2002 (4) TMI 892 - AT - Income Tax

Summary

Issues:
- Appeal against orders passed by Commissioner of Income-tax (Appeals) for various assessment years.
- Application of section 206C regarding tax collection at source on basic license fee.
- Contempt of Tribunal's order.
- Liability of assessees for short collection of tax and interest under section 206C(7).

Analysis:
- The appeals were filed against the orders passed by the Commissioner of Income-tax (Appeals) for different assessment years. The issue revolved around the applicability of section 206C concerning tax collection at source on the basic license fee. The assessees argued that the Tribunal had previously ruled in their favor in a similar case for the assessment year 1994-95, emphasizing that the basic license fee was not part of the purchase price to be paid to the distillers. They relied on a judgment of the Allahabad High Court and contended that the license fee did not entitle the licensee to purchase goods, thus falling outside the purview of section 206C. The assessees also highlighted the principle of consistency in decisions and urged that the same outcome should apply to all assessment years. On the other hand, the Departmental Representative argued that the basic license fee was distinct from the license fee and that the assessees were intermediaries in the sale process, not the actual sellers to the retail contractors.

- After considering the submissions and examining the relevant evidence, the Tribunal concluded that the assessees could not be held liable for tax collection at source on the basic license fee. It was established that the assessees were not the direct sellers to the retail contractors, and the basic license fee was not part of the purchase price paid to the distillers. Therefore, the Tribunal ruled that the assessees were not in default under section 206C and should not be subject to interest liability under section 206C(7). The Tribunal relied on its previous decision in a similar case and overturned the findings of the Commissioner of Income tax (Appeals) for all the years under consideration.

- The judgment highlighted the importance of precedent and consistency in decision-making, emphasizing that when there is no variation in the facts of a case already decided by the Tribunal, a different view should not be taken. By following the precedent set in a previous case and considering the specific nature of the transactions involving the basic license fee, the Tribunal ruled in favor of the assessees and allowed all the appeals against the orders passed by the Commissioner of Income-tax (Appeals) for the respective assessment years.