2018 (8) TMI 26 - AT - Service Tax

Renting of Immovable Property Service - non-payment of service tax - premises were occupied during the entire period in terms of the agreement but Form 26 AS submitted by the party shows that the party received the amount made by their tenant only upto June, 2011 - deduction of TDS amounts - Held that - Form 26 AS is a document under the Income Tax Law reflecting the amount of tax deduction at source (TDS) - Admittedly the TDS is required to be deducted by a person making payment to another person and reflects on all the payment actually made. The appellants have not produced any evidence to show that such TDS amount reflected in Form 26 AS is incorrect or inflated or the appellant have made any refund claim of such excess TDS collected by the tenant, from the Income Tax Authorities. Thus, the amounts reflected in Form 26 AS represent the correct value of the services which has to be adopted as the assessable value, unless evidence to the contrary is produced by the appellant. Penalty - Held that - During the relevant period, the taxability under the category of Renting of Immovable Property was under dispute and subject matter of litigation before various Courts. In such a scenario, non-payment of tax by the appellant cannot be held on account of any mala fide, thus requiring any invocation of Penal provisions against the appellant - Penalty set aside. Appeal disposed off.

Summary

Issues:
1. Request for adjournment and authorization of advocate
2. Confirmation of Service Tax demand under "Renting of Immovable Property"
3. Initiation of proceedings and imposition of penalty
4. Contestation of service tax quantum based on threshold exemption and vacant premises
5. Acceptance of threshold exemption and premises being vacant
6. Dispute on the value of services provided
7. Adoption of Form 26 AS for determining the value of services
8. Upholding of differential duty and setting aside of penalty imposition

Analysis:

1. The judgment begins by addressing a request for adjournment and the authorization of the advocate. The tribunal rejects the adjournment request due to the appellant's responsibility to engage an advocate in advance. The advocate's authorization is questioned as his Vakalatnama is not on record, leading to the dismissal of the adjournment request.

2. The tribunal confirms the demand of Service Tax against the appellant for "Renting of Immovable Property." The appellant, owning properties in Mumbai and Agra, rented them out without registering with the Service Tax Department or paying the appropriate service tax, leading to the demand confirmation.

3. Proceedings were initiated against the appellant through a show cause notice, raising a service tax demand and proposing a penalty. The appellant had partially paid the service tax, and the proposal was to confirm the balance amount.

4. During adjudication, the appellant contested the service tax quantum based on entitlement to threshold exemption and premises being vacant for a specific period.

5. The Deputy Commissioner accepted the appellant's entitlement to the threshold exemption and acknowledged the premises being vacant for a certain period, leading to a dispute on the value of services provided during that time.

6. The appellant and the Revenue disagreed on the value of services, with the former relying on bank account receipts and the latter on the agreement terms and Form 26 AS.

7. Form 26 AS, reflecting tax deduction at source, was deemed crucial in determining the value of services. The tribunal held that unless evidence was provided to the contrary, the amounts in Form 26 AS represented the correct value of services.

8. The tribunal upheld the confirmation of the differential duty but set aside the penalty imposition under Section 78 of the Finance Act due to the taxability being under dispute during the relevant period, concluding the appeal accordingly.