TMI Blog2016 (10) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... of the fact that any exemption for the deductor not to deduct tax in terms of Rule 28AA has to be considered by the competent authority. As far as Ext.P6 is concerned, it is with reference to the application submitted by the petitioner for exemption of payment of tax for the year 2009. Substantial change has now been made in Rule 28AA so far as assessing officer is entitled to issue a certificate if the tax liability of person justify deduction of tax at lower rate and no deduction of tax could be made. The earlier restriction imposed under Rule 28AA has been taken away by the present amendment. Under such circumstances, it is for the petitioner who is involved in such transactions to approach the assessing officer concerned and seek for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97(1) to the petitioner. (iv) declare that the provisions of Rule 28AA are inconsistent and ultravires the Act and are therefore liable to be struck down. 2. As far as vires of Rule 28AA of the Income Tax Rules, 1961 (hereinafter referred to as 'the Rules') is concerned, the Rule has already undergone substantial changes w.e.f 01/04/2011. The present rule reads as under: 28AA. Certificate for deduction at lower rates or no deduction of tax from income other than dividends (1) Where the Assessing Officer, on an application made by a person under sub-rule (1) of rule 28 is satisfied that existing and estimated tax liability of a person justifies the deduction of tax at lower rate or no deduction of tax, as the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) The certificate referred to in sub- rule (4) shall be issued direct to the person responsible for deducting the tax under advice to the person who made an application for issue of such certificate. (6) The certificate for deduction of tax at lower rate shall be issued to the person who made an application for issue of such certificate, authorising him to receive income or sum after deduction of tax at lower rate. Therefore, there is no necessity to consider the vires of the Rules 3. The petitioner claims to be engaged in the business of purchase of Satellite TV broadcast/exhibition right of cinematographic film. It is stated that they normally enter into agreements that TV channels for exhibiting the cinematography films. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... formation concerning technical, industrial, commercial or scientific knowledge, experience or skill; (iva) the use or right to use any industrial, commercial or scientific equipment but not including the amounts referred to in section 44BB; (v) the transfer of all or any rights (including the granting of a licence) in respect of any copyright, literary, artistic or scientific work including films or video tapes for use in connection with television or tapes for use in connection with radio broadcasting, but not including consideration for the sale, distribution or exhibition of cinematographic films; or (vi) the rendering of any services in connection with the activities referred to in sub-clauses (i) to (iv), (iva)and (v) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 197 can be obtained each year subject to the satisfaction of the conditions prescribed. 6. Learned counsel for the petitioner placed reliance on the judgment of the Madras High Court in K.Bhagyalakshmi v. The Deputy Commissioner of Income Tax, Media Circle-I [(2014) 265 CTR(Mad) 545] wherein while considering a similar factual situation regarding transfer deed executed by the copyright purchasers, the Madras High Court while considering the question whether the payments made by the appellant would tantamount to royalty, held at paragraphs 14 and 15 as under: 14. It has to be seen as to whether the transfer effected in favour of the assessee would fall within Section 9(1) r/w Explanation (2)(v) of the Act. Clause (vi) to Expla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve rights including theatrical rights owner. The assessee was also entitled to assign the said rights, which was transferred in their favour. Further the agreement was irrevocable and shall remain in force for a period of 99 years. In such a factual situation the nature of transaction, being a perpetual transfer for a period of 99 years, would undoubtedly fall within the scope of sale. 7. Judgment in K.Bhagyalakshmi (supra) has been followed by another Division Bench in S.P.Alaguvel v. The Deputy CIT, Media Circle-1, Chennai as per judgment dated 21/07/2014. I do not think that this Court should delve into the merits of the contentions urged especially on account of the fact that any exemption for the deductor not to deduct tax in te ..... X X X X Extracts X X X X X X X X Extracts X X X X
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