Case Law Details

Case Name : DCIT (TDS) Vs M/s. Rediff. Com. India Ltd. (ITAT Mumbai)
Appeal Number : I.T.A. No. 5497/Mum/2017
Date of Judgement/Order : 13/03/2019
Related Assessment Year : 2012-13
Courts : All ITAT (6387) ITAT Mumbai (1910)

DCIT (TDS) Vs M/s. Rediff. Com. India Ltd. (ITAT Mumbai)

The dispute with regard to the nature of payment made for purchase of software was settled at rest only by Finance Act 2012 through which Explanation-4 was added to Sec. 9(1)(vii). Although the said amendment was given retrospective effect, legal maxim, lex non cogit ad impossibillia, meaning thereby that the law cannot possibly compel a person to do something which is impossible to perform.

As mentioned elsewhere, the amendment was given a retrospective effect but by that time the assessee has already done the transactions without deducting tax at source. On these facts, the assessee cannot be held to have violated the provisions of Sec. 194J of the Act.

FULL TEXT OF THE ITAT JUDGEMENT

1. Aforesaid appeal by revenue for Assessment Year [in short referred to as ‘AY’] 2012-13 contest the order of Ld. Commissioner of Income-Tax (Appeals)-60, Mumbai, [in short referred to as ‘CIT(A)’], Appeal No.CIT(A)-60/IT-31/ITO(TDS)RG.3(4)/2014-15 dated 20/06/2017 qua deletion of certain addition u/s 201(1) / 201(1A). The assessee was engaged in the business of providing online news, information, communication, entertainment and shopping services.

2. The genesis of the same lies in order u/s. 201(1) / 201(1A) dated 28/02/2014 for AY 2012-13 passed by Ld. Assistant Commissioner of Income Tax (TDS)-3(2) wherein it transpired that the assessee failed to deduct tax at source [TDS] on payment of Rs.13.81 Crores representing payment for Data Line Charges as per the provisions of Section Although the assessee defended its stand vide reply dated 11/02/2014, inter-alia by contending that the provisions of Section 194J were not applicable to such payments and secondly, the payee had offered the aforesaid receipts in their respective return of income, however, not convinced, Ld. AO, treating the assessee as assessee-in-default, raised a TDS demand of Rs.138.17 Lacs u/s 201(1) and corresponding interest demand u/s 201(1A) for Rs.41.75 Lacs.

3. The first appellate authority deleted the same by relying upon the decision of this Tribunal rendered in assessee’s own case for AYs 2010­11 & 2011-12. Although Ld. Departmental Representative supported the view of Ld. AO, however, failed to demonstrate any distinguishing feature in the Impugned AY. No contrary judgment has been placed on record.

4. Upon perusal of Tribunal’s order ITA Nos. 3116-17/Mum/2014 dated 04/11/2015, we find that the matter has been concluded in assessee’s favor by making following observations: –

“6. We have carefully perused the orders of the authorities below. In our considered opinion, the dispute with regard to the nature of payment made for purchase of software was settled at rest only by Finance Act 2012 through which Explanation-4 was added to Sec. 9(1)(vii). Although the said amendment was given retrospective effect, legal maxim, lex non cogit ad impossibillia, meaning thereby that the law cannot possibly compel a person to do something which is impossible to perform.

6.1. As mentioned elsewhere, the amendment was given a retrospective effect but by that time the assessee has already done the transactions without deducting tax at source. On these facts, the assessee cannot be held to have violated the provisions of Sec. 194J of the Act. Our view is fortified by the decisions of the Tribunal in the case of Channel Guide India Ltd. Vs ACIT 139 ITD 0049 and Rich Graviss Products (P) Ltd. 166 TTJ 329 and also by the decision in the case of New Bombay Park Hotel Pvt. Ltd Vs ITO in ITA No. 7641/M/2011. Respectfully following the decisions of the Coordinate Bench (supra), we do not find any reason to interfere with the findings of the Ld. CIT(A).”

The first appellate authority has provided relief to the assessee by placing reliance on this decision of the Tribunal. Therefore, no infirmity could be find in the same.

5. The appeal stands dismissed.

Order pronounced in the open court on 13th March, 2019.

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