provisions under the Income Tax Act, 1961, once an amount is deducted towards TDS liability the same should have been deposited so that the assessee shall get the benefit thereof in his income tax return. 3. However, on the request of Mr. Sachin Kumar, the learned senior standing counsel for the JBVNL, this matter is adjourned by one week to enable the JBVNL to take a conscious decision in the matter whether or not to deposit the amount of Rs. 2,90,32,000/- deducted from the running bills of the petitioner. 4. For that purpose, this matter shall be posted on 21st March 2024." 20. In response thereof, a supplementary counter-affidavit has been filed stating that in terms of Clauses 10.1 and 10.7 of the General Conditions of Contract whereunder the Contractor is solely and entirely responsible for any taxes including income tax, the JBVNL is empowered to adjust such amount from the price/bills released to the C....