9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 763 - AT - Income TaxAssessee in default u/s 206C - PIDB had received certain amounts from the contractor in awarding / entering into Concession Agreement for toll plaza operation / Toll based operation and maintenance concession for certain segments of roads - PIDB is just a nodal agency of the Punjab Government or acting as it own capacity - HELD THAT - The actual activity performed by the assessee Board and other surrounding circumstances, it is apparent and clear that the Board has acted as a grantor of the concession on its own account on a principle to principle basis with the concessionaire and has been performing all the functions actually and practically of the granter of the concession agreement. The irrespective of the wordings of the concession agreement or the confusion and ambiguity coming out of the provisions of the PI (D&R) Act 2002, the fact relevant for determination of the present tax dispute is that the assessee Board had collected the toll fee or to say Concession fee in its own capacity as an independent body corporate and had used the funds for its own purposes and activities, and as such, the assessee Board (PDBI) falls under the definition of Licensor and has acted as a Grantor of the licensee /contract in the Toll Plaza to the concessionaire and has received from the licensee / concessionaire the consideration for the award of said contract and, as such, it was liable to collect tax at source as per the provisions of section 206C (1C). The contention of the assessee that it was not merely grant of usage of toll plaza, rather, the concessionaire was responsible for the overall operation and maintenance of the project facility, is concerned, the assessee could not establish from the evidence or documents on record that as to why these agreement be not treated as agreement for grant of license / toll rights as per the provisions of section 206 C(1C). A perusal of the License /concession agreements relating to these appeals, considering the nature, scope and ambit of the agreement and also considering the actual activity carried on by the assessee PIDB, we are of the firm view that the provisions of section 206C(1C) are squarely applicable to the case in hand. Being held so, the assessee PIDB . As per the law laid down in M/S PUNJAB INFRASTRUCTURE DEV. BOARD, CHANDIGARH 2016 (12) TMI 1534 - PUNJAB AND HARYANA HIGH COURT is held to be liable to pay interest as per the provisions of section 206C(7) and penalty under the provisions of section 271CA of the Act. In view of the above, the issue restored by the Hon ble High Court to the Tribunal, is decided against the assessee and in favour of the Revenue.
Issues Involved:
1. Whether the assessee, Punjab Infrastructure Development Board (PIDB), was required to collect tax at source (TCS) under section 206C(1C) of the Income-tax Act, 1961. 2. Whether the PIDB could be treated as an 'assessee in default' for not collecting TCS. 3. Applicability of interest under section 206C(7) and penalty under section 271CA of the Act. Issue-wise Detailed Analysis: 1. Requirement to Collect Tax at Source (TCS): The primary issue was whether PIDB was required to collect TCS as per section 206C(1C) of the Income-tax Act, 1961. During the TDS inspection and assessment proceedings, the Assessing Officer noticed that PIDB had received amounts from a contractor (referred to as 'Concessionaire') for toll plaza operations and maintenance concessions but failed to collect TCS. The assessee argued that it was not liable to collect TCS as it acted merely as a nodal agency for the Government of Punjab and the toll rights were granted by the Government of Punjab. 2. Assessee in Default: The Tribunal held that the proviso to section 206C(6A), effective from 1.7.2012, stipulated that if the buyer/licensee/lessee filed a return of income, considered the amount for computing income, and paid due taxes, the assessee would not be deemed 'assessee in default'. The Tribunal found this proviso to be declaratory and curative, with retrospective effect from 1.4.2005. Consequently, the Tribunal initially held that PIDB could not be treated as 'assessee in default' and deleted the demand created under sections 206C(1C) and 206C(7). 3. Interest and Penalty: The High Court remanded the case back to the Tribunal, directing it to decide if section 206C(1C) applied to PIDB for the purpose of interest under section 206C(7) and penalty under section 271CA. The High Court noted that the liability to pay interest and penalty would arise only if PIDB was held responsible for collecting TCS. The High Court highlighted the need to ascertain whether PIDB acted on its own account or as a nodal agency for the Government of Punjab. Tribunal's Findings: Upon remand, the Tribunal scrutinized the Concession Agreement and the statutory provisions of the Punjab Infrastructure (Development & Regulation) Act, 2002. The Tribunal observed that despite the agreement indicating that PIDB was a confirming party, in practice, PIDB acted as the grantor of the concession on a principal-to-principal basis. The Tribunal noted that PIDB collected the toll fee/concession fee and used the funds for its own purposes, not depositing them with the Government of Punjab. The Tribunal found the statutory provisions ambiguous and overlapping, leading to confusion about the roles and responsibilities of PIDB and the Government of Punjab. However, based on the actual activities and functions of PIDB, the Tribunal concluded that PIDB acted independently and was liable to collect TCS under section 206C(1C). Decision: The Tribunal decided against the assessee, holding that PIDB was liable to collect TCS and, consequently, was liable to pay interest under section 206C(7) and penalty under section 271CA. The Tribunal emphasized that PIDB, acting as an independent body corporate, fell under the definition of a licensor and was responsible for collecting TCS. Conclusion: The appeals were disposed of with the Tribunal ruling in favor of the Revenue, affirming PIDB's liability to collect TCS and pay the associated interest and penalties. The Tribunal's decision was based on a detailed examination of the Concession Agreement, statutory provisions, and the actual activities performed by PIDB.
|
