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2018 (10) TMI 1287 - AT - Income TaxTDS u/s 194H - Default u/s.201(1) & 201(1A) - default for not deducting the tax on roaming charges paid to other service providers - Held that - After considering the same, the AO held the assessee to be an assesses in default for not deducting tax at source in respect of trade discount given to its distributors on prepaid SIM cards and prepaid recharge vouchers. The AO also held the assessee to be in default for not deducting the tax on roaming charges paid to other service providers. AO, thus computed the demand of tax and interest against the assessee in respect of the above two aspects. After recording a detailed finding, both AO and CIT(A) has held the assessee liable u/s.201(1) and 201(1A). Nothing was placed before us so as to persuade us to deviate from the findings of the lower authorities. - Decided against assessee.
Issues:
Appeal against order of CIT(A)-14, Mumbai for A.Y. 2010-11 under sections 201(1) & 201(1A) of the Income Tax Act. Analysis: The appeal was filed by the assessee against the order of CIT(A)-14, Mumbai for A.Y. 2010-11 under sections 201(1) & 201(1A) of the Income Tax Act. Despite multiple opportunities, nobody appeared on behalf of the assessee during the proceedings. The AO observed that the appellant did not deduct tax on certain items, leading to proceedings under section 201(1). The AO held the assessee in default for not deducting tax on trade discounts and roaming charges, resulting in a demand of tax and interest amounting to ?10,50,72,916. The CIT(A) upheld the AO's decision, citing the need for human involvement in technical services as per Supreme Court rulings. The CIT(A) also referred to the requirement of deducting tax at source under section 194J of the Act for payments to third-party service providers. Additionally, the CIT(A) mentioned that recovery of demand could not be enforced if the appellant proved that tax had been paid by the deductees, as per Supreme Court rulings and CBDT circular. The appellant made additional submissions referencing a judgment from ITAT Mumbai in a different case, arguing against the demand of tax and interest under sections 201 and 201(1A). However, the CIT(A) noted that no grounds of appeal were raised on this matter, and relief could not be granted without proper appeal grounds. The appellant's reliance on a different ITAT Mumbai decision was rejected as the facts of the cases were dissimilar, and the provisions of sections 40(a)(i) and 40(a)(ia) were not applied suo-moto in the appellant's case. The CIT(A) concluded that the appellant's arguments were rejected on both technical and merit-based grounds. Ultimately, after reviewing the findings of the lower authorities, the ITAT Mumbai upheld the decision that the assessee was liable under sections 201(1) and 201(1A), resulting in the dismissal of the appeal. In conclusion, the ITAT Mumbai dismissed the appeal of the assessee against the order of CIT(A)-14, Mumbai for A.Y. 2010-11 under sections 201(1) & 201(1A) of the Income Tax Act, as the findings of the lower authorities were upheld, and no persuasive evidence was presented to deviate from the established decisions.
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