M/s. Wipro Limited Vs ACIT (ITAT Bangalore)
In this case relief was allowed by learned CIT (A) in respect of levy of surcharge and cess by directing the AO that surcharge and cess should be levied only in the cases where the non resident vendors are residents of countries with which DTAA allows withholding rate of more than 11.33%. This is the case of the department that in respect of royalty payment to those countries also for which DTAA prescribes withholding tax rate of 10%, surcharge and cess should be levies because no proof is brought on record by the assessee about proof of residency of those parties in those countries. In this regard, we find that in Para 13 of the impugned order, it is stated by CIT (A) that the assessee has submitted the details regarding software payments, name of vendor, country of vendor and amount paid and he has also stated in the same Para that he has gone through the details carefully. He has noted in the same Para that it was claimed by the assessee before him that withholding tax rate for payment of royalty to all countries in dispute except Greece is 10% but he has held that this claim is not correct and he has noted the withholding tax rate on payment of Royalty in respect of USA, UK, Austria, and Canada is 15% and the same for Spain is 20%. This shows that learned CIT (A) has not accepted the claim of the assessee without examination and verification. Hence, if this is the contention of the revenue that the vendors of Ireland, Netherland, Singapore, Israel, France, Germany, Australia and Belgium etc. are not residents of respective countries, the revenue should have brought on record some evidence in this regard. In the absence of any evidence even in one case that the vendor of a country of 10% withholding tax rate is in fact resident of some other country having higher withholding tax rate, we do not find any reason to interfere in the order of CIT (A). This Ground is also rejected.
FULL TEXT OF THE ITAT JUDGEMENT
ITA Nos.1215 to 1220/ Bang/2014 These are appeals arising out of the common order passed by the CIT(Appeals) on the following grounds:-
“1. That the order of the learned Commissioner of Income-tax (Appeals) [hereinafter referred to as “the CIT(A)”] in so far as it is against the appellant is against law, facts and circumstances in the case of the appellant.
2. The notice, proceedings and order are all bad in law, without jurisdiction and invalid.
3. That the appellant denies the liabilities u/s 201(1) and 201(1A) of the Act.
4. The CIT(A)/A0 erred in declaring the assessee as in default u/s 201(1) of the Act.
5. That the order passed u/s 201(1) and 201(1A) of the IT Act is without jurisdiction, not as per law and barred by limitation, hence requires to be cancelled.
6. The CIT(A) erred in confirming the order passed u/s 201(1) & 201(1A) even after noticing that a single order was passed for multiple assessment years which is not as per law, hence requires to be cancelled.
7. That the orders of the CIT(A) /AO are liable to be cancelled as they are passed in gross violation of judicial discipline inasmuch as even the judgment of the jurisdictional High Court in appellant’s own case, which upheld the appellate orders for the earlier years involving similar facts, has been disregarded.
8. That the CIT(A) merely carried out an academic exercise of analyzing various Explanations, clauses under section 9(1)(vi) of the Act, provisions of Double Taxation Avoidance Agreements and judicial decisions without actually specifying the charge having regard to the facts and circumstances in the appellant’s case.
9. That the Learned CIT(A) erred in confirming the liability against the appellant contrary to the provisions of the I T Act and also DTAA.
8. That the CIT(A) erred in sustaining the order passed by the AO by upholding that payments made for purchase of software licenses, are royalty payments both under section 9(1)(vi) the Income-tax Act, 1961 and as per relevant DTAA, exigible for deduction of tax at source.
9. That the learned CIT(A) / AO erred in fastening a liability on the appellant u/s 201(1) and 201(1A) based on Explanation 4 to section 9(1)(vi) of the Act which has been inserted by the Finance Act, 2012 w.r.e.f. 1-6-1976.
12. That the learned CIT(A) / AO failed to appreciate that there cannot be retrospective default in the matter of tax deduction at source on the basis of retrospective amendment, hence on this ground alone the order requires to be cancelled.
13. For the above and other grounds and reasons which may be submitted during the course of hearing of this appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered.”
A common order was passed by the CIT(Appeals) in ITA Nos.173 to 178/Intl. Taxn./CIT(A)-IV/2012-13. Feeling aggrieved by the common order passed by the CIT(A) u/s. 201(1) & 201(1A) dated 30.11.2014 for the assessment years 2007-08 to 2012-13, these six appeals are filed by the assessee before the tribunal. The year wise details of the demand were as under:-
