TaxTMI 
TaxTMI 
2025 (3) TMI 927
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....rpose of booking of tickets in the FCC segment through CRS system and hence, the assessee falls outside the ambit of definition of "e-commerce operator" and not liable to deduct tax under section 194-O of the act, without appreciating the fact that the assessee actively operates and manages the CRS platform after getting rights under SSAs of other entities and performs all primary functions required to enable the rendering of services of ticket booking from passenger to Airline through such platform thus would qualify as an e-commerce operator." b) "On the facts and in the circumstances of the case and law, the Ld. CIT(A) erred in holding that the assessee cannot be treated as an ecommerce operator within the meaning of section 194-O of the Act by citing the case of Asia Satellite Telecommunications Co. Ltd (197 taxmann 263)(Delhi) without appreciating the fact that in the case of Asia Satellite Telecommunications Co. Ltd assessee gave only access to a broadband available from the transponder to its customers, but retained control over the transponder whereas in this instant case the assessee operates or manages the platform with the user access thus would qualify as an e-commerc....
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....ed through e-commerce platform viz. CRS System. It was further observed that the assessee has failed to deduct TDS under section 194-O of the Act for which the ld. AO issued show cause notice u/s. 201(1) and 201(1A) of the Act dated 15.11.2021 which duly was issued to the assessee for non-compliance of TDS provisions as per Section 194-O of the Act for which the assessee is to be treated as "an assessee in default". The assessee is said to have furnished details. The ld. AO not satisfied with the assessee's submission held the assessee to be "an assessee in default" as per Section 194-O of the Act where the assessee was an e-commerce operator which was operating and managing the CRS platform duly recognized by SSA of other entities and computed tax u/s. 201(1) and interest u/s. 201(1A) of the Act aggregating to Rs. 1,12,63,078/- and Rs. 12,21,845/- for the period from 31.10.2022 to 31.03.2021 respectively. 5. Aggrieved the assessee was in appeal before the Ld. CIT(A), challenging the impugned assessment order. 6. The ld. CIT(A) vide order dated 25.09.2023 held that the assessee is merely an agent booking tickets on behalf of its clients using the CRS system for which it has no ri....
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.... chooses the suitable air ticket, the assessee/sub-agent makes a reservation of the air tickets were a PNR is generated for the purpose of tracking details of the booked tickets and the sub-agent sends the PNR to RTT through the CRS system for issuing the air ticket. After this, RTT books a ticket using CRS system for which the sub-agent's account or client's account is debited and the same is credited in BSP IATA account and any discount or commission if eligible is given directly to the client/ sub-agent through the invoice of the sale of air tickets and TDS is also deducted on the commission paid to sub-agent through the same invoice. For this entire process, the CRS system is utilized which the assessee claims to have no exclusive right upon the same neither can the assessee make any alteration or modification to the CRS system, for the reason that the same is not owned, managed or operated by the assessee. The assessee claims that the payment for the tickets can be made to BSP IATA through RTT which pays for the air tickets booked between 1st to 7th of the month to BSP on the 14th of the month or when the ticket is booked on 8th to 14th of the month, the same is paid to BSP on....
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.... India. The ld. AR further contended that the assessee is not an e-commerce operator for the purpose of Section 194-O of the Act, for the reason that the CRS system is never owned, operated or managed by the assessee of which it does not have any control over it and it is only the CRS companies which are liable to deduct TDS @1% as per Section 194-O of the Act. The ld. AR further iterated that the term 'Own', 'Operate and 'Manage' does not apply to the assessee were it neither possess nor has control over it. Further, the ld. Counsel submitted that the assessee is restricted only to using the CRS system which is owned, operated and managed by the assessee companies viz. Amadeus IT Group SA (Amadeus), Interglobe Technology Quotient Pvt. Ltd. (Galileo) and Sabre Asia Pacific Pte Ltd. (Sabre) for the purpose of booking airline tickets for which the assessee is entitled to CRS commission. The ld. AR brought to our attention to the subscriber agreement entered into by the assessee with CRS provider companies for the purpose of corroborating his contentions. The ld. AR relied on various decisions in support of his contentions. 13. On perusal of the rival contentions, the only moot issue....
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....a member of IATA for which it pays annual fee. The payment made to BSP is one single payment which includes all sales pertaining to BSP airlines which in turn makes one consolidated payment to each airline as per the sales made by the agents. The ld. AO held that though payments are made in different modes it all gets credited to the respective airlines. The ld. AO also stated that the CSR companies have not admitted that they are the owners which is operating or managing the platform and neither the assessee nor these companies are accepting the liability of deducting TDS u/s. 194-O and where it was obvious that TDS has not been deducted at any stage. It is also noted that the entire transaction requires planning, coordinating and controlling all the resources which even if the role of assessee fails the entire transaction could not be carried out which impliedly means that the assessee does have the control or management of this platform. The ld. AO held that the assessee is nevertheless an e-commerce operator as well as manager of the platform and having held that the assessee was entitled to deduct TDS as per Section 194-O of the Act, failing which the assessee is said to be 'a....
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....of sale or services or both to the account of an e-commerce participant or at the time of payment thereof to such e-commerce participant by any mode, whichever is earlier, deduct income-tax at the rate of one per cent of the gross amount of such sales or services or both. Explanation.-For the purposes of this sub-section, any payment made by a purchaser of goods or recipient of services directly to an e-commerce participant for the sale of goods or provision of services or both, facilitated by an e-commerce operator, shall be deemed to be the amount credited or paid by the e-commerce operator to the e-commerce participant and shall be included in the gross amount of such sale or services for the purpose of deduction of income-tax under this sub-section. 2) No deduction under sub-section (1) shall be made from any sum credited or paid or likely to be credited or paid during the previous year to the account of an e-commerce participant, being an individual or Hindu undivided family, where the gross amount of such sale or services or both during the previous year does not exceed five lakh rupees and such e-commerce participant has furnished his Permanent Account Number or Aadhaar ....
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.... operators and e-commerce participants which has categorically specified that the e-commerce operator is a person who owns, operates or manages digital or electronic facility or platform for electronic commerce. 17. Here in the present case, there is no iota of doubt that the CRS system is not owned by the assessee and even otherwise as per the subscriber agreement entered into by the assessee Interglobe Technology Quotient Pvt. Ltd. (ITQPL), the assessee shall be provided access to the software system solely for the purpose of using the Galileo system for obtaining information about the schedules, fares, seat availability, etc. and other services and also for making bookings. It also specifies that the Galileo system is owned and operated by the Travelport Global Distribution System B.V. and ITQPL is merely a distributor of Galileo system in India and not an agent of Travelport Global Distribution System B.V. The ITQPL is also entrusted to monitor or test the employees of the assessee and the right to remove or recover the software from the locations in case of any breach is vested with ITQPL. It also narrates the obligation of the assessee and specifies that the assessee cannot ....