The Commissioner Of Income ... vs Trans Bharat Aviation (P) Ltd.
2009 Latest Caselaw 2645 Del

*            IN THE HIGH COURT OF DELHI AT NEW DELHI

+                  ITA No. 891/08 & 894/2008

                                                                July 16, 2009
ITA No. 891/08


THE COMMISSIONER OF INCOME TAX-XVII              ...Appellant
                 Through: Ms. Rashmi Chopra and Mr.
                          Chandramani Bhardwaj, Advocates
        VERSUS

TRANS BHARAT AVIATION (P) LTD.                                  ....Respondent

                          Through:

                                      AND

ITA NO. 894/2008


THE COMMISSIONER OF INCOME TAX-XVII              ...Appellant
                 Through: Ms. Rashmi Chopra and Mr.
                          Chandramani Bhardwaj, Advocates

             VERSUS

TRANS BHARAT AVIATION (P) LTD.                                  ....Respondent

                          Through:
CORAM:
HON'BLE MR. JUSTICE A. K. SIKRI
HON'BLE MR. JUSTICE VALMIKI J.MEHTA

    1. Whether the Reporters of local papers may be allowed to see
       the judgment?

    2. To be referred to the Reporter or not?

    3. Whether the judgment should be reported in the Digest?




ITA No. 891/08 & 894/2008                                                Page 1
 %

A.K.SIKRI, J.

1 These appeals have been filed by the Revenue under Section 260-A of the

Income Tax Act questioning the validity of the order dated 31.8.2007 of the

Income Tax Appellate Tribunal (I.T.A.T). By the impugned order, the ITAT

allowed the appeals of the assessee to the extent that it held that the assessee is

not liable to pay the TDS. The ITAT however held the assessee liable for

interest under Section 201(1)(A) of the Act. For the sake of convenience

reference is being made to the facts of ITA 891/2008.

2 The facts are that the assessee is engaged in the business of air taxi

operators. During the course of the verification proceedings, it was found that

the assessee in the year under consideration had made payments to Airport

Authority of India (AAI) in respect of space rent, rent for office space, parking

charges etc at various airports all over India on which no tax was deducted at

source. The Assessing Officer held the assessee was liable to deduct TDS and

since TDS was not deducted, the assessee was held to be in default under

Section 201(1) and also liable for interest under Section 201(1)(A) of the Act.

The CIT(A) sustained the order of the Assessing Officer and which resulted in

filing of the appeal by the assessee before the ITAT, and which as stated above

was partly allowed.

ITA No. 891/08 & 894/2008                                                    Page 2
 3     It has been contended by the counsel for the Revenue that there is no

presumption that though Airport Authority of India (AAI) is a Government

undertaking, it would have paid its taxes and, therefore, the assessee not having

deducted TDS from the payments made to Airport Authority of India (AAI),

the assessee is deemed to be in default. The counsel further vehemently argued

that no presumption can be drawn even if, the AAI is a Government undertaking

that it would have paid its taxes.

4 We note that ITAT has followed the decision of this court in CIT Vs.

Adidas Marketing P.Ltd. in which decision this court held that the assessee who

was obliged to but had not deducted tax at source, would not have asked to pay

the same where the deductee had paid tax on the amount received by him as his

income. The ITAT further noted that since the deductee is a Government of

India undertaking, it cannot be presumed that it has not paid tax. We put it to the

counsel for the appellant as to whether any notice was issued by the Assessing

Officer to the Airport Authority of India (AAI), so that there is no double

taxation, the counsel for the appellant stated that this was not clear from the file.

Similarly, the counsel in reply to the court query also said that there is nothing

on record suggests that any proceedings have been initiated against Airport

Authority of India for not paying its taxes.

6 Another issue which was urged by counsel for the appellant was that the

interest which has been ordered by the ITAT is only till the due date of filing of

ITA No. 891/08 & 894/2008 Page 3 the return of the Airport Authority of India (AAI) wherein it should have been

till the date of actual payment of tax by the Airport Authority of India. The

ITAT in our opinion has rightly held that since Airport Authority of India is a

Government undertaking, the taxes may be presumed to have been paid lastly

by the due date of filing of the return of income and, therefore, the liability of

the assessee to pay interest on the amount which was to be deducted as TDS

ends with the due date of filing of the return by the Airport Authority of India.

8 Accordingly, no substantial question of law arises. The appeals are

accordingly dismissed.

                                                           A.K. SIKRI, J




                                                        VALMIKI J.MEHTA, J


July 16, 2009
ib




ITA No. 891/08 & 894/2008                                                    Page 4