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07-01-2020, Inter Globe Aviation, Section 250, 201(1), 194C, Tribunal Delhi

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8 months 2 weeks ago #11957 by amit
Section - 250, 201(1), 194C, 196, 40(a)(i)
Order Date - 07-01-2020
Favouring - Assessee Partly
Court - Tribunal Delhi
Appellant - Inter Globe Aviation Ltd
Respondent - ACIT
Justice - BHAVNESH SAINI JM & PRASHANT MAHARISHI AM
Citation - 120Taxpundit62
Appeal No. - ITA No.4449/Del/2013
Asstt. Year - 2011-12

Order

PER : PRASHANT MAHARISHI, A. M.

1. ITA No. 5347/Del/2012 is filed by the assessee and ITA No. 223/Del/2012 by The Assistant Commissioner of Income Tax, Circle-50(1), New Delhi [ The ld AO ] for AY 2010-11 against the order of the ld CIT(A), XXX, New Delhi [ The Ld CIT (A)] dated 29.08.2012 wherein, the order passed by the ld ACIT, Circle-50(1), New Delhi dated 23.03.2012 u/s 201(1) and u/s 201(1A) of the Income Tax Act, 1961 [ The Act] was partly upheld.

2. We first come to the appeal of the assessee in ITA No. 5347/Del/2012 wherein, following ground of appeal were raised:-

“1. That on the facts and circumstances of the case and in law, the order passed by the Commissioner of Income-tax (Appeals) - XXX, New Delhi („Id. CIT(A)‟) dated August 29, 2012 under section 250 of the Income-tax Act (“the Act”) is erroneous and bad in law to the extent it confirm the order dated March 23, 2012 passed by the Assistant Commissioner of Income-tax, Circle 50(1), New Delhi („Id. AO‟) of holding the Appellant as „assessee in default‟ u/s 201(1) of the Act, for the alleged failure to deduct tax at source under the Act and levying interest u/s 201(1 A) of the Act.

Deduction of tax at source on the Passenger Serv ces Fees (‘PSF’)

2. That the CIT(A) erred on facts and in law in holding the Appellant as an assessee in default‟ under section 201(1) of the Act, for the alleged failure to deduct tax at source u/s 194C of the Act from the PSF - security component, paid to various airport operators/licensor, not appreciating that the said payment did not fall within ambit of that section. V

2.1 That without prejudice, the CIT(A) has erred on facts and in law in not appreciating that the amount of PSF-Security, constitutes payment to Government and is not subject to TDS having regard to the provision of section 196 of the Act.

2.2 That the CIT (A) erred on facts and in law in holding the appellant to be 'assessee in default u/s 201(1) for the alleged failure to deduct tax at source under section 194C of the Act from the amount of PSFfacilitation.

2.3 That the CIT(A) erred on facts and in law in not appreciating that section 194C of the Act had no application in relation to the payment for var ous facilities provided by the airport operator / licensors at the airport to the passengers.

2.4 That without prejudice, the CIT(A) erred on facts and in not appreciating that the appellant being only a facilitator as regards collection and payment of PSF amount, was not required to withhold tax therefrom and the liability to deduct tax at source, if any, was that of the passengers.

2.5 Without prejudice, the CIT (A) erred on facts and in law in holding the Appellant to be „assessee in default‟ u/s 201(1) of the Act, without making any enquiries as to whether or not the respective airport operators/licensors have included the amount of PSF as their taxable income for the subject year and paid tax thereon.

2.6 That the CIT(A) erred on facts and in law in confirming the levy of interest u/s 201 (1 A) of the Act for the alleged failure to deduct tax at source on the respective PSF payments

Deduction of tax at source on Provisions

3. That the CIT(A) erred on facts and in law in confirming the order of the AO holding the Appellant to be an „assessee in default‟ u/s 201(1) of the Act for the alleged failure to deduct tax at source u/s 194J of the Act in respect of the provisions made by the Appellant at the end of the relevant previous year which remain to be utilized / reversed as on the date of the order of the CIT(A).

3.1 That the CIT(A) erred on facts and in law in holding that the provisions remaining to be reversed in the Appellant‟s books were subject to tax deduction at source u/s 194J of the Act, not appreciating that none of the expenses, for which provisions were created, were in the nature of „fees for technical services‟.

3.2 That the CIT(A) erred on facts and in law in not appreciating that provisions created on accrual basis of accounting did not warrant deduction of tax at source since the party to whom the payments were made and the exact sums were not identifiable/quantifiable at the time of making the provision.

3.3 That the CIT(A) erred on facts and in law in levying interest under section 201(1 A) of the Act for the alleged failure of the appellant to deduct tax at source in respect of the aforesaid provisions. Period of levy of interest u/s 201(1 A) of the Act

4. That the CIT(A) erred on facts and in law in confirming the interest levied by the assessing officer u/s 201(1 A) of the Act, for the period beginning from the month in which tax was deductible upto the end of the month in which the return was due to be filed by the deductees, without appreciating that interest under that section, if leviable, was required to be computed only till the end of the relevant previous year.”

3. Revenue has pre erred appeal and has raised the following grounds of appeal:-

“1) Holding that the payment of PSF (passenger Service Fee) made to airport operators are covered u/s 194C and not u/s 194J. As per Section 194J, the nature of payment on account of PSF made to airport operators by the airline companies is technical and, therefore, qualifies for tax deduction u/s 194J considering the two component thereof; Security component and (b) Facilitation component.

2) Admitting the additional evidence in the form of certificates issued by various airport operators to the effect that the PSF received from the assessee has been included in their income while filling Income-tax Return for relevant assessment year, which is in violation to the condition laid down in Rule 46A(1).

3) Holding that liability to deduct tax on the payment with regard to credit card gateway facility fee was that of the bank and not the appellant. The Ld CIT(A) has ignored the Principal-Agent relationship between the assessee and the bank, which is the principle criteria for the applicability of Section 194H of the IT Act.

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