Case Law Details
Pilcom Vs CIT West Bengal (Supreme Court)
Conclusion: Payments made to the Non-Resident Sports Associations represented their income which accrued or arose or was deemed to have accrued or arisen in India. Consequently, assessee was liable to deduct Tax at Source in terms of Section 194E.
Held: Assesse was PAK-INDO-LANKA, JOINT MANAGEMENT COMMITTTEE (PILCOM) which was actually a Committee formed by the Cricket Control Boards/Associations of three countries viz. Pakistan, India and Sri Lanka, for the purpose of conducting the World Cup Cricket tournament for the year 1996 in these three countries. International Cricket Council (ICC) was a non-profit making organization having its Headquarters at London, which controls and conducts the game of cricket in the different countries of the world. These three host countries were required to pay varying amounts to the Cricket Control Boards/Associations of different countries as well as to ICC in connection with conducting the preliminary phases of the tournament and also for the purpose of promotion of the game in their respective countries.During the course of enquiry, it came to the knowledge of tie I.T.O. (TDS) that PILCOM had made payments to ICC as well as to the Cricket Control Boards/Associations of the different Member countries of ICC from its two London Bank Accounts. ITO issued a notice to the Office of PILCOM asking it to show-cause why actions under Section 20(I)/194E would not be taken against PILCOM for its failure to deduct taxes from the payments made by it. PILCOM represented before I.T.O. that the provisions of Sec. 194E would not be attracted. I.T.O. did not agree with the contentions of PILCOM and referred to the provisions of Sec. 115BBA and held that taxes should have been deducted at source from the payments made by PILCOM in accordance with the provisions of Sec 194E. It was held that the obligation to deduct Tax at Source under Section 194E was not affected by the DTAA and in case the eligibility to tax was disputed by the assesse on whose account the deduction was made, the benefit of DTAA could be pleaded and if the case was made out, the amount in question will always be refunded with interest. But, that by itself, could not absolve the liability under Section 194E. In the premises, it must be held that the payments made to the Non-Resident Sports Associations in the present case represented their income which accrued or arose or was deemed to have accrued or arisen in India. Consequently, assessee was liable to deduct Tax at Source in terms of Section 194E of the Act.
FULL TEXT OF THE SUPREME COURT JUDGEMENT
1. This appeal by special leave challenges the Judgment and Order dated 11.11.2010 passed by the High Court1 dismissing Income Tax Appeal No.196 of 2000 and thereby affirming the view taken by the Tribunal2 in I.T.A.Nos. 110/Cal/1999 and 402/Cal/1999 on 04.01.2000.
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