2025 (7) TMI 1055

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....law : (A) Whether in the facts and circumstances, the ITAT has erred in deleting the dis-allowance u/s. 40(a)(i) of the Income Tax Act, 1961 on foreign remittance made to non-residents towards destination sampling charges/ore analysis charges of Rs.10,21,904 for services rendered outside India for non-deduction of tax at source u/s 195 of the Income Tax Act, 1961? (B) Whether in the facts and circumstances, the ITAT is correct in holding that the criterion of the second limb of the exception clause in sec. 9(1)(vii)(b) of the Income Tax Act, 1961 was satisfied in the case of the assessee ? 2. During the pendency of the appeal, the Division Bench of this Court to which one of us, (Nivedita Mehta, J), is a party in Tax Ap....

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.... interpreting clause 3.1(l) to the effect that it excludes appeals arising out of proceedings taken against a deductor for failure to deduct tax at source and recovery of the tax from the payer that was omitted to be deducted. Construing that if there was an obligation to deduct tax at source on a payer in terms of the provisions contained in Chapter XVIIB of the Act and the payer fails to discharge such obligation, it is liable for several consequences. A clear demarcation was noted by the Division Bench in a case whether it would be treated as a Respondent in default for failing to deduct taxes or whether it would be fair who had failed to pay the taxes. This distinction is succinctly made out in the following words : "14. Cou....

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....The present appeals arise out of a composite order of the ITAT for the Assessment Years 2006-07 and 2007-08 and involve the question of taxability of the transaction relating to payments made to Marriott International USA by the Assessee, which was an issue of a recurring nature every year and as such has a cascading effect; thus coming within the exception laid down in the said Instruction no. 3/2011. iv) The Boards' Instruction no. 3/2011 was Superseded by the Board's Instruction no. 5/2014 dated 10th July 2014. However, the appeals filed before 10th July 2014 were saved (vide para 11). The present appeals were filed - TXA no. 47/2014 on 7th May, 2014 and TXA no. 49/2014 also on 7th May, 2014." 5. With the above specif....