Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (11) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (11) TMI 989 - HC - Income TaxAssessee in Default u/s 201 - Deduction of TDS u/s 194C instead of u/s 194J - Advertisements put on digital platforms - technical services - order in haste passed before issuing certificate u/s 197 for Nil rate of TDS - payment made to digital platforms such as M/s. Google India Pvt. Ltd. and others - HELD THAT:- In this case, the Adjudicating Authority was of the view that evidence of M/s. Google (I) (P) Ltd., that it had paid the taxes, has not been filed in the appropriate form and manner. In such a case, the authority should ask the party concerned to submit the same in proper form and manner. It is only thereafter that, a view can be taken on the same. The Authorities of the State are not expected to take advantage of a citizen / assessee’s ignorance. So also the technical evidence led is ignored without pointing out why it is not acceptable, by cross examining the technical expert or by leading contrary evidence. It is not open to the Authority to ignore the evidence / submissions made by the party as it is not the object of quasi judicial authority to confirm their prima facie view, but the object is to find the correct facts and thereafter apply the law to those facts and take a decision in terms thereof. It must also be borne in mind that the petitioner had filed its reply as directed by the Court on 9th September, 2019 being the last date to file a representation. The respondent disposed of the same on 9th September, 2019. This in the absence of any statutory obligation or judicial directions to dispose of the show-cause notice by 9th September, 2019 itself. The Authority could take time, consider the submissions and call the party for further hearing before passing the impugned order. Undue haste in passing the impugned orders dated 9th September, 2019 on the part of the respondent no.1 was only with the objective of using these orders declaring the Petitioner is an assessee in default, for the purposes of depriving the petitioner of its right to obtain certificates under Section 197 of the Act at Nil rate of tax deduction to be made by its customers. This is evident from the fact that on 29th July, 2019 when the Court set aside the earlier three orders dated 31st May, 2019 issued under Section 201(1) and 201(1A) the Court had directed the petitioner to make a representation along with supportive material before the respondent no.1 – Income Tax Officer (TDS) within a period of 6 weeks from that date which expires i.e. on or before 9th September, 2019. On the same date, i.e. on 29th July, 2019 this Court had in another Writ Petition had set aside certificates dated 4th June, 2019 issued by the Deputy Commissioner of Income Tax – respondent no.2 under Section 197 of the Act. This inter alia on the ground that they were based upon the orders dated 31st May, 2019 issued under Section 201 and 201(1A) of the Act. The Court held that the orders dated 31st May, 2019 are set aside and the respondent no.1 will re-examine the issue and determine the rate of income tax to be deducted by the petitioner’s customers while making payment to the petitioner. The aforesaid exercise had to be done within 4 weeks from 29th July, 2019. We are also unable to comprehend why the undue haste on the part of the respondent No.1 in passing the order under Section 201 and 201(1A) of the Act. This for the reason that even if the tax deduction certificates were issued under Section 197 of the Act before an order was passed under Section 201(1) and 201(1A) of the Act, it was always open to the Revenue to cancel the earlier tax deduction certificate issued under Section 197 of the Act and issue fresh tax deduction certificates, in view of the orders under Section 201(1) and (1A) of the Act. Thus, the entire proceedings leading to the impugned orders dated 9th September, 2019 are vitiated for breach of natural justice and needs to be set aside. Dis-allowance made under Section 40(a)(ia) - the requirement to deduct tax at the time of credit in the books of accounts i.e. even before the payment is made, is not suffering from breach of natural justice not having considered the Petitioner’s submissions. However, as the impugned orders were passed in undue haste, in the absence of sufficient consideration being given to Petitioner’s submission. We see no reason to split the impugned orders in two parts so as to relegate the petitioner to file an appeal in respect of dis-allowance under Section 40(a)(ia) and on the other issues entertain the Petition.
|