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आदेश/Order
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee contesting the validity of the order dated 30.12.2015 of the Ld. Principal Commissioner of Income Tax, Shimla [hereinafter referred to as ‘PCIT’] exercising his revision jurisdiction u/s 263 of the Income Tax Act, 1961 (in short 'the Act').
The brief facts of the case are that the Ld. CIT(A), from the record of the case, noticed that the assessee had debited a sum of Rs.
ITA No. 44-c-2016 M/s Good Media News (P) Ltd, Shimla. 2 6,36,19,146/- under the head ‘Pay Channel subscription’ in the profit &
loss Account. The Ld. PCIT was of the view that as per the provisions
of section 194C Explanation III of the Act, the assessee was required
to deduct tax at source on the payments made to various TV Channels
which was not done by the assessee. He observed that though the
Assessing Officer had raised a query in this respect to the assessee,
however, the Assessing Officer without proper application of mind
accepted the plea of the assessee that it was not liable to deduct tax at
source on the basis of the decision of the Agra Bench of the ITAT in
‘ITO vs Balkrishan Gupta’ 36 Taxman 518 (2013). The Ld. PCIT
observed that the Assessing Officer ignored the decision of the Hon'ble
jurisdictional High Court of Punjab & Haryana in the case of
‘Kurukshetra Darpans (P) Ltd vs CIT’ 217 CTR 326 dated 3.3.2008
which was applicable to the facts of the case of the assessee, wherein, it
had been held that the payments made to the licensor for obtaining TV
signals for cable TV Network was liable for TDS u/s 194C of the Act.
The Ld. PCIT further observed that the Assessing Officer had also
ignored the observations made by the Auditor in his report, wherein, it
was reported that the assessee had not given any certificate to the effect
that all the payments covered u/s 40A(3) had been made on account of
account payee cheques. The Ld. PCIT held that when the decision of
the Hon'ble jurisdictional High Court was available, the reliance of the
Assessing Officer on the Agra Bench of the Tribunal was wrong and,
ITA No. 44-c-2016 M/s Good Media News (P) Ltd, Shimla. 3 thus, an error had occurred in the assessment order passed by the
Assessing Officer and that the assessment order passed by the Assessing
Officer was also erroneous and prejudicial to the interest of Revenue.
He, accordingly, set aside the assessment order dated 26.11.2014
passed by the Assessing Officer and directed the Assessing Officer to
pass assessment order afresh.
The Ld. Counsel for the assessee before us has submitted that the
Assessing Officer had duly applied his mind as he had raised query
regarding the non-deduction of TDS which was replied by the assessee.
That at the time of assessment, the Assessing Officer had verified the
bills and vouchers etc. and did not find any expenditure liable for
disallowance u/s 40A(3) of the Act. That even the decision of the
Hon'ble Punjab & Haryana High Court in the case of ‘Kurukshetra
Darpans (P) Ltd vs CIT’ (supra) was also discussed in the decision of
the Agra Bench of the Tribunal in the case of ‘ITO vs Balkrishan Gupta’
(supra), therefore, it cannot be said that the Assessing Officer had not
applied his mind. Further, that the view taken by the Assessing Officer
was one of the possible views, hence, the order cannot be said to be
erroneous.
On the other hand, the Ld. DR has relied on the order of the Ld.
PCIT.
ITA No. 44-c-2016 M/s Good Media News (P) Ltd, Shimla. 4
We have considered the rival submissions and have also gone
through the record. After going through the decision of the Agra Bench
of the Tribunal in ‘ITO vs Balkrishan Gupta’ (supra), we find that the
facts of the said case were different from the facts in the case of before
‘Kurukshetra Darpans (P) Ltd vs CIT’ (supra). That the issue before
the Hon’ble Punjab & Haryana High Court in the case of ‘Kurukeshtra
Darpans (P) Ltd vs CIT’ (supra) was a case of Cable Operator engaged
in procuring and giving signals to the customers, whereas, the issue in
the case of ‘ITO vs Balkrishan Gupta’ (supra) was giving packed signals
received from channels i.e. Star TV & others to the cable operators
without modification. We, therefore, raised a specific query to the Ld.
Counsel for the assessee as to the facts of the case of the assessee were
covered by the Agra Bench of the Tribunal in ‘ITO vs Balkrishan Gupta’
(supra) or facts of the case were identical to that of the case of
‘Kurukeshtra Darpans (P) Ltd vs CIT’ (supra), decided by the Hon'ble
Punjab & Haryana High Court.
The Ld. Counsel for the assessee has been fair enough to admit
that the assessee in this case is a cable operator and that the facts of the
case of the assessee were identical to that of the ‘Kurukshetra Darpans
(P) Ltd vs CIT’ (supra) decided by Hon'ble Punjab & Haryana High
Court . In view of this, the decision of the Hon’ble Punjab & Haryana
ITA No. 44-c-2016 M/s Good Media News (P) Ltd, Shimla. 5 High Court (supra) is applicable in the case of the assessee. There was
a wrong assumption of facts and law in this case by the Assessing
Officer because of which he did not make the disallowance u/s 40A(ia)
of the Act. It is also apparent that the Assessing Officer has also ignored
the observations made by the Auditor in his report that the assessee had
not given any certificate to the effect that all the payments covered u/s
40A(3) have been made by account payee cheques.
In view of this, we do not find any infirmity in the order of the Ld.
PCIT in holding that the order of the Assessing Officer was erroneous
and prejudicial to the interest of Revenue. We, therefore, do not find
any merit in this appeal of the assessee and the same is accordingly
dismissed.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the Open Court on 06.08.2019.
Sd/- Sd/- (संजय गग� / SANJAY GARG) (एन. के. सैनी / N.K. SAINI) उपा�य� /Vice President �या�यकसद�य/ Judicial Member Dated : 06.08.2019 “आर.के.” आदेशक���त�ल�पअ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकरआयु�त/ CIT 4. आयकरआयु�त (अपील)/ The CIT(A) 5. �वभागीय��त�न�ध, आयकरअपील�यआ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड�फाईल/ Guard File
आदेशानुसार/ By order,
ITA No. 44-c-2016 M/s Good Media News (P) Ltd, Shimla.
6 सहायकपंजीकार/ Assistant Registrar