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2018 (11) TMI 786 - AT - Income TaxTDS u/s 194J - payment made by appellant to the seafarers - non deduction of tds - default u/s 201(1) and 201 (IA) - Rectification of mistake - non-consideration of Co-ordinate Bench decision - Held that - Similar issue in the case of Doehle Dauntic India Pvt. Ltd. 2016 (12) TMI 1752 - ITAT MUMBAI for A.Y. 2012-13, the Tribunal had found that services were covered u/s.194J in an exparte order wherein the above order of the Tribunal was not brought to the notice of the tribunal. Upon careful consideration, we find that this decision in the case of Doehle Dauntic India Pvt. Ltd. for A.Y. 2012-13 was rendered exparte and the above earlier decision of the Tribunal in that assessee s own case was not referred before it. As held in M/S. HINDUSTAN COCA COLA BEVERAGE PVT. LTD VERSUS CIT 2007 (8) TMI 12 - SUPREME COURT OF INDIA the non-consideration of Co-ordinate Bench decision can render the order of tribunal liable to rectification of mistake apparent from record. Accordingly adhering to the doctorine of stare decisis, we follow the Tribunal s decision in similar case for the A.Y.2011-12. Hence, accordingly, we remand the matter to the file of the authorities below with same directions as in the aforesaid order to examine the applicability of section 194J. Both the counsel fairly agreed with this proposition - Appeals filed by the assessee stand allowed for statistical purposes.
Issues:
1. Whether the appellant was correctly held as an assessee in default for not deducting tax under section 194J of the Income Tax Act. 2. Whether the appellant's liability for tax deduction should be under section 194C instead of section 194J. 3. Whether the appellant can be considered an assessee in default if the deductees have paid the taxes directly. 4. Whether the decision in a previous case involving a similar issue should be followed. Analysis: 1. The appellant contested being held as an assessee in default for not deducting tax under section 194J. The AO observed that the appellant failed to deduct tax u/s.192 from the wages paid to crew members, leading to the default status. The learned CIT(A) found the services rendered qualified as fees for professional services under section 194J. However, based on the Hindustan Coca Cola Beverages case, it was argued that if the deductees paid the taxes, the appellant should not be considered in default. 2. The appellant argued that their liability for tax deduction should fall under section 194C instead of 194J. The appellant's business involved supplying shipping crews to a company, and a tripartite agreement was in place. The Tribunal in a similar case emphasized the need to determine the nature of relationships between the parties involved to ascertain the correct tax liability. The Tribunal directed a fresh examination of the issue, considering the specific circumstances. 3. The appellant raised the issue of whether they could be considered an assessee in default if the deductees had paid the taxes directly. The learned CIT(A) directed the AO to compute the tax liability following the Hindustan Coca Cola Beverages case, where it was held that if taxes were paid by the deductees, the appellant should not be treated as an assessee in default. The Tribunal upheld this direction, emphasizing the importance of following higher court decisions. 4. The Tribunal considered a previous case involving a similar issue and decided to follow the precedent set in that case. The Tribunal remanded the matter to the lower authorities with directions to examine the applicability of section 194J based on the previous decision. The Tribunal held that the decision in the earlier case should guide the current judgment, leading to the allowance of the appeals for statistical purposes.
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