Delhi High Court
Commissioner Of Income Tax (Tds) vs British Airways on 18 April, 2007
Author: V Gupta
Bench: M B Lokur, V Gupta
JUDGMENT
V.B. Gupta, J.
1. By this common judgment, two appeals bearing ITA Nos. 1316 and 1324/2006 filed by the Revenue, arising out of the common order dated 15th July, 2005 passed by the Income Tax Appellate Tribunal (hereinafter referred as "Tribunal") in ITA Nos. 2512-2513/Del/1998 for the assessment year 1994-95 and 1995-96, are being disposed of.
2. The facts in brief are that during the TDS proceedings, the Assessing Officer found that the assessed had made arrangements with hotels for accommodation of its crew members and the Assessing Officer was of the opinion that the assessed was required to deduct tax at source from the rent paid to the hotels. Accordingly, the assessed was required to submit the reasons for not deducting tax at source under Section 194-I of the Income Tax Act, 1961 (hereinafter referred to as Act).
3. Since no reply was filed by the assessed, the Assessing Officer observed that the assessed had no explanation to offer for not deducting tax at source and as such he held that the assessed is in default for not deducting tax at the source, and levied penalties amounting to Rs.58,12,140/- for the financial year 1994-95 and Rs.96,97,823/- for the financial year 1995-96.
4. Aggrieved against the order passed by the Assessing Officer, the assessed filed an appeal before the Commissioner of Income Tax (Appeals) who deleted these penalties on the ground that the assessed had a reasonable cause and was under a bona fide belief that it was not covered by the provisions of Section 194-I of the Act.
5. The Revenue challenged the order of Commissioner of Income Tax (Appeals) before the Tribunal and the Tribunal vide impugned order dismissed the appeals filed by the Revenue relying on its own orders in the case of same assessed for the financial year 1994-95 and 1995-96 in ITA No. 4008-4011/Del/2004 being quantum appeals against order under Section 201(1) and 201(IA) of the Act and deleted the penalties imposed by the Assessing Officer under Section 271-C of the Act on the ground that in the quantum appeals it has been held that the assessed could not be treated to be assessed in default and, therefore, interest charged under Section 201(IA) of the Act was deleted.
6. It has been contended that by the learned Counsel for the Revenue that according to Section 194-I of the Act, the assessed was liable to deduct tax at the source from the rent paid/payable to the hotels.
7. The Commissioner of Income Tax (Appeals) in its order has held that:
The appellant also raised a specific query before the Assistant Commissioner, TDS on 14th July, 1996 seeking information under Section 133(6) of the Income Tax Act that the appellant became aware on enquiry from the Assistant Commissioner that department was taking a view that such payments are subject to deduction of tax at source. The appellant, thereafter made a deduction of tax at source on the very next payment which fell due on 30th April, 1996. Apparently there is no case that the appellant has defaulted thereafter as it would have no interest in not deducting such tax if the view of the Revenue is that such payments will be subjected to deduction of tax at source. It would not have affected the airline in any way had it deducted tax at source from the payments to the hotel so such deduction would not reduce the fund availability of the appellant airline. In this view of the matter the reason advanced for not deducting tax at source appear bona fide.
8. It was further observed by the Commissioner of Income Tax (Appeals) that:
The appellant has furnished a certificate from ITC Ltd. that ITC Ltd. has paid income-tax out of its income for the assessment year 1995-96 and 1996-97 to the credit of the Central Government in respect of income chargeable to tax relation to the payment received from British Airways.
9. The Tribunal vide its impugned order held that:
During the course of hearing before us the learned Counsel for the asssessee pointed out that in the case of the assessed appeals in relation to orders under Section 201(1) and 201(1A) for the same financial years 1994-95 and 1995-96 being ITA Nos. 4008 to 4011(Del)/2004 have been decided by ITAT, Delhi Bench "B", New Delhi, order dated 29.4.2005 and it has been held that the assessed cannot be treated to be assessed in default and no interest under Section 201(1A) also can be charged. Respectfully following the aforesaid order of the Tribunal, we uphold the impugned orders of the learned CIT(Appeals) for these two years and dismiss these appeals filed by the Revenue.
10. It is to be noted that the quantum appeals filed by the Revenue against the order dated 29th April, 2005 passed by the Tribunal in ITA Nos. 4008 to 4011/Del/2004 relevant for the assessment year 1994-95 and 1995-96, have already been dismissed by this Court, vide judgment dated 28th March, 2007.
11. The above being the position, no fault can be found with the view taken by the Tribunal.
12. Thus, the order of the Tribunal does not give rise to a question of law, much less a substantial question of law, to fall within the limited purview of Section 260-A of the Act, which is confined to entertaining only such appeals against the order which involves a substantial question of law.
13. Accordingly, the present appeals filed by the Revenue are, hereby, dismissed.
