Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2018 (9) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (9) TMI 226 - HC - Income TaxPenalty u/s 271C - failure to deduct and pay to the Government TDS - Held that:- On the question of hire and rental charges, the learned Senior Counsel points out that the rent on machinery or plant or equipment was introduced first with the Finance Act, 2007 with effect from 1.6.2007. Hence, we are of the opinion that between financial years 2003-04 to 2006-07, there can be no allegation raised of failure to deduct tax at source. For the hire charges and the rental charges are concerned, the issue assumes relevance only for the financial year 2007-08 which has to be looked at. On the question of TDS, the learned Senior Counsel also has a case that even before the present amendment bringing in the proviso to Section 201(1), there was a circular issued by the Central Board of Direct Taxes, which was referred in Hindustan Coca Cola Beverage P. Ltd. v. Commissioner of Income Tax [2007 (8) TMI 12 - SUPREME COURT OF INDIA]. With respect to the payments of uplink charges and backhaul link usage charges, the Tribunal shall examine an expert as produced by the assessee and the Department shall be permitted to cross examine the expert as also produce any further evidence or witnesses on their behalf. The issue shall be decided on the basis of the decision in Bharati Cellular Ltd. [2010 (8) TMI 332 - SUPREME COURT OF INDIA]. It is made clear that there can be no liability on hire charges and camera rental payments for the financial years 2003-04 to 2006-07. The order of the AO as confirmed by the appellate authority is deleted for the said years. The Tribunal shall pass appropriate orders as per the directions issued. The Income Tax Appeals are remanded for fresh consideration as per the directions hereinabove. The rental charges and hire or equipment charges shall be sustained only for the financial year 2007-08, the assessment year of which is 2008-09. However, the assessee shall be given an opportunity to produce sufficient evidence as per the circular aforementioned on which appropriate orders shall be passed on the liability of the assessee.
|