RASTRIYA SAHARA (SAHARA INDIA MASS COMMUNICATION),NOIDA vs. DCIT (TDS), NOIDA

PER SUCHITRA KAMBLE, JM These appeal are filed by the assessee against the order dated 31.03.2016 passed by the Commissioner of Income Tax [Appeals]-I, Noida under section 250 of the Income Tax Act, 1961 for Assessment Years 2011-12 & 2012-13.

2. That the ld. CIT(A) has erred in observing that the appellant has not responded to remand report o the Assessing Officer inspite of the fact that the same was never served on the correct address.

3. That the ld. CIT(A) has erred in law and on facts and circumstances of the case in passing appellate Order ex-parte without considering the submissions made by the appellant which were on record of the Ld CIT(A).

4. That in any view of the matter the ld. CIT(A) is not justified in confirming the order of the D* Commissioner of Income Tax, TDS, Noida without adjudicating and considering the submissions made by the appellant during the course of the appellate proceedings. 5. That the order passed is against the principles of audi alteram partem contrary to the principles natural justice and, therefore, void ab-initio and bad in law. 6. That the order passed by the ld. CIT(A) is without proper opportunity and bad in law. 7. That the order passed by the ld. CIT(A) is against the merits, circumstances and legal aspects of the case. 8. That the appellant craves leave to add, alter, amend or withdraw any or all the grounds of appeal on or before the date of hearing.”

3. The assessee is engaged in the business of publication of newspaper. The major source of revenue of the assessee, publisher of newspaper is generated from advertisements published in its newspaper. The assessee is a member of the Indian Newspaper Society whose rules provide that the advertising agencies are free from control or interference from any business or person who owns or controls a newspaper, that newspaper agencies cannot be treated as principles and advertising agencies agents and prohibited members of the society from appointing advertising agency as their representative. The assessee gave trade discount of 15% to a accredited advertising agency. The discount was given in accordance with rules and regulations of the Indian Newspaper Society. The Assessing Officer was of opinion that trade discount given by the assessee was in the nature of commission or brokerage and assessee was liable to deduct tax at source on such payment to the advertising agency which assessee failed to establish. The Assessing Officer held that the assessee to be in default u/s 201(1) of the Income Tax Act, 1961 and, therefore, raised a demand of Rs.34,17,903/- u/s 201(1) and Rs.14,35,519/- u/s 201(1A) of the Act for A.Y. 2011-12 and for A.Y. 2012-13 raised a demand of Rs.40,87,595/- u/s 201(1) and Rs.12,26,279/- u/s 201(1A) of the Act.