ITAT DELHI BENCH ‘G’
Assistant Commissioner of Income-tax (TDS), Circle-Gurgaon
versus
Serco BPO (P.) Ltd.
IT Appeal No. 5003 (Delhi) of 2012
[ASSESSMENT YEAR 2009-10]
Date of Pronouncement – 07.12.2012
ORDER
A.N. Pahuja, Accountant Member
This appeal filed on 21.09.2012 by the Revenue against an order dated 11.07.2012 of the learned CIT(A)-Faridabad, raises the following grounds:-
“1. The Ld. CIT(Appeal) has acted in violation of rule 46A of I.T. Rules in accepting the material and evidences produced by assessee claiming that due taxes relatable to the payment of rent was paid by the deductee i.e. M/s Infovision Information Services Pvt. Ltd., (IISPL) without giving due opportunity of being heard to the AO with regard to such material evidence.
2. Ld. CIT(A) has ignored the provision of Exp. (i) to section 194-I which clearly provides that rent means any payment whatever name called, under any lease sub lease, tenancy or any other agreement or arrangement for the use of land or building which holding that payment made by assessee to IISPL for use of premises was not payment of rent so not liable for TDS u/s 194-I but only reimbursement of rental expenses liable for TDS u/s 194C as there was facility arrangement between assessee and IISPL.
3. Ld. CIT(A) has erred in law & on facts in allowing relief to the assessee relying on decision of Hon’ble Supreme Court in the case of Hindustan Coca Cola Beverage (P.) Ltd. v. CIT [2007] 293 ITR 226 in ignoring that the ratio of this decision is not applicable in this case as M/s IISPL was only a mediator for and not the ultimate recipient of rent and discharging of tax liability by the ultimate recipient of rent has not been examined by the Ld. CIT(Appeal).”
2. At the outset, considering the nature of issue and findings of the ld. CIT(A), the Bench rejected the request for adjournment filed on behalf of the assessee & proceeded to dispose of the appeal after hearing the parties.
3. Facts, in brief, as per relevant orders are that a survey/TDS inspection was conducted in the premises of the assessee on 28.01.2010 for verification of tax deducted at source from payments for contractual work u/s 194C, rental payments u/s 194-I, interest on loan u/s 194 A and professional payments u/s 194 J of the Income-tax Act, 1961 (hereinafter referred to as the Act). The Assessing Officer [AO in short] noticed during the inspection and subsequent proceedings that in the financial year 2008-09, the assessee deducted tax on payments made under facility agreement in terms of provisions of sec.194 C of the Act instead of u/s 194-I applicable in the case . Moreover, there was delay in deducting of tax at source from payments as detailed on page 2 to 9 of the order of the Assessing Officer. Consequently, the AO raised the demand of TDS u/s 201 of the Act beside interest u/s 201(1A) of the Act, as detailed hereunder:
