TMI Blog2023 (7) TMI 240X X X X Extracts X X X X X X X X Extracts X X X X ..... -I of the Act and not under section 194-C of the Act. Period of limitation for proceedings u/s 201(1) - The period of limitation for proceedings under Section 201(1) of the Act is provided under Section 201(3) of the Act wherein a period of seven years has been prescribed. The said time period has expired and no further proceedings should be commenced or lie. Respondents be directed to clarify that in the abovementioned circumstances, no further proceedings shall be taken out by them against Petitioner no. 1 or its members or their charter party clients for any alleged failure in deducting tax at source for the period being Financial Years 2006-07, 2007-08, 2008-09 and 2009-10. - WRIT PETITION NO.400 OF 2007 - - - Dated:- 30-6-202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of such sum as income-tax on income comprised therein. . . Explanation III: For the purposes of this section, the expression work shall also include a) ..; b) ..; c) carriage of goods and passengers by any mode of transport other than by railways; d) (c) Subsequent to the inclusion of Explanation No. III, Charterers were making charter hire payments to Ship Owners after deduction of tax under section 194-C of the Act at the rate of 2.244% on the sum payable under the charterparty and Respondents have been accepting such deductions under the same provision. (d) Section 194-I of the Act was also on statute which provided that tax was deductible at source on the pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consequent thereto, Section 194-I of the Act was applicable to all such contracts. Petitioner No.1 also received a letter from the Commissioner of Income Tax, T.D.S. Mumbai, advising that the vessel hire charges would attract T.D.S. under section 194-I of the Act. (f) Respondents, by a communication dated 19th February 2007 addressed to Petitioner no.1, advised Petitioner no.1 to educate their members to treat the payments under charterparties as rent and deduct tax at source under Section 194-I of the Act @ 22.4% and not under Section 194-C of the Act. This advice is based on some decision taken by higher authorities in the Income-tax Department. (g) It was the case of Petitioners that the position of Respondents, i.e., payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 2007. Subsequently, Section 194-I was once again amended by the Finance (No.2)Act, 2009, with effect from 1st October, 2009 ( 2009 IT Amendment ) whereby the rate of tax required to be deducted at source was revised to 2% for the use of any plant or machinery or equipment. The new provision as amended states as follows: 194-I. Rent Any person, not being an individual or a Hindu undivided family, who is responsible for paying to a resident] any income by way of rent, shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rate of- (a) two per cent. for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 194-C of the Act. (l) This Petition predominantly relates to the periods from 2006 to 2009 for which periods members of Petitioner no.1 have filed their tax returns and have paid their taxes and tax assessments have been completed, considering the tax deducted at source for the said time period covered by this Petition and no further tax remains to be paid. No further proceedings in relation to the said years can now be initiated by Respondents. Pursuant thereto, the tax, payable, if any, by Petitioners or any of them must by now reached finality and there should be no tax payable as on date. In this regard, reliance was placed on the decision of the Supreme Court in Hindustan Coca Cola Beverage P. Ltd, vs. CIT 293 ITR 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the period being Financial Years 2006-07, 2007-08, 2008-09 and 2009-10; (b) On such clarification from Respondents, nothing will survive in the instant petition and the petition may be treated as disposed. 2. We have to note that in the order dated 29th June 2007 passed in Chamber Summons No. 183 of 2007 in this writ petition, this court had prima facie expressed a view that the members of petitioner no. 1 are entitled to exemption certificate under Section 197 of the Income Tax Act 1961 (the Act) for deduction be made under Section 194C of the Act for the year ending 31st March 2008. Respondents had challenged this order in the Apex Court and the Apex Court, vide its order dated 14th January 2009, directed this petition be e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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