2017 (8) TMI 78 - HC - Income Tax

Provisions of section 206C(1C) - liability to collect tax at source as provided - Held that - The construction/interpretation of the contract referred to by the parties as concessionaire agreement would be of vital importance in ascertaining whether the assessee entered into the same on its own account and for and on behalf of itself or whether it did so as a nodal agency for and on behalf of the Government of Punjab. That contract has not even been produced before us. Further the matter may not end by a mere reading of the contract. It may be necessary to consider the surrounding circumstances if the terms thereof are not clear. It is impossible, therefore, in these appeals to determine the issue. We have decided the alternate issue in certain other appeals against the assessee by a separate order and judgment passed by us in (CIT (TDS) v. Punjab Infrastructure Development Board 2016 (12) TMI 1534 - PUNJAB AND HARYANA HIGH COURT which is also the assessee s case. It would, however, be necessary for the Tribunal to decide both the issues.

Summary

Issues:
Appeal against Tribunal's order dismissing Revenue's appeals for assessment years 2009-10 to 2011-12. Question of law regarding applicability of section 206C(1C). Dispute over build-operate-transfer agreement between assessee and concessionaire. Contention of being a nodal agency for Government of Punjab. Lack of reasons in Assessing Officer, Commissioner, and Tribunal's decisions. Importance of interpreting concessionaire agreement. Decision on alternate issue in separate appeals. Remand to Tribunal for fresh decision.

Analysis:
The judgment pertains to appeals challenging the Tribunal's order dismissing Revenue's appeals for the assessment years 2009-10 to 2011-12. The main issue revolves around the question of law concerning the applicability of section 206C(1C) to the assessee's case. The agreement in question is a build-operate-transfer agreement between the assessee and a third party referred to as the concessionaire. The Revenue asserts that the assessee entered into the agreements independently, while the assessee claims to be a nodal agency for the Government of Punjab. The Tribunal and Commissioner ruled in favor of the assessee based on the main contention, without addressing the alternate argument raised by the assessee.

The Assessing Officer, Commissioner, and Tribunal's decisions lacked adequate reasoning. The Assessing Officer deemed the assessee liable to collect tax at source without providing any justification. The Commissioner held that the assessee was not liable under section 206C(7) without substantial reasoning, merely stating that the amounts received were a concession fee, not a toll fee. The Tribunal upheld these decisions without providing detailed reasons, highlighting the lack of thorough analysis in the lower authorities' decisions.

The interpretation of the concessionaire agreement is crucial in determining whether the assessee acted on its own behalf or as a nodal agency for the Government of Punjab. However, the contract itself was not presented before the court. The judgment emphasizes that understanding the contract may require considering surrounding circumstances if the terms are unclear. Due to the complexity of this issue, the court found it impossible to make a determination solely based on the information available in the appeals.

In separate appeals, the court addressed an alternate issue related to the assessee, indicating the necessity for the Tribunal to consider both issues in the present case. Consequently, the impugned orders were set aside, and the matter was remanded to the Tribunal for a fresh decision in accordance with the law. The judgment concludes by instructing a copy of the order to be placed on the files of related cases, ensuring consistency in decision-making across connected matters.