9911796707
TMI Blog2024 (1) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Pharmaceutical Intermediaries. As a registered person under GST laws, the petitioner filed returns periodically. Pursuant to an audit of the petitioner's records, certain discrepancies were noticed and communicated by issuing notices. The petitioner replied to such notices, including the show cause notice under Section 73 of the TNGST Act. Eventually, the orders impugned in these writ petitions came to be issued. 3. In the orders impugned in these writ petitions, other than W.P.No.78 of 2024, three defects were dealt with. The first of those relates to suppression of purchases by not availing of available Input Tax Credit (ITC). The second issue, which is the principal issue, pertains to the payment of performance linked incentives ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in response and to the contrary. By referring to the certificate issued by the Chartered Accountant of the petitioner, learned counsel pointed out that the said certificate demarcates the amounts paid towards salary and incentives as regards the two whole time directors for each of the relevant financial years. Since such demarcation has been made in the certificate, learned counsel submits that deduction of tax at source under Section 192 of the Income Tax Act is not conclusive with regard to whether such payment was for services provided as an employee or towards any other services provided by the said persons. He further submits that the onus is on the petitioner to place on record all relevant documents to convince the assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under Section 192 and not Section 194-J of the Income Tax Act. The deduction of tax under Section 192 is a material fact, but is not conclusive. Ultimately, the test is whether such remuneration was paid towards services provided as an employee of the company or whether services were provided under a contract for service for fees or other consideration. 8. Circular No.140 dated 10.06.2020 clarifies this position by providing as under in clauses 5.1 to 5.3. thereof: "5.1 Once, it has been ascertained whether a director, irrespective of name and designation, is an employee, it would be pertinent to examine whether all the activities performed by the director are in the course of employer-employee relation (i.e. a "contract of service") ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relevant documents. In these circumstances, the impugned orders are not sustainable and are hereby quashed. 10. As a consequence, these matters are remanded for reconsideration by the assessing officer. The petitioner is granted leave to place on record any additional documents with regard to all issues dealt with in the impugned orders. Such documents shall be submitted within ten days from the date of receipt of a copy of this order. Upon receipt thereof, the respondent is directed to consider all materials on record, provide a reasonable opportunity to the petitioner and complete the reassessment within four weeks thereafter. 11. The writ petitions are disposed of on the above terms without any order as to costs. Consequently, connecte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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