THE COMMISSIONER OF INCOME-TAX vs. BANGALORE ELECTRICITY SUPPLY CO LTD

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ITA/201/2012HC KarnatakaKAHC01031144201220 March 2020Bench: ALOK ARADHE,M.NAGAPRASANNA4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the analysis and distribution of electricity, involving sophisticated machinery and technical expertise, did not amount to technical services under Section 194J. Consequently, the interest levied under Section 201(1A) for non-deduction of TDS was also deleted.

What were the facts?

The Revenue appealed a decision of the ITAT that held the assessee was not liable for TDS under Section 194J for electricity distribution services. The assessee argued these services did not constitute technical services attracting TDS.

What were the issues?

Whether the distribution of electricity by the assessee constituted 'technical services' attracting TDS under Section 194J, and if the interest levied for non-deduction was justified.

Which sections of the Income-tax Act were involved?

Section 194J,Section 201(1A),Section 260A

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 20TH DAY OF MARCH, 2020 PRESENT

THE HON’BLE MR.JUSTICE ALOK ARADHE AND

THE HON’BLE MR.JUSTICE M. NAGA PRASANNA

ITA NO. 201 OF 2012

BETWEEN:

1.

THE COMMISSIONER OF INCOME-TAX, TDS,HMT BHAVAN, BELLARY ROAD, BANGALORE

2.

THE INCOME-TAX OFFICER-TDS, WARD-16(1), HMT BHAVAN, BELLARY ROAD, BANGALORE …APPELLANTS

(BY SRI. K.V.ARAVIND, ADV.)

AND:

BANGALORE ELECTRICITY SUPPLY CO., LTD., CORPORATE OFFICE, IV FLOOR, K.R. CIRCLE, BANGALORE-560 001. …RESPONDENT

(BY SRI. A. SHANKAR, SENIOR ADV. A/W SRI.M.LAVA ADVOCATE)

2 THIS ITA IS FILED UNDER SECTION 260A OF THE INCOME TAX ACT, 1961 PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO.530/Bang/2011 DATED 16/03/2012 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE INCOME TAX OFFICER, TDS, WARD-16(1), BANGALORE, ETC.,

THIS ITA COMING ON FOR HEARING, THIS DAY ALOK ARADE J., DELIVERED THE FOLLOWING:-

JUDGMENT

This appeal under Section 260-A of the Income Tax Act has been filed by the revenue which was admitted by a Bench of this Court vide order dated 03.9.2012 by framing the following the substantial questions of law: i) Whether the Tribunal was correct in holding that the analysis and distribution(SLDC) of electricity by KPTCL from generation point to the customers of the assessee involving utilization of sophisticated machineries, involvement of technical expertise, application of science, services of engineers, engagement of qualified technicians and trained, skilled

3 personnel/manpower does not amount to technical services to attract provisions of Section 194(J) of the Act?

ii) Whether the Tribunal was correct in deleting the interest levied under Section 201(1A) of the Act, for non-deduction of tax at source as required under Section 194J of the Act?

2.

When the matter was taken up today, learned Senior counsel for the respondent submitted that the aforesaid substantial question of law involved in this appeal have already been answered in favour of the assessee by a Division Bench of this Court vide judgment dated 22.03.2016 passed in ITA No.438/2012 and other connected matters. The aforesaid contention made by the learned Senior Counsel for the respondent could not be disputed by the learned counsel for the Revenue.

3.

For the reasons aforesaid judgments, the substantial questions of law framed in this appeal are

4 answered against the revenue and in favour of the assessee. In the result the appeal is dismissed.

Sd/- JUDGE

Sd/-

JUDGE

Psg*

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