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2014 (4) TMI 696 - AT - Income TaxStay application - Demand raised u/s 201(1) and 201(1A) of the Act - non deduction of TDS 100% tax amount already paid by the receipient - Held that - The contention of the assessee that the recipient of income has already paid taxes on their income, therefore, recovery of tax from the assessee amounts to double recovery of tax in respect of the income requires verification on the part of the AO Relying upon M/s. Hindustan Coca Cola Beverage Pvt. Ltd Versus Commissioner of Income Tax 2007 (8) TMI 12 - SUPREME COURT OF INDIA - if the payee has made demand of tax then to that extent, the assessee should not be considered as the assessee in default the assessee s liability for levy of interest u/s 201(1A) cannot be denied with respect to the delay in payment of taxes the assessee has already paid more than 100% of its demand raised u/s 201(1A) for all the years, assessee cannot be asked to pay further amount with respect to demand raised u/s 201(1A) - thus, stay granted till the disposal.
Issues:
Stay applications filed by the assessee regarding demand raised under Sections 201(1) & 201(1A) for assessment years 2009-2010 to 2012-2013. Analysis: The assessee contended that it was not liable to deduct tax at source for discounts allowed to distributors and roaming charges paid to other telecom operators. The department held the assessee liable under Section 194J. The assessee relied on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Bharti Cellular Ltd. The Supreme Court observed that the department cannot levy interest under Section 201(1A) or impose penalties if the tax has been paid by the recipient. The assessee also referred to the decision in Hindustan Coca Cola Beverage P. Ltd. Vs. CIT, stating that taxes had already been paid by the recipient. The taxes paid under Sections 201(1) and 201(1A) for all four years were highlighted, showing that a significant portion of the demand had been paid by the assessee. The learned AR emphasized the financial hardships faced by the assessee due to significant business losses. The contention was that the assessee had a strong case on merits and that the balance of convenience favored granting a stay of demand and an early hearing. On the other hand, the learned DR opposed the stay application, stating that there was no pressure for tax recovery, and only an early hearing should be granted. After considering both sides, the Tribunal found that the demand was raised under Sections 201(1) & 201(1A) concerning Sections 194H and 194J. The Tribunal noted the argument that recovering tax from the assessee when the recipient had already paid taxes could lead to double taxation. However, verification by the AO was deemed necessary. Referring to the Hindustan Coca Cola Beverage case, the Tribunal held that the assessee should not be considered in default if the payee had paid the tax. The Tribunal also noted that the assessee had paid a significant portion of the interest demand under Section 201(1A). Consequently, the Tribunal granted a stay for six months or until the final order by the Tribunal, whichever was earlier. The hearing of the appeals was directed to be fixed on 12th May, 2014. In conclusion, all stay applications filed by the assessee were allowed based on the considerations mentioned above.
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