TMI Blog2017 (8) TMI 238X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 18-1-2017 - Sudhir Agarwal And Ravindra Nath Mishra-II, JJ. For the Appellant : Alok Mathur For the Respondent : Waseeq Uddin Ahmed JUDGMENT 1. Heard Sri Alok Mathur, learned counsel for the appellant and Sri Waseeq Uddin Ahmad, Advocate for the respondent. 2. All these appeals filed under section 260A of the Income-tax Act, 1961 (hereinafter referred to as the Act, 1961 ) have arisen from common judgment and order dated December 17, 2014 passed by the Income-tax Appellate Tribunal (hereinafter referred to as the Tribunal ) and, therefore, as agreed by learned counsel for the parties have been heard together and are being decided by this common judgment. 3. In fact the Tribunal decided three bunches of appeals pertaining to the assessment years 2003-04 to 2007-08 by a common judgment in which questions relating to sections 201(1), 201(1A) and 271C of the Act, 1961 were raised. In the present appeals we are concerned with that part of the judgment which relates to section 201(1) of the Act, 1961. 4. Following substantial questions of law have arisen in these appeals : 1. Whether the Income-tax Appellate Tribunal was justified in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the assessee. As per agreement, SAL was required to display logo of the assessee on both sides of aircrafts, tickets, boarding passes, baggage tags, newspapers, hoardings, etc. brochures of the assessee are also to be distributed by SAL with its tickets. Under the said agreement, for the assessment year 2007-08, the assessee paid ₹ 400 crores to SAL. The assessee was supposed to deduct tax at source under section 194C on the aforesaid payment made to SAL but as a matter of fact no such deduction was made. The assessing authority, coming to know about this fault on the part of the assessee, issued notice dated May 8, 2008 giving opportunity of hearing to the directors of the assessee to explain reason of non-deduction of tax at source. The representative of the assessee did not accept entering into an agreement for giving publicity to SAL. Against their passenger's ticket sale and in return of subsidy which was provided to SAL, they were entrusted with the job of printing of logo, colour scheme etc. on boarding card, ticket, baggage tag on board their aircraft so that the passengers travelling could know about the company. Hence, SAL has not undertaken any agreement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 30.10.2002 251,906,700 2002-03 11000027JV Being Adv. Exp. debited for the month of Nov. 2002 30.11.2002 239,803,950 2002-03 12000049JV Being Adv. Exp. debited for the month of Dec. 2002 31.12.2002 271,206,000 2002-03 1000037JV Being Adv. Exp. debited for the month of Jan. 2003 31.01.2003 273,355,800 2002-03 2000031JV Being Adv. Exp. debited for the month of Feb.2003 28.02.2003 227,501,250 2002-03 3000133JV Being Adv. Exp. debited for the month of Mar.2003 31.03.2003 218,590,800 2,853,652,350 F. Year Voucher Narration of the voucher as per general ledger Voucher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31.03.2004 65,000,000 2,682,214,700 F. Year Voucher Narration of the voucher Voucher Amount in 2004-05 3000201JV Being entry of WIP of SAL PASS in SICCL 31.03.2005 2,787,243,925 F. Year Voucher No. Narration of the voucher as per general ledger Voucher |date Amount in Rs. 2005-06 4000056JV Being amount debited for the month of April, 2005 30.04.2005 274,412,050 2005-06 5000070JV Being amount debited for the month of May, 2005 31.05.2005 296,933,650 2005-06 6000089JV Being amount debited for the month of June, 2005 30.06.2005 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 1961. Having said so, it held that the assessee is liable to pay the entire amount of tax which it had failed to deduct from payments made to SAL and determined its liability of payment of such tax to the Revenue for the financial years 2002-03 to 2006-07, as under : Financial Payment (Rs.) Rate % Amount of TDS Rate of S.C. Amount of surcharge Rate of E.- Amount of E.Cess Total Amount of TDS default 2002-03 285.37 crores 1.00 2,85,36,523 5.00 14,26,826 - - 2,99,63,349 2003-04 268.22 crores 1.00 2,68,22,147 2.50 6,70,554 - - 2,74,92,701 2004-05 278.72 crores 1.00 2,78,72,439 2.50 6,96,811 2 5,71,385 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es, and held, that from assessee in default , under section 201, the Revenue cannot raise demand to pay amount of tax since, that is the liability of recipient- assessee and not assessee in default . The Commissioner of Income-tax (Appeals) held that the assessee in default in case of such default may be liable to pay interest under section 201(1A) but tax cannot be demanded. Consequently, appeals were allowed against demand of tax raised by assessing authority. 11. The Revenue then came in appeal before Tribunal and by the judgment assailed in these appeals, all the appeals preferred by the Revenue have been dismissed. 12. On the question of demand of tax under section 201(1) for the fault of non-deduction of tax under section 194C, the Tribunal has held that, recipient-assessee, i.e., SAL, if has filed its returns for relevant years declaring loss in all such years and there being no tax liability of recipient-assessee, the present assessee cannot be said to be an assessee in default and section 201(1) would not be attracted. However, this aspect having not been gone into by the assessing authority, the Tribunal has remanded the matter to the assessing authority to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of demand of tax not deducted or short deducted by the assessee under section 194C, whether the same can be realised or demanded from the assessee in default . 18. We find that the questions raised in these appeals stand answered by a the Division Bench judgment of this court in Jagran Prakashan Ltd. v. Deputy CIT (TDS) [2012] 345 ITR 288 (All) wherein question No. 7 was formulated as under (page 303) : 7. Whether against a deductor who fails to deduct the tax at source, the liability of payment of tax can also be fastened against the deductor under section 201 apart from liability of interest and penalty ? 19. The aforesaid question was answered by the court by observing as under (page 339) : The main issue to be answered is as to whether in event, the per son who is responsible to deduct tax at source fails to deduct the tax at source, what are the consequences ? Whether the tax which was required to be deducted at source by such deductor, can also be recovered from the deductor or recovery can confine only to interest and penalty. The Income-tax Act is an integrated Act delineating a scheme for payment of Income-tax. For interpreting the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to any other consequences which he may incur, be deemed to be an assessee in default in respect of such tax. The language of the Explanation to section 191 and sub-section (1) of section 201 is almost similar except with one difference. In Explanation to section 201, the deductor shall be deemed to be an assessee in default where the assessee has also failed to pay such tax directly, whereas in sub-section (1) of section 201, the above condition is not mentioned. While interpreting the provisions of section 191 and sub-section (1) of section 201, a harmonious construction has to be adopted and such interpretation is to be put which gives meaning and purpose to both the provisions. Explanation to section 191 specifically mentions '. . . be deemed to be an assessee in default within the meaning of sub-section (1) of section 201 in respect of such tax'. The above meaning thus has to be read in sub-section (1) of section 201, which has been specifically provided for. Not repeating the said condition again in section 201(1) is inconsequential. Thus, deductor who fails to deduct Income-tax at source shall be deemed to be an assessee in default only when the assessee has also fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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