Commissioner Of Income Tax v. Principal Officer Jvvnl

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JAIPUR BENCH, JAIPUR------------------------------------------------------ (1) D.B. Income Tax Appeal No.422/2011 Commissioner of Income TaxVs.Principal Officer JVVNL (2) D.B. Income Tax Appeal No.452/2011 Commissioner of Income TaxVs.Principal Officer JVVNL (3) D.B. Income Tax Appeal No.559/2011 Commissioner of Income TaxVs.Principal Officer JVVNL (4) D.B. Income Tax Appeal No.594/2011 Commissioner of Income TaxVs.Principal Officer JVVNL (5) D.B. Income Tax Appeal No.646/2011Commissioner of Income Tax (TDS)Vs.Principal Officer JVVNL Date of order : 19.10.2016 HON'BLE MR.K.S. JHAVERI,J.HON'BLE MR.MAHENDRA MAHESHWARI,J. Mr. R.B. Mathur, for the appellant. Mr. Sanjay Jhanwar, for respondent. JUDGMENT--------- 1.By way of these appeals, the department haschallenged the judgment and order of the Tribunal wherebythe Tribunal has allowed the appeal of the assessee andhas held that the assessee is not required to deduct TDS.2.While admitting the matter following questions wereframed:- 1. Whether Tribunal was justified in holdingthat the payment made by the assessee in form oftransmission/ wheeling/ SLDC charges were notliable to be deducted at source either underSection 194J or 194C of the Income Tax Act?that the payment made by the assessee in form oftransmission/ wheeling/ SLDC charges were notliable to be deducted at source either underSection 194J or 194C of the Income Tax Act? 2. Whether Tribunal was justified in holding that on the facts found, provisions of Section194J or 194C of the Act are not attracted or inother words, the case of the assessee does notfall within four corners of the twin sections. 3. Whether Tribunal was justified in holdingthat assessee was not liable to pay interestu/s. 201 (1A) of the Act?” 3. Counsel for the appellant relied on the provisions ofSection 194C and 194J which reads as under :- 194C. (1) Any person responsible for paying anysum to any resident (hereafter in this sectionreferred to as the contractor[85]) for carrying outany work[85](including supply of labour forcarrying out any work) in pursuance of a contractbetween the contractor and a specified personshall, at the time of credit of such sum to theaccount of the contractor or at the time ofpayment thereof in cash or by issue of a chequeor draft or by any other mode, whichever isearlier, deduct an amount equal to— (i) one per cent where the payment is being madeor credit is being given to an individual or aHindu undivided family; (ii) two per cent where the payment is being madeor credit is being given to a person other thanan individual or a Hindu undivided family, of such sum as income-tax on income comprisedtherein. (2) Where any sum referred to in sub-section (1)is credited to any account, whether called"Suspense account" or by any other name, in thebooks of account of the person liable to pay suchincome, such crediting shall be deemed to becredit of such income to the account of the payeeand the provisions of this section shall applyaccordingly. (3) Where any sum is paid or credited forcarrying out any work mentioned in sub-clause (e)of clause (iv) of the Explanation, tax shall bededucted at source— (i) on the invoice value excluding the value ofmaterial, if such value is mentioned separatelyin the invoice; or (ii) on the whole of the invoice value, if thevalue of material is not mentioned separately inthe invoice. (4) No individual or Hindu undivided family shallbe liable to deduct income-tax on the sumcredited or paid to the account of the contractorwhere such sum is credited or paid exclusivelyfor personal purposes of such individual or anymember of Hindu undivided family. (5) No deduction shall be made from the amount ofany sum credited or paid or likely to be creditedor paid to the account of, or to, the contractor, if such sum does not exceed [86][thirty] thousandrupees (i) on the invoice value excluding the value ofmaterial, if such value is mentioned separatelyin the invoice; or (ii) on the whole of the invoice value, if thevalue of material is not mentioned separately inthe invoice. (4) No individual or Hindu undivided family shallbe liable to deduct income-tax on the sumcredited or paid to the account of the contractorwhere such sum is credited or paid exclusivelyfor personal purposes of such individual or anymember of Hindu undivided family. (5) No deduction shall be made from the amount ofany sum credited or paid or likely to be creditedor paid to the account of, or to, the contractor, if such sum does not exceed [86][thirty] thousandrupees 194J. (1) Any person, not being an individual ora Hindu undivided family, who is responsible forpaying to a resident any sum by way of— (a) fees for professional services, or (b) fees for technical services[26], [27][or] [(ba) any remuneration or fees or commission bywhatever name called, other than those on whichtax is deductible under section 192, to adirector of a company, or] [(c) royalty, or (d) any sum referred to in clause (va) ofsection28,]shall, at the time of credit of such sum tothe account of the payee or at the time ofpayment thereof in cash or by issue of a chequeor draft or by any other mode, whichever isearlier, deduct an amount equal to [29][ten] percent of such sum as income-tax on incomecomprised therein “ 4. The assessee was bound to deduct TDS in lieu ofservices received by them and for the services receivedby them was liable to pay tax within the meaning ofExplanation 2 to Section 9(1)(vii) of the Act. 5.However counsel for the respondent Mr. Jhanwarcontended that the issue is concluded in view of thefollowing decisions : 1.Commissioner of Income Tax Vs. BhartiCellular Ltd. (2011) 330 ITR 239 (SC), 2.Union of India Vs. Satish Panalal Shah(2001) 249 ITR 221 (SC), 3.Commissioner of Income Tax Vs. Jaipur VidyutVitran Nigam Ltd. D.B. ITA No. 579/2009, HighCourt of Judicature for Rajasthan, Jaipur 4.Commissioner of Income Tax Vs BhartiCellular Ltd (2009) 319 ITR 139 (Del.), 5.Skycell Communications Ltd. and Anr. VsDeputy Commissioner of Income Tax and Ors.(2001) 251 ItR 53 (MAD.), 6.M.S. Jewellery Vs. Assistant Commissioner(ASSESSMENT) Agricultural Income Tax and SalesTax and Anr. (1994) 208 ITR 531 (KER.), 7.CIT vs. Maharashtra State ElectricityDistribution Co. Ltd., (2015) 119 DTR (BOM) 278,8.Commissioner of Income Tax-II and Ors. VsDelhi Transport Ltd. Manu/ DE/ 2199/2015. 6. We have heard learned counsel for the parties. 7.In view of the fact that issue is concluded by decision of Bombay High Court and Delhi High Court andSLP against the same has been dismissed. In that view ofthe matter the issues are required to be answered infavour of the assessee against the department. 8.Consequently, all the appeals are dismissed. A copy of this judgment be placed in each file. (Mahendra Maheshwari),J. (K.S. Jhaveri),J. BM Gandhi/ 72-76