2024 (7) TMI 845 - HC - Income Tax

TDS u/s 194H - reference to the discount allowed to the distributors in respect of pre-paid sim cards and pre-paid vouchers/recharge coupons - Whether the appellant can be deemed to be an assessee in default under section 201 for noncompliance with section 194H and any tax or interest can be demanded from it? HELD THAT - Both the learned Counsel for the parties jointly state that the controversy is covered by the judgment of Bharti Cellular Limited(Now Bharti Airtel Limited) 2024 (3) TMI 41 - SUPREME COURT wherein held assessees would not be under a legal obligation to deduct tax at source on the income/profit component in the payments received by the distributors/franchisees from the third parties/customers, or while selling/transferring the pre-paid coupons or starter-kits to the distributors. Section 194-H of the Act is not applicable to the facts and circumstances of this case. Thus, in view thereof, both the substantial questions of law deserve to be answered in favour of the assessee and against the revenue.

Summary

The High Court of Calcutta dismissed the appeal related to assessment years 2012-13 and 2013-14. The court held that the appellant was not required to comply with tax deduction provisions under section 194H of the Income Tax Act based on a Supreme Court judgment. The appeal was dismissed in favor of the assessee.