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TMI Blog2011 (12) TMI 602X X X X Extracts X X X X X X X X Extracts X X X X ..... ommunication network and basic needs. An inquiry was carried out in this case for verification of compliance with TDS provisions as per the Income-tax Act. Based on the information gathered during the course of inquiry, the Assessing Officer issued show cause notices u/s 201(1) and 201(1A) and after perusing the details submitted by the assessee, the A.O issued an order u/s 201(1) and 201(1A) raising a demand of ₹ 3,59,83,493/- for AY. Financial year 2005-06 and ₹ 3,07,59,262/- for F.Y. 2006-07 relevant to the assessment years 2006-07 and 2007-08 respectively. Aggrieved by this order of the A.O., the assessee went in appeal before the first appellate authority, who cancelled the orders of the A.O by relying on the order of the T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utes. The matter has thus received finality at that stage. This decision of the Tribunal has, however, not been followed by the learned CIT(A) on the ground that at the point of time when decision was delivered by the Tribunal proviso to section 194H which was brought to the statute vide Finance Act 2007 w.e.f. 1st June 2007, did not exist. This proviso to section 194H provides that no deduction shall be made under this section on any commission or brokerage payable to Bharat Sanchar Nigam Ltd or Mahanagar Telephone Nigam Ltd to their public call office franchises . The reasoning adopted by the CIT(A) is that since this proviso is effective from 1st June 2007, it must be inferred that prior to 1st June 2007, the liability for tax deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chanism, in the sense that when there is no primary liability of the taxpayer, proxy liability of the tax deductor also does not survive. In a situation like the one we are in seisin of, in which the CBDT itself accepts that there is hardly any primary tax liability of the recipients of income, it is highly contentious an issue whether or not vicarious tax withholding liability can be invoked. As a matter of fact, the Central Board of Taxes has taken a stand that the demands are not to be enforced on BSNL and MTNL offices except in the cases where taxes have been deducted at source but not paid over to the revenue. This aspect of the matter is clearly discernable from the following public circular issued by the Central Board of Direct Taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nforced till the matter is sorted out by the Board. When such is the stand taken by the CBDT itself, it cannot be said that in view of the insertion of proviso to section 194H w.e.f. 1st June 2007, it is beyond doubt or controversy that so far as the period prior to this amendment is concerned, the tax deduction at source requirements u/s 194H applied on payments of commission to PCO franchisees. Learned CIT(A) did not, therefore, have any good reasons to disregard the binding judicial precedent. It cannot be open to a subordinate or coordinate judicial forum to disregard the decision of this Tribunal, in assesse s own case, merely on the ground that the later amendment in law, w.e.f. 1st June 2007, must be inferred to be clarifying the pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been found as a fact one way or the other, and the parties have allowed that position to be sustained by not challenging the order, it would not be appropriate to alter the position in the subsequent year . The facts of the present case are that not only for different assessment years, but for the same assessment years but in respect of different units of the assessee, different treatment is being given Such an inconsistency and hyper technical approach, particularly when the assessee is a public sector undertaking, is rather inappropriate and it is contrary to the sprit behind formation of committee on Disputes in the Cabinet Secretariat. When on the same set of facts and without any changes in law, the Committee on Disputes have declin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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