link for full case:[ Ссылка ]
Case Summary:
[2022] 449 ITR 203 ( SC ) [ IN THE SUPREME COURT OF INDIA ]
1 . SINGAPORE AIRLINES LTD. 2 . KLM ROYAL DUTCH AIRLINES v. COMMISSIONER OF INCOME-TAX BRITISH AIRWAYS PLC v. COMMISSIONER OF INCOME-TAX (TDS)
November 14, 2022.
Section. 194H, 271C,
Assessment Year: 2001-02
Favouring: Department/Department of State/Union Government
WHETHER TDS IS DEDUCTIBLE ON SUPPLEMENTARY COMMISSION WHICH IS OVER NET FARE PAYABLE TO TRAVEL AGENT
Travel agent also charged supplementary commission and retained over net fare quoted by airline
Supplement commission also falls into the definition of commission and TDS is required to be deducted
Every action taken by travel agent was on behalf of air carriers
Supplementary commission is incidental to sale of air tickets on behalf of air carriers and for benefit
Lack of control of airlines over actual fare charged by travel agent over net fare cannot form basis for airline not to deduct TDS there on.
If recipient includes amount in its income and pays taxes, assesse cannot be held in default, although interest is payable
Section 194H does not distinguish between direct and indirect payment
The factum of the exact source of the payment would be of no consequence to the requirements of deducting tax at source.
Even on an indirect payment stemming from the consumer the assesse would remain liable under the Act.
If the relationship between two parties is of a principal agent relationship as defined in section 182 of 1872 contract Act, then Section 194H will be attracted
A contract of agency does not entail control over the minutiae of the agent’s action
An agent undoubtedly retains a sizable level of discretion on how to achieve the desired results
A contract of agency permits on agent to carry out acts on its own volition provided it does not contravene the purpose of the agency contract and the interests of the principal
Penalty not liveable u/s 271C since debateable issue.
Cases referred to :
Ahmedabad Stamp Vendors Association v. Union of India [2002] 257 ITR 202 (Guj) (para
18)
Around the World Travel and Tours P. Ltd. v. Union of India [2004] 268 ITR 477 (Mad)
(para 39)
CIT v. Ahmedabad Stamp Vendors Association [2012] 348 ITR 378 (SC) (para 18)
CIT v. Eli Lilly and Co. (India) P. Ltd. [2009] 312 ITR 225 (SC) (para 55)
CIT v. Qatar Airways [2011] 332 ITR 253 (Bom) (para 17)
CIT v. Singapore Airlines Ltd. [2009] 319 ITR 29 (Delhi) (para 9)
Director, Prasar Bharati v. CIT [2018] 403 ITR 161 (SC) (para 18)
Gordon Woodroffe and Co. (Madras) Ltd. v. Sheikh M. A. Majid [1966] Supp SCR 1 (para
23)
Hindustan Coca Cola Beverage Pvt. Ltd. v. CIT [2007] 293 ITR 226 (SC) (para 17)
Khedut Sahakari Ginning and Pressing Society Ltd. v. State of Gujarat [1971] 3 SCC 480
(para 24)
Lakshminarayan Ram Gopal and Son Ltd. v. The Government of Hyderabad [1954] 25
ITR 449 (SC) (para 22)
Nagubai Ammal v. B. Shama Rao [1956] SCR 451 (para 50)
Qamar Shaffi Tyabji v. CEPT [1960] 39 ITR 611 (SC) (para 44)
The Bhopal Sugar Industries Ltd. v. STO [1977] 40 STC 42 (SC) (para 25)
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link for some important videos:
1) WHETHER INVALID ASSESSMENT WITHOUT NOTICE U/S 143(2) CAN BE SUBJECT MATTER OF REVISIONS U/S 263?- [ Ссылка ]
2) WHETHER MEMBERSHIP FEES RECEIVED BY RACE CLUB FROM MEMBERS IS CAPITAL RECEIPT OR REVENUE RECEIPT?- [ Ссылка ]
3) WHETHER REASSESSMENT BASED ON TAX AUDIT REPORT ALREADY WITH A.O. DURING ORIGINAL ASSESSMENT, VALID?- [ Ссылка ]
4) WHETHER MERE ABSENCE OF STOCK REGISTER CAN BE GROUND FOR REJECTION OF ACCOUNTS?- [ Ссылка ]
5) WHETHER ASSESSMENT IS NULL & VOID WHERE NOTICE U/S 148 IS ISSUED BEFORE RECORDING REASONS?- [ Ссылка ]
