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TMI Blog2019 (8) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and 201(1A) of the IT Act is without jurisdiction, not as per law and barred by limitation, hence requires to be cancelled. 6. The CIT(A) erred in confirming the order passed u/s 201(1) & 201(1A) even after noticing that a single order was passed for multiple assessment years which is not as per law, hence requires to be cancelled. 7. That the orders of the CIT(A) /AO are liable to be cancelled as they are passed in gross violation of judicial discipline inasmuch as even the judgment of the jurisdictional High Court in appellant's own case, which upheld the appellate orders for the earlier years involving similar facts, has been disregarded. 8. That the CIT(A) merely carried out an academic exercise of analyzing various Explanations, clauses under section 9(1)(vi) of the Act, provisions of Double Taxation Avoidance Agreements and judicial decisions without actually specifying the charge having regard to the facts and circumstances in the appellant's case. 9. That the Learned CIT(A) erred in confirming the liability against the appellant contrary to the provisions of the I T Act and also DTAA. 10. That the CIT(A) erred in sustaining the order passed by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the law. As there was a failure on the part of assessee to deduct tax at source, the AO had issued show cause notices by invoking the provisions of section 201(1) by treating the assessee as assessee in default in respect of tax. 3. The assessee filed a detailed reply. After considering the reply of assessee, the DDIT had passed a common order against the assessee in respect of payments made to the foreign non-resident entities. Feeling aggrieved by the order passed by the DDIT, the assessee filed an appeal before the CIT(Appeals) and raised various grounds before the CIT(Appeals). 4. However, the ld. CIT(Appeals) was not convinced with the submissions made before him by the assessee and accordingly, he passed an order against the assessee. 5. As per the AO, he later noted the following two mistakes in the order passed by the DDIT:- "1. Since Assessing Officer has considered the rate of tax as per provisions of Income-tax Act, surcharge and educational cess should have been levied on the tax liability calculated by the Assessing Officer. However, Assessing Officer has failed to levy surcharge and educational cess in the order u/s. 201(1) & 201(1A). 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 are allowed." 8A) In these appeals, the assessee raised these grounds also before CIT (A) that the orders passed by the AO u/s 154 are bad in law because the rectifications made by the AO are beyond the scope of section 154. This ground was also raised by the assessee before CIT (A) in 154 proceedings that interest u/s 201 (1A) is also disputed. Learned CIT (A) disposed of these appeals in the proceedings u/s 154 by way of a separate combined order dated 26.10.2016 in ITA No. 47 to 52/CIT (A)/2015 - 16. As per this order, he held that grossing up of tax by invoking the provisions of section 195A is not as per law but he held that the orders p [assed by the AO u/s 154 are not bad in law. He also held that the AO is directed to levy surcharge and cess in respect of royalty payments made to vendors who are resident of such countries with which the DTAA with India allows withholding of more than 11.33% and deleted the surcharge and cess ion respect of other payments. 9. Feeling aggrieved by the order passed by the CIT(Appeals) in respect of grossing up of taxes, the revenue is in appeal before us as per ITA Nos. 2335 to 2339/Bang/2016 on the following identical grounds:- "1. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n gross violation of judicial discipline in as much rate as per Income Tax are applied overlooking the rate as per DTAA. 3. That the learned CIT(A) has erred in considering the rate of tax as 15% in USA, UK, Austria and Canada and 20% for Spain whereas the rate of tax as per the relevant clause of the respective DTAA is 10%. 4. That the learned CIT(A) has erred in not considering that the order under section 154 of the Income Tax Act, 1961 (Act) is bad in law and is thereby disputed. 5. That the learned CIT(A) has erred in not considering that the rectification u/s 154 was made on an issue that is clearly outside the scope of section 154 of the Act. 6. That the learned CIT(A) has erred in not considering that the findings, reasons given by the AO for carrying out rectification are contrary to facts emerging from records and is unsustainable and untenable in law. 7. That the learned CIT (A) has erred in fastening a liability on the appellant u/s 201(1A) of the Act. 8. That the above grounds are without prejudice to each other. The appellant craves leave to add, alter, amend or vary from the above grounds of appeal before or at the time of hearing." 11. We will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther the expenditure in nature as that is not what was urged before the lower authorities. Once it is held to be not representing the royalty and it is a revenue expenditure, the deduction allowed by the Appellate Authority is legal and valid and do not call for any interference." 13. The ld. DR had also drawn our attention to the order of Tribunal passed in ITA No.426, 427, 468 & 469/Bang/2006 dated 30.05.2008 wherein the Tribunal in paragraphs 18.5 & 18.6 held as under:- "18.5 We have heard both the parties. It is true that the issue under reference stands covered by the decision of the Tribunal in the case of the assessee for the asst. year 2000-01. The Tribunal while disposing off the appeal for the asst.year 2000-01, followed he earlier order for the asst.years 1998-99 and 1999-2000, which is reported in 96 TTJ 211., Thus, the issue is covered in favour of the assessee. 18.6 The Special Bench in the case of Amway India Enterprise v DCIT 111 ITC, 112 had an occasion to consider as to whether the expenditure incurred on.software is revenue or capital. If the life of the computer software is shorter, say less than two years, then it is to be treated as revenue expenditure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed on the ground that there was an obligation on the part of the payers to effect deduction from out of payments made by them in favour of non-resident recipients for acquiring any software even assuming that it partakes the character of goods. It was submitted that the Assessing Officer was of the view that software is basically purchased by way of licence to use and he relied on the judgment of the Hon'ble High Court of Karnataka in the case of Synopsis Inc. and the decision of the Delhi Tribunal in the case of Microsoft Corporation Vs. ADIT. It was contended that the DRP agreed with the reasoning of the Assessing Officer in continuing the disallowance, even though it was submitted therein that the learned CIT(A) and the Tribunal had decided this issue in the assessee's favour in the earlier assessment years, on the ground that the Department has taken the matter in further appeal under section 260A of the Act and that the matter had not attained finality. The learned Departmental Representative placed reliance on the findings of the Assessing Officer and the DRP on this issue and reiterated the arguments in the orders of the authorities below. 25. We have heard both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isdictional High Court. Following the earlier order of this Tribunal as well as Hon'ble jurisdictional High Court, we decide this issue in favour of the assessee." 16. The ld. AR has further drawn our attention to para 170 to 172 of the order of the jurisdictional High Court in the matter of Wipro Ltd. v. DCIT for the AY 20101-02 to 2004-05 to the following effect:- "170. The said questions arose for consideration before this Court in the assessee's case in ITA No.3198/2005 which was decided on 28.2.2012 where the substantial questions of law were answered in favour of the assessee and against the revenue. Following the said Judgment, said questions of law are answered in favour of assessee and against the revenue. Substantial Question No.18: "Whether the Appellate Authorities were correct in holding that the payments made by the assessee for import of software cannot be disallowed u/s 40(a)(i) of the Act for failing to deduct tax at source u/s 195 of the Act as such payments did not constitute royalty u/s 9(1)(vi) of the Act?" [Question of law No.26 in ITA Nos.907 & 909/2008, Question of law No.22 in ITA Nos.904 & 905/2008 and Question of law No.9 in ITA No.3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Per contra, the ld. Sr. Standing Counsel for the revenue had submitted that the decisions rendered by the Tribunal were issued without considering the law laid down by the Hon'ble High Court in the matter of CIT v. Synopsis International Old Ltd. 212 Taxman 454 (Kar) and in the matter of CIT v. Samsung Electronics Co. Ltd. & Ors., 345 ITR 494 (Kar) whereby the High Court has consistently held that the payments made by the assessee for purchase of software was in the nature of royalty and hence, subject to deduction of tax and non-deduction of tax automatically invokes the rigors of section 201 for declaring the assessee as assessee in default. It was further submitted by the ld. DR that the law laid down by the Hon'ble Supreme Court in the case of CIT v. Sun Engineering Works (P) Ltd., 198 ITR 297 (SC) wherein the Hon'ble Supreme Court had explained the principle of interpretation of judgment and also the decision of Delhi Municipal Corporation v. Gurnam Kaur AIR 1989 SC 38 wherein the Hon'ble Supreme Court at page 8&9 had held as under:- "Pronouncements of law, which are not part of the ratio decidendi are classed as obiter dicta and are not authoritative. With all respect to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... don) Ltd. v. Bremith, Ltd., [1941] 1 KB 675. the Court held itself not bound by its previous decision. Sir Wilfrid Greene, M.R., said that he could not help thinking that the point now raised had been deliberately passed sub silentio by counsel in order that the point of substance might be decided." 19. Similarly, the ld. DR also relied upon the decision in the case of UOI v. Dhanwanthi Devi, 1996 (6) SCC 44 at 51 para 13 to 14 held as under:- "Before adverting to and considering whither solatium and interest would be payable under the Act, at the outset, we will dispose of the objection raised by Shri Vaidyanathan that Hari Kishan Khosla's case is not a binding precedent nor does it operate as ratio decidendi to be followed as a precedent and per se per incuriam. It is not everything said by a Judge who giving judgment that constitutes a precedent. The only thing in a Judge's decision binding a party is the principle upon which the case is decided and for this reason it is important to analyse a decision and isolate from it the ratio decidendi. According to the well settled theory of precedents, every decision contain three basic postulates - [i] findings of material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... binding precedent. Therein, admittedly the question that had arisen and was decided by the Bench of three Judges was whether solatium and interest are payable to an owner whose land was acquired under the provisions of the Central Act? On consideration of the facts, the relevant provisions in the Central Act and the previous precedents bearing on the topic the Court had held that solatium and interest are not a part of compensation. It is a facet of the principle in the statute. The Central Act omitted to provide for payment of solatium and interest since preceding the acquisition the property was under was under requisition during which period compensation was under requisition during which period compensation was paid to the owner. The position obtained and enjoyed by the Government during the period of requisition continued after acquisition. The same principle was applied without further elaboration on entitlement to payment of interest of an owner. It is true that the decisions relied on by Shri Vaidyanathan on the principle of payment of interest as part of compensation in respect of land acquired were brought to the attention of this Court for discussion. What would be cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asis of the above, it was submitted that the principle of law expounded by the High Court in the case of Wipro (supra) [case of the assessee] was not the exposition of law as considered by the Hon'ble Supreme Court and was only with respect to facts before the jurisdictional High Court and therefore, will not come in the way of AO/CIT(A) for declaring the assessee as assessee in default u/s. 201(1) of the Act. 22. The ld. DR had also relied on the decision of the Tribunal rendered in the case of Intertec Software Pl. Ltd. v. ITO dated 13.10.2015 which was followed in the decision of GE India Industrial P. Ltd. in ITA No.595/Bang/2016 dated 17.11.2017, wherein at para 6, it was recorded as under:- "6. We have heard the rival submissions and perused the material on record. We find that the coordinate bench in the matter of Intertec Software Pvt. Ltd., vs ITO, dt.13.10.2017, wherein the author of this order was the co-author, after relying upon the judgment of the jurisdictional High Court in the matter of CIT (Intl.Taxn) v. Samsung Electronics Co. Ltd [(2011) 203 Taxman 477] and distinguishing the later judgment of the jurisdictional High Court in WIPRO Ltd. vs. DCIT as reported ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dingly, this later judgment dated 25.03.2015 is also not relevant. 7. There is no dispute that the present issue is covered against the assessee by the judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Samsung Electronics Co. Ltd. (Supra) and learned AR of the assessee has merely cited these two judgments rendered in the case of WIPRO Ltd. (Supra) and no other argument was made to the effect that this issue is not covered against the assessee by this judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Samsung Electronics Co. Ltd. (Supra). Since, these two judgments cited by him are not applicable as per above discussion; ITA No. 1388/Bang/2013 we respectfully follow the judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Samsung Electronics Co. Ltd. (Supra) and decline to interfere in the order of CIT (A). Respectfully following the judgment of the Hon'ble jurisdictional High Court (supra) and that of the order of the coordinate bench (supra), on identical facts and circumstances, we uphold the orders of the lower authorities." 23. On the basis of above decisions and the binding precedent of the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #39; and Hon'ble Karnataka High Court in assessee's own case have been rendered in favour of the assessee on the basis of its own facts and the applicable law. The argument of the department that the issue before the Hon'ble ITAT and the Hon'ble High Court did not involve the question of TDS on Royalty is factually incorrect as evident from the discussion and the decision both by the Hon'ble ITAT and the Hon'ble High Court extracted in our written submission dt.22.11.2017. It is to be seen that it is a decision between the litigant parties which has the binding effect. The reliance placed by the department in support of the order u/s 201(1) & 201(1A) on the decisions of the Karnataka High court in CIT vs Samsung Electronics Co Ltd & Ors (345 ITR 494 -- department paper book pages 1 to 25), CIT vs Synopsis International Old Ltd (212 Taxman 454 - department paper book pages 26 to 51), CIT vs CGI Information Systems & Management Consultants (P) Ltd (226 Taxman 319 ¬department paper book pages 126 to 138) and others cannot overturn the decision rendered in assessee's own case in a lis between the parties. A decision given in some other case cannot overtu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The reliance placed by the Ld.DR on the decision of the Karnataka High Court in the case of CIT vs Wipro Ltd 203 Taxman 621 (department paper book pages 139 to 143) is also incorrect as evident from page 142, para 6 of the order extracted as hereunder wherein the Court has clearly said that the issue does not pertain to shrink wrapped software: "6 Mere fact that in the instant case, the issue do not pertain to shrink wrapped software or off-the-shelf software and access to database maintained by M/s.Gartner is granted online, would not make any difference in the reasoning assigned by us to hold that such right to access would amount to transfer of right to use the copyright held by M/s.Gartner and the payment made by the respondent to M/s.Gartner in that behalf is for the licence to use the said database maintained by M/s.Gartner and such payment is to be treated as royalty ................" Hence the above decision is not applicable to the impugned case. The decisions relied on by the Ld.DR of Hon'ble ITAT Bangalore in M/s.Kalki Communication Technologies ltd vs ITO - ITA 1401 to 1403/B/2013 dt.15.04.2015 and GE India Industrial I' Ltd vs Addl CIT in ITA 595/B/16 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ling in PCIT vs GMR Energy Limited ITA 358 to 360/2018 dt.08.01.2019 relied on by the Ld.DR is out of context and not applicable." 26. We have heard the rival contentions of the parties and perused the record. If we look into the order passed by the Tribunal in the case of the assessee for the AY 2007-08, the Tribunal in para 8.4 had decided the issue by following the decision of the coordinate Bench in favour of assessee for the earlier AYs 2001- 02 and while doing so, had not distinguished the binding decision of the High Court rendered in the case of Synopsis International Old Ltd. (supra). Similarly for the AY 2008-09, the Tribunal while deciding this issue in para 15 & 16 had merely followed the decision for the AY 2007-08, which had merely followed the decision of the coordinate Bench for the AY 2001-02 & 2002-03. Thus this decision of the coordinate Bench was also passed ignoring the binding decision of the jurisdictional High Court in the matter of Synopsis International Old Ltd. (supra) and also in the matter of Samsung Electronics Co. Ltd. & Ors., (supra). Interestingly, the decision of Samsung Electronics Co. Ltd. & Ors., (supra) was passed by the jurisdictional High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nate benches had correctly applied the law in the context of what was now argued before us by the assessee. In fact this Bench was having the occasion to consider the pith and substance of the decisions rendered by the High Court in the matter of Wipro and thereafter had come to conclusion ,which was rightly pointed out by the ld. DR, that the issue of royalty was not an issue before the High Court in the matter of Wipro. 27. Though both the parties during the course of arguments had submitted and had argued that this Tribunal will be in contempt if the Tribunal does not follow the judgment of Wipro as per ld. AR and the Tribunal will be in contempt if the Tribunal will not follow the judgment of Samsung Electronics Co. Ltd. & Ors. (supra) as per ld. DR. In either case as per the submission of the ld. AR/ld. DR, the Tribunal would be in contempt. The Tribunal is the creation of statute/ Constitution and has been assigned the duty to examine the facts and apply the correct law without being influenced by the threat of contempt posed by both sides. in contempt. In our humble understanding, the law declared by the Hon'ble High Court in the case of Samsung Electronics Co. Ltd. & Ors. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was submitted that combined order passed by authorities below as separate order was required to be passed distinctly dealing with limitation issue, the taxability and also the issue of DTAA. 31. Per contra, the ld. DR had submitted that section 201 makes no distinction between resident and non-resident payee. However, limitation was provided by the proviso only with respect to resident for initiation of proceedings u/s. 201 for declaring assessee as assessee in default and no limitation was provided by the Act for non-residents. He however relies on decision of coordinate Bench in the matter of Google in ITA No. 1511 to 1516/B/2013 where the coordinate Bench have considered various aspects of section 90 and 201 and had held that there cannot be discrimination of non-resident and resident after considering the provisions of the Act. He pointed out that the tribunal also held that limitation provided for the non-resident for declaring assessee as assessee in default is required to be 6 years and he had drawn our attention to the following paras of this tribunal order:- "91. For the purpose of above, it was submitted that the reasoning which was given by courts/Tribunal refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the Act, reasonable time limit has to be read into the section as held by various high courts in the case of NHK Japan, Bharath Hotels, the limitation provided for payments to residents has to be applied(six years ). Otherwise it amount to discrimination between the payments made to the resident and the non-resident. 3) I nsofar as the judgements relied on by the assessee, all the judgements were rendered in respect of the orders passed prior to amendment to section 201(3) of the Act and period of four years has been arrived at on the analogy of various other provisions under the Act. Even in the absence of any limitation being provided under section 201(3) of the Act for payments to the nonresident's, even certain limitation is to be provided, applying the same analogy as held by the various courts in the judgements relied on by the assessee, period of six years has to be read/considered in view of the legislative interference by introduction of section 201(3) of the Act. In the absence of such an analogy and any other Limitation other than period of six years would amount to discrimination in the limitation between the payment to resident and non-resident. 4) Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not prescribe any time limit for the initiation of the proceedings or the passing of the order. We find that for the most of the actions under the Act, the particular time limit has been given for the commencement and completion of the proceedings. For example time limit for issuing of notice for the purposes of making assessment is laid down in section 143(2). Similarly time for issuing notice of reassessment has been set in section 149. Section 153 deals with the time provided for the completion of assessment and reassessments. Similarly time limit for rectification of order is given in section 154; for passing revising order under section 263 etc. etc. In such a scenario the question arises that if no time limit is provided, then can any time limit be artificially imported by the authorities. The ld. DR has contended that the Tribunal is not competent to lay down any time limit. If this contention is brought to the logical conclusion it will mean that the unlimited time will be available to the Departmental authorities at their sweet-will for taking action under this section. In our considered opinion this contention raised on behalf of the revenue is bereft of any force for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n can be taken in indefinite period. It is impermissible to argue that no time limit be granted to revenue." 96. Thus it is clear from reading of the abovementioned paragraphs that the logic and reasoning given by the Special Bench for coming to reasonable period of 4 years was based on analysis of the provisions viz., 143, 147, 148, 149 and 153 and absence of time limit u/s 201(1) of the Act. In our view, there is a change in the position after passing of judgment by the Special Bench as the section 201 has been amended by the legislature and now specific provision is incorporated by the Legislature to dealing with limitation or initiation of proceedings u/s 201 of the Act in the case of resident , however no period of limitation is provided in the case of non-resident. 97. Recently Allahabad high court in the matter of Mass Awash (P.) Ltd. [2017] 83 taxmann.com 306 (Allahabad) had occasion to deal with all judgments referred before us and thereafter it was held as under "71. In the entirety of the discussion, we find it difficult to hold that period consumed by Revenue in prosecuting matter against main payee would have resulted in accrual of a right upon Assessee so as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) stands excluded. The Division Bench, therefore, has rightly held that no limitation has been prescribed and it can be executed at any time, especially when the law of limitation for the purpose of this appeal is not there. Where there is statutory rule operating in the field, the implied power of exercise of the right within reasonable limitation does not arise. The cited decisions deal with that area and bear no relevance of the facts." (Emphasis added) 74. We also find that Bombay High Court has taken a different view in the matter of prescribing limitation and Calcutta High Court has declined to prescribe any such limitation. 75. In our view, the dictum laid down by Apex Court in the cases referred above is very clear. While exercising power of judicial review in the case like present one, it would be appropriate to consider whether power has been exercised by competent authority within a reasonable period and whether delay is unjust, arbitrary, whimsical or it is for valid reasons. If Court finds that delay in exercise of power is for valid and bonafide reasons, alleged delayed exercise of power cannot be held invalid." 98. The contrary judgment of Hon'ble Delhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would be given special and beneficial treatment in comparison to the resident or treated unequally by providing unlimited time to initiate proceedings under section 201 of the Act. In our opinion, the Constitution of India provides equal treatment and equal protection of law within the territory of India. If the law requires initiation of proceedings within 6 years from the end of financial year for the resident, same treatment is required to be given to the non-resident. For this proposition, we may rely upon on the judgment of Hon'ble Supreme Court in Dr. Subramanian Swamy v. Director, CBI [2014] 8 SCC 682 (SC) in para 22. 101. Keeping in mind the principles set out by the Hon'ble Supreme Court in Dr. Subramanyian Swamy (supra), if we examine the scheme of Section 201 Act, the resident of India cannot be discriminated vis-àvis. The non-resident under Income Tax Act and similarly under DTAA non-resident cannot be discriminated viz-a-viz resident. If we accept the argument of the Ld. AR that the limitation of 4 years, as held provided by the Special Bench would continue to apply to non-resident even after post amendment to section 201, in that eventuality, hostile dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion to section 143(1) and section 201 and submitted that if comparison is drawn between the two provisions, then the law does not prohibit any passing of the common order u/s. 201. 33. In rebuttal, the ld. AR had filed the written submissions as under:- "Further it is the contention of the assessee that passing a single order for multiple assessment years is unsustainable and untenable under the circumstances. This contention is supported by perusal of the following sections: Section 2(9) of the Act defines "Assessment year" as under: (9) "assessment year" means the period of twelve months commencing on the 1st day of April every year Section 3 of the Act defines "Previous year" as "previous year" means the financial year immediately preceding the assessment year Section 139(1) of the Act reads as under: "139. (1) [very person,- (a) being a company or a firm: or (b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct applied separately. The limitation for passing the order as per section 201(3) has also to be tested for each previous year separately. Thus the impugned common order passed by the AO u/s 201(1) & 201(1A) dt.15.10.2013 for multiple assessment years being AY 2007-08 to 2012-13 are had in law and requires to be vacated. Further the entire tax liability has been fastened on the assessee based on retrospective amendment to Explanation 4 of section 9(1)(vi) inserted by Finance Act 2012 w.r.e.f 1.06.1976 for alleged non deduction of TDS u/s 195 of the Act. Section 195 of the Act reads as under: 195. (1) Any person responsible for paying to a non-resident, not being a company, or to a foreign company, any interest (not being interest referred to in section 194LB or section 194LC) or section 194LD or any other sum chargeable under the provisions of this Act not being income chargeable under the head "Salaries") shall, at the time of credit of such income to the account of the payee or at the time of payment thereof in cash or by the issue of a cheque or draft or by any other mode, whichever is earlier, deduct income-tax thereon at the rates in force :." As per the above section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d opinion, there is no prohibition for the AO to pass a common order for all the assessment years. In all the cases before the AO, the payee (recipient) was non-resident. It is not disputed that payment was made for purchase of software. It is also not disputed before the AO that tax was not deducted as mandated by law before making payment. Therefore, all the necessary conditions as required under law for invoking provisions of s. 201 were in place and therefore in our view, the action on the part of lower authorities is in accordance with law. We hold accordingly. Regarding the arguments of the learned AR of the assessee that the orders passed by the AO are time barred, we respectfully follow the tribunal order in the case of Google as reproduced above and hold that these orders are not time barred as these are passed within six years. 36. In the result, all the six appeals filled by the assessee in the proceedings u/s 201 & 201 (1A) are dismissed. 37. Now we take up six appeals filed by the assessee in the proceedings u/s 154 i.e. ITA Nos. 18 to 23/Bang/2017. Identical Grounds raised by the assessee in these six appeals are already reproduced above in Para 10. 38. Both sid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed by the revenue in the proceedings u/s 154 i.e. ITA Nos. 2335 to 2339/Bang/2016. Identical Grounds raised by the revenue in these six appeals are already reproduced above in Para 9. 43. Both sides were heard. Regarding Ground No. 1 raised by the revenue in these appeals, it is seen that this is a general ground for which no separate adjudication is called for. Regarding Ground Nos. 2 to 5, we find that Para No. 8 of the combined impugned order of CIT (A) is relevant in this regard and hence, we reproduce the same as under:- "8. I have gone through the agreement between Microsoft Licensing, GP ("MS") and the appellant containing Master Licensing Agreement. The agreement clause cited by the assessing officer and that quoted by the appellant are the same as per the agreement produced before me. As per the plain reading, the clause only speaks of the agreement between the parties to the effect that Wipro may deduct taxes required to be paid on remittances and pay it to the authority. As per the Master Agreement with. Microsoft, there is no indication of any definite amount to be paid to the vendor irrespective of taxes. There is no basis to infer that the appellant had to bea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f royalty to all countries in dispute except Greece is 10% but he has held that this claim is not correct and he has noted the withholding tax rate on payment of Royalty in respect of USA, UK, Austria, and Canada is 15% and the same for Spain is 20%. This shows that learned CIT (A) has not accepted the claim of the assessee without examination and verification. Hence, if this is the contention of the revenue that the vendors of Ireland, Netherland, Singapore, Israel, France, Germany, Australia and Belgium etc. are not residents of respective countries, the revenue should have brought on record some evidence in this regard. In the absence of any evidence even in one case that the vendor of a country of 10% withholding tax rate is in fact resident of some other country having higher withholding tax rate, we do not find any reason to interfere in the order of CIT (A). This Ground is also rejected.
46. In the result, all 6 appeals filed by the revenue are dismissed.
47. In the combined result, all 12 appeals filed by the assessee and all 6 appeals filed by the revenue are dismissed.
48. Pronounced in the open court on this 21st day of June, 2019. X X X X Extracts X X X X X X X X Extracts X X X X
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