THE COMMISSIONER OF INCOME TAX vs. M/S ACER INDIA PVT LTD

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ITA/151/2019HC KarnatakaKAHC01033475201931 January 2022Bench: ALOK ARADHE,SURAJ GOVINDARAJ4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the first substantial question of law did not arise. The second and third substantial questions of law were answered in favor of the assessee, finding that the orders under Sections 201(1) and 201(1A) were indeed barred by limitation.

What were the facts?

The Revenue appealed against an ITAT order concerning the Assessment Year 2010-11. The appeal raised questions about the applicability of Section 194H for manpower supply and price discounts, and the limitation period for orders under Sections 201(1) and 201(1A).

What were the issues?

The key issues were whether Section 194H applied to payments for manpower supply and price discounts, and whether the orders for tax and interest demands were time-barred.

Which sections of the Income-tax Act were involved?

Section 194H,Section 201(1),Section 201(1A),Section 201(3)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JANUARY 2022 PRESENT THE HON’BLE MR. JUSTICE ALOK ARADHE AND THE HON’BLE MR. JUSTICE SURAJ GOVINDARAJ I.T.A. NO.151 OF 2019 BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX 4TH FLOOR, HMT BHAVAN NO.59, BELLARY ROAD GANGANAGAR BENGALURU-560032. 2. THE ASST. COMMISSIONER OF INCOME-TAX CIRCLE-1(1), 4TH FLOOR HMT BHAVAN, NO.59, BELLARY ROAD GANGANAGAR, BENGALURU-560032. .... APPELLANTS (BY MR. K.V. ARAVIND, ADVOCATE) AND: M/S. ACER INDIA PVT. LTD., NO.13, 6TH FLOOR EMBASSY HEIGHTS MARGATH ROAD NEXT TO HOSMAT HOSPITAL BENGALURU-560025 PAN:BLRAO 1844D. ... RESPONDENT (BY MR. SURYANARAYANA, SR. COUNSEL FOR MS. MANASA ANANTHAN, ADVOCATE)

2 THIS I.T.A. IS FILED UNDER SEC. 260-A OF INCOME TAX ACT 1961, ARISING OUT OF ORDER DATED 14.09.2018 PASSED IN ITA NO.2571/BANG/2017 FOR THE ASSESSMENT YEAR 2010- 11, PRAYING TO: (i) FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED ABOVE. (ii) ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.2571/BANG/2017 DATED 14.09.2018 FOR ASSESSMENT YEAR 2010-11 ANNEXURE-C AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE ASST. COMMISSIONER OF INCOME TAX (TDS), CIRCLE-1(1), BENGALURU & ETC. THIS I.T.A. COMING ON FOR HEARING, THIS DAY, ALOK ARADHE J., DELIVERED THE FOLLOWING: JUDGMENT This appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’, for short) has been filed by the revenue. The subject matter of the appeal pertains to the Assessment Year 2010-11. The appeal was admitted by a Bench of this Court on the following substantial questions of law:

1.

Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in law in not considering that applicability of provisions of Section 194H are not attracted in the case of assessee with regard to payments towards supply of manpower and non-deduction of taxes on payments made to distributors towards price

3 protection and special price clearance discounts even when the assessing authority rightly held that assessee was liable to deduct tax on such activities as it attracted Section 194H of the Act?

2.

Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in confirming the order of the CIT(A) cancelling the order passed under Section 201(1) and 201(1A) of the Act by erroneously holding that the said orders are barred by limitation even though the period of limitation applicable is 7 years and not 2 years as held by the Tribunal?

3.

Whether on the facts and in the circumstances of the case and in law, the Tribunal is right in law in confirming the order of the CIT(A) cancelling the order passed under Section 201(1) and 201(1A) of the Act by erroneously holding that said orders are barred by limitation holding that as per law it prevailed prior to amendment to Section 201(3) by Finance Act No.2 of 2014 is considered?"

4 2. For the reasons assigned by us in the judgment passed today in I.T.A.No.150/2019, it is held that first substantial question of law does not arise for consideration in this appeal. The second and third substantial questions of law are answered in favour of the assessee and against the revenue. In the result, we do not find any merit in this appeal, the same fails and is hereby dismissed. Sd/- JUDGE Sd/- JUDGE ss

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