Case Law Details
MakeMy Trip (India) Pvt. Ltd. Vs DCIT (ITAT Delhi)
The issue under consideration is whether the Payment Gateway facilities provided by banks are liable for TDS provisions?
In the present case, during the course of assessment proceedings, the AO noted that the assessee has claimed bank charges and payment gateway charges in the P&L Account. AO stated that Np TDS has been deducted on these expense and hence assessee is assessee in default.
ITAT state that, relying on various decisions, it was submitted that neither the provisions of section 194H nor the provisions of section 194J are applicable to the assessee and, therefore, the payment gateway charges are not liable for tax deduction at source either u/s 194H or u/s 194J. After going through the process involved in payment gateway facility, he held that there is no human intervention involved at the time of clearance of the payments through gateway facility. Following the ratio of the decision in the case of Bharti Cellular Ltd. (supra), ITAT held that no technical services within the meaning of Explanation-2 to section 9(1)(vii) of the Act are provided by the banks when the payment is cleared through gateway facility.
Further, ITAT states that identical issue had come up before the Tribunal in assessee’s own case for A.Y. 2009-10 and the Tribunal, vide order dated 26th September 2017, has decided the issue pertaining to non-deduction of taxes on payment gateway charges in favor of the assessee with certain directions/observations. The appeal filed by the Revenue was dismissed by the Hon’ble High Court. Under these circumstances and considering the totality of the facts of the case, ITAT deem it proper to restore this issue to the file of the AO with a direction to decide the issue afresh in the light of the decision of the Tribunal in assessee’s own case for A.Y. 2009-10 and decide the issue as per fact and law.
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