2012 (5) TMI 630 - AT - Income Tax

Order u/s. 201 passed beyond the period of 4 years from the end of the relevant financial year - obligation to deduct tax in respect of payment made by one non-resident to another non-resident - liability to deduct tax from payments made to Advanced Satellite International Ltd. - deduction of tax in respect of payments made to LMB Holdings (Mauritius).

Summary

Issues:
1. Whether an order u/s. 201 can be passed beyond the period of 4 years from the end of the relevant financial year.
2. Obligation to deduct tax in respect of payment made by one non-resident to another non-resident.
3. Liability to deduct tax from payments made to Advanced Satellite International Ltd.
4. Deduction of tax in respect of payments made to LMB Holdings (Mauritius).
5. Deduction of tax on payments made to LMB Holdings Ltd. (Isle of Man).
6. Levy of interest u/s. 201(1A).
7. Deduction of tax at source on payments made to PanAmSat towards transponder hire charges.

Analysis:
1. The judgment dealt with cross-appeals against orders of the Commissioner (Appeals) for assessment years 2001-02, 2002-03, and 2003-04, heard together due to common issues.
2. The appellant, a Mauritius company, declared a total loss for the assessment year 2002-03 and failed to deduct tax at source for payments to non-residents, leading to a tax demand.
3. The judgment addressed various grounds raised by both parties, citing relevant case laws to decide on issues such as the timeliness of passing orders u/s. 201, obligation to deduct tax between non-residents, and liability on specific payments.
4. It was held that the appellant had no liability to deduct tax on payments to Advanced Satellite and LMB Holdings (Mauritius and Isle of Man), based on previous decisions and legal interpretations.
5. The judgment also dismissed the Revenue's appeal regarding the deduction of tax on payments made to PanAmSat, following precedent decisions favoring the assessee.
6. The levy of interest u/s. 201(1A) was considered consequential and required no separate adjudication.
7. Ultimately, the appeals were partly allowed or dismissed based on the specific issues and legal interpretations presented in each case, with detailed reasoning provided for each decision.