TMI Blog2014 (11) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same - The provisions to make good the short fall in collection of taxes may thus end up being invoked even when there is no shortfall in fact - once assessee furnishes the requisite basic information, the AO can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income - the proviso is clarificatory in nature though it was inserted by the Finance Act, 2007 w.e.f. 01.06.2007 - The nature of the amendment and the purpose which it seeks to achieve make it abundantly clear that it is a clarificatory amendment and would be applicable even in respect of assessment years prior to insertion of the amendment – thus, the matter is remitted back to the AO for fresh adjudication – Decided in favour of assessee. - I.T.A. No. 258, 259 and 260/Del/2011 - - - Dated:- 18-11-2014 - Pramod Kumar AM, and C. M. Garg JM,JJ. For the Appellant : K. C. Kaushik For the Respondent : Satpal Singh ORDER Per bench: 1. These three appeals filed by the assessee are directed ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... complied with. Hon ble jurisdictional High Court, in the case of Jagran Prakashan Ltd Vs DCIT [(2012) 21 taxmann.com 489 All] also has, inter alia, observed as follows: ..it is clear that deductor cannot be treated an assessee in default till it is found that assessee has also failed to pay such tax directly. In the present case, the Income tax authorities had not adverted to the Explanation to Section 191 nor had applied their mind as to whether the assessee has also failed to pay such tax directly. Thus, to declare a deductor, who failed to deduct the tax at source as an assessee in default, condition precedent is that assessee has also failed to pay tax directly. The fact that assessee has failed to pay tax directly is thus, foundational and jurisdictional fact and only after finding that assessee has failed to pay tax directly, deductor can be deemed to be an assessee in default in respect of such tax .. 7. It is thus clear that the onus is on the revenue to demonstrate that the taxes have not been recovered from the person who had the primarily liability to pay tax, and it is only when the primary liabili ty is not discharged that vicarious recovery liability can be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enue can be there only when recipient of income has not paid tax. Therefore, recover y provisions under section 201(1) can be invoked only when loss to revenue is established, and that can only be established when it is demonstrated that the recipient of income has not paid due taxes thereon. In the absence of the statutory powers to requisition any information from the recipient of income, the assessee is indeed not always able to obtain the same. The provisions to make good the short fall in collection of taxes may thus end up being invoked even when there is no shortfall in fact. On the other hand, once assessee furnishes the requisite basic information, the Assessing Officer can very well ascertain the related facts about payment of taxes on income of the recipient directly from the recipients of income. I t is not the revenue s case before us that, on the facts of this case, such an exercise by the Assessing Officer is not possible. It does put an additional burden on the Assessing Officer before he can invoke Section 201(1) but that show Hon ble High Court has visualized the scheme of Act and that s how, therefore, it meets the en d o f justice. 9. As far as levy of inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeals). The Tribunal examined the proviso inserted to Section 194H vide Finance Act, 2007 w.e.f. 01.06.2007. The said proviso reads as under: 194H. xx xx Provided also that no deduction shall be made under this section on any commission or brokerage payable by Bharat Sanchar Nigam Limited or Mahanagar Telephone Nigam Limited to their public call office franchisees. The Tribunal granted the benefit of such amendment to the assessee holding the same to be clarificatory in nature. Such order of the Tribunal is based upon the Income Tax Appellate Tribunal, Pune Bench in ITA No.71 to 77/PN/2009 for the assessment year 2002-2003 and 2008-09 in respect of the assessee herein. Considering the circular dated 12.03.2008 and the instructions dated 08.05.2009, the Tribunal has recorded the following findings: 7. While the aforesaid amendment was stated to be prospective i.e. with effect from 1st June, 2007, it cannot be inferred that so far as prior period is concerned, the stand taken by the Central Board of Direct Taxes is that recoveries for non deduction under Section 194H r.w.s. 201 are to be made for the same. The above extracts from the Board circular would show tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so add that it is only elementary that the circulars issued by the Central Board of Direct Taxes are binding on the assessee only to the limited extent of these circulars being beneficial in nature. In other words, an assessee cannot be saddled with a liability only on the ground that the circular issued by the CBDT holds so. Such a liability has to be supported by the clear provisions of statute. Revenue thus cannot derive any support from reliance on the circulars passed by the CBDT. Such order was followed by Pune Bench of the Tribunal in the assessment years 2006-07 and 2007-08 vide order dated 07.12.2011 as well. Similar view was taken by New Delhi Bench of the Tribunal in respect of assessee s own case for the assessment year 2002-03 in ITA No.3996/D/2004. We do not find that any substantial question of law arises for considerat ion, inter alia, for the reason that the Central Board of Direct Taxes vide circular dated 12.03.2008 has taken a stand that the demands are not to be enforced on BSNL and MTNL offices except in the cases where taxes have been deducted at source but not paid over to the revenue. The proviso is clarificatory in nature though it was inserted by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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