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TMI Blog2019 (4) TMI 763X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ource but it could not be treated as assessee in default in the light of the decision of the Hon'ble Supreme Court in the case of Hindustan Coca Cola Beverage (P) Ltd Vs. CIT [2007] 293 ITR 226 (SC) However, the Assessing officer observed that the decision cited by the assessee was not applicable to the facts and circumstances of the case. The Assessing officer observed that since the assessee / PR had failed to collect and deposit tax u/s 206C of the Act, therefore, the assessee was liable to be held as assessee in default u/s 206C of the Act. He accordingly created the demand of tax and interest as per the provisions of section 206C (1C) / 206 C(7) of the Act. 3. On appeal, the Ld. CIT(A) upheld the order of the Assessing officer. 4. Before the Tribunal, it was pleaded by the assessee that the proviso inserted to section 206C (6A)of the Act w.e.f. 1.7.2012 stipulates that if the PR fails to collect the tax at source, but the concerned buyer / licensee or lessee, as the case may be, has furnished his return of income u/s 139 of the Act and has taken into account such an amount for computing the income in such return of income and has paid the due taxes on income de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also contended that the concessionaire was responsible for the overall operation and maintenance of the project facility and that it was not merely granted usage of the toll plaza, therefore, the provisions of section 206 C(IC) were not attracted in this case. 6. The Hon'ble High Court considering the above plea of the assessee observed that the Tribunal only considered the assessee s alternative contention to the effect that the Concessionaire had filed the return and paid the due taxes. However, the Tribunal did not consider the assessee s main contention that the provisions of section 206 C(1C) were not applicable at all. The matter, therefore, was remanded back to the Tribunal to decide the issue whether the provisions of section 206C(1C) of the Act were attracted in these cases or not for the purpose of levy of interest liability u/s 206C(7) or the penalty u/s 271CA of the Act. 7. It is pertinent to mention here that in the meantime the Concessionaire namely M/s Rohan Rajdeep Tollways Ltd. filed a Civil Writ petition No.20680 of 2014 agitating his liability to pay the demand created under the provisions of section 206 C(1C) of the Act or the interest under the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y upon the terms of the agreement. 10. We therefore, proceed to decide the issue in the light of the above observations made by the Hon'ble High Court. At the outset, the Ld. Counsel for the assessee invited our attention to the Concession Agreement dated 21.2.2007 for Toll Based Operation and Maintenance Concession of Ropar-Phagwara Road Project and has submitted that this agreement may be taken as a base agreement as the other agreements relating to the other roads were almost identical to this agreement. He invited our attention to the names and details of the parties, to the agreement, and has stated that perusal of the aforesaid agreement dated 21.2.2007 reveals that the same has been entered into by the Governor of State of Punjab in his executive capacity for the State of Punjab acting through the Secretary, Public Works Department, Government of Punjab, as first party and has been referred to as GOP (Government of the State of Punjab) with M/s Rohan Rajdeep Tollways Ltd., referred to as Concessionaire for the grant of Concession Agreement for Ropar Phagwara Road segment to establish tolling facility for the professional management, operations and maintenan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not granted the Concession Agreement, hence, it was not authorized to collect toll fee also. That what has been collected by PIDB was only a Concession fee being a confirming party to the agreement and that too has been collected on behalf of the Government of Punjab. The Ld. Counsel for the assessee, therefore, submitted that the provisions of section 206 C(1C) of the Income Tax Act were attracted in this case. 11. The Ld. DR, on the other hand, has also relied upon the various statutory provisions to show that it is only the assessee Board which is not only authorised to grant concession, enter into agreement with the concessionaire but also to collect the Concession fee / toll fee from the concessionaire. He in this respect has invited our attention to section 20(4) of the Punjab Infrastructure (Development Regulation) Act, 2002 which, reads as under:- (4) In order to carry out its functions consistent with the provisions of this Act the Board shall have the powers to do all or any of the following, namely:- (i) Acquire, hold, develop or construct such property, both movable and immovable, as the Board may deem necessary for the performance of any of its activitie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 35. Grant of Concession: (1) The concession shall be granted by a Public Infrastructure agency to a bidder who:- . (3) Immediately after the completion of the second stage evaluation, a decision on whether or not to award the contract shall be taken by the Board. (4) If the Board takes a decision to award the contract, the Board shall issue to the proposed awardee, the notice of award immediately after such decision. 14. In view of the above, the Ld. DR has submitted that it is the assessee Board who has been authorised to enter into contract, receive the consideration / toll fee / Concession fee etc. by whatever name it is so called. That the assessee Board is an independent corporate entity. That the payment, if any, was received by it was on its own behalf and not on behalf of the Government of Punjab and further that consideration received by the Board has not been deposited to the Government fund, rather, the same has been used by the assessee Board for its own purposes. 15. We have considered the rival submissions and also have gone through the relevant clauses of the Concession Agreement as well as the relevant provisions of the PI (D R) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd even the so collected toll fee / concession fee has been used / applied by the Board for its own purposes / deposited in its own funds and has not been deposited with the Government of Punjab. Now coming to the statutory provisions, from the reading of the entire statutory provisions of the Act, it reveals that the provisions of PI (D R) Act 2002, are all the more ambiguous, confusing and cryptic and lead to unclear, indeterminate, vague and absurd interpretation. In some of the provisions it has been mentioned that it is the Government of Punjab which has to carry out development projects and that the Board will act as a nodal agency, wherein, in the other provisions as discussed above, the Board has been authorised not only for the identification of the sites / roads / development of projects but also has been given the responsibility of the development of the projects, calling for bids for public private partnership, power to acquire hold, develop or construct both immovable and immovable property as the Board deem necessary for performance of any of its objects relating to the development of the infrastructure sector or infrastructure projects. It is authorised to lease, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 by the Hon'ble Punjab 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. 20. 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. 21. Before parting with the order, it is pertinent to note here that though the Hon'ble High Court has directed the Tribunal to decide the appeals on the date of hearing i.e. 7.3.2019 or within 10 days thereafter, however, due to inability of the counsel of the assessee and official of the Department to answer the relevant queries raised by the Bench on the date of hearing, an adjournment was sought and, therefore, the case was adjourned to 13.3.2019. The case was accordingly heard on 13.3.2019, however, the appeals co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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