2013 (9) TMI 879 - HC - Income Tax

Writ Petition, when the alternative remedy of appeal pursued by the Petitioner TDS on trade discount offered to the advertising agency Held that - Assessing Officer did have jurisdiction and that he has not committed any such patent error of jurisdiction, which may entitle the petitioner to file the writ petition, to consider and settle the issues, which are primarily based on facts. The petitioner has already preferred an appeal against the assessing order. The advise given to the appellant not to press press certain grounds, would not give the petitioner a right to directly approach the Court, even if similar questions of law have been raised - The petitioner has filed an appeal against the impugned assessment order. It may press the appeal on all the grounds open to them - Appellant authority will decide the stay application, or hear the appeal.

Summary

Issues:
1. Assessment order passed by the Assistant Commissioner of Income Tax (TDS) under Section 201/201 (1-A) of the Income Act 1961.
2. Applicability of judgment in Jagran Prakashan Ltd Vs. Deputy Commissioner of Income-Tax (TDS) to the current case.
3. Imposition of penalty and limitation under Section 201 of the Act.
4. Maintainability of the writ petition against the assessment order in light of the statutory appeal under Section 250 of the Act.

Analysis:
1. The petitioner challenged the assessment order passed by the Assistant Commissioner of Income Tax (TDS) for the assessment years 2009-10 and 2010-11, raising substantial demands and penalty notices. The petitioner contended that the facts and legal questions align with the judgment in Jagran Prakashan Ltd case, emphasizing non-deduction of TDS on trade discounts offered to Advertising Agencies. The petitioner also disputed the penalty imposition based on jurisdictional issues.

2. The petitioner argued that the judgment in Jagran Prakashan Ltd case settles the question of TDS deduction on trade discounts, relieving the petitioner from a substantial financial burden. However, the Court noted that the petitioner failed to provide evidence to establish the nature of discounts offered, distinguishing the current case from the precedent. The Court emphasized the importance of factual evidence in such matters.

3. Regarding the imposition of penalty and the limitation under Section 201 of the Act, the petitioner contended that the assessment order was time-barred. However, the Court found that the assessing officer had jurisdiction and did not commit any glaring errors warranting a writ petition. The Court highlighted the petitioner's ongoing appeal process and advised them to pursue all available grounds through the statutory appeal route.

4. The respondent raised a preliminary objection to the maintainability of the writ petition, citing the statutory appeal provision under Section 250 of the Act. The respondent argued that the petitioner had already availed the appeal remedy and deposited a partial amount, making it improper to seek relief through a writ petition. The Court agreed with the respondent, emphasizing the importance of exhausting statutory remedies before approaching the Court directly.

In conclusion, the Court dismissed the writ petition, emphasizing that the petitioner should pursue the statutory alternative remedy of appeal against the assessment order. The Court expected the appellate authority to promptly address the appeal and any related stay applications.