Word ‘rent’ means any payment by whatever name called under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land and came to the conclusion that lease money or annual rent is rent within the meaning of section 194-I of the Act.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
Heard learned counsel for the department Sri Gaurav Mahajan and learned counsel for the respondent Ms. Pooja Agarwal.
As the controversy involved in these appeals is identical, the same is being decided by the common order treating the Income Tax Appeal no.63 of 2018 as the leading case.
Income Tax Appeal no.63 of 2018 has been filed by the department under section 260A of the Income Tax Act against the judgment and order of the tribunal dated 23.11.2007 for the assessment year 2011-12. The questions of law sought to be answered are as under:
“1. Whether the tribunal is justified in deleting the penalty of Rs.7,55,18,885/- imposed under section 271-C of the Act being sum equal to amount of tax which the assessee failed to deduct on lease rent and interest paid to Yamuna Expressway Industrial Development Authority amounting to Rs.7,55,18,885/- u/s 194-I, 194-A of the Act?
Whether the tribunal is justified in coming to the conclusion that there was sufficient/reasonable cause as contemplated u/s.273-B of the Act for the assessee’s failure to deduct tax at source without upsetting/reversing the finding recorded by the Assessing Authority in the penalty order passed u/s 271-C of the Act?
Whether in view of the fact that the department has challenged the order of the tribunal dated 31.8.2017 passed in ITAT Nos.4279/Del/2015 to 4281/Del/2015 in appeal u/s.260-A of the Act before this Hon’ble Court, deleting the additions made in the order passed u/s.201(1)/201(1A) of the Act, can the order of the tribunal be sustained?”
The tribunal has deleted the penalty imposed on the assessee giving it the benefit of the provisions of section 273-B of the Act, which provides that in case of a reasonable cause taxguru.in, penalty otherwise, exigible under section 271-C of the Act could not be imposed.
The tribunal came to the conclusion that in the facts of the case, no addition of tax at source could make prior to the year of survey on 24.2.2014 and no other order against the assessee required deduction of tax at source at that time when the assessee made payment of lease rental, was existing.
The judgment of Delhi High Court with regard to lease money being treated as rent was only delivered on 16.2.2017 casting an obligation on the assessee to make deduction of tax at source on these rent also.
Subsequently the Apex Court has also delivered the judgment in the case of NEW OKHLA INDUSTRIAL DEVELOPMENT AUTHORITY (NO.2) VERSUS COMMISSIONER OF INCOME TAX (APPEALS) AND OTHERS reported in (2018) 406 ITR 209 (SC) in which the Apex Court has opined that word ‘rent’ means any payment by whatever name called under any lease, sub-lease, tenancy or any other agreement or arrangement for the use of any land and came to the conclusion that lease money or annual rent is rent within the meaning of section 194-I of the Act.
In view of the above, we are of the opinion that the matter requires fresh consideration by the tribunal. We therefore remand the matter back to the tribunal and the matter remand shall be reconsidered by the tribunal within a period of three months from the date of issuance of a certified copy of this order.
The appeals are thus disposed of finally. No costs.