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TMI Blog2019 (11) TMI 989X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of quasi judicial authority to confirm their prima facie view, but the object is to find the correct facts and thereafter apply the law to those facts and take a decision in terms thereof. It must also be borne in mind that the petitioner had filed its reply as directed by the Court on 9th September, 2019 being the last date to file a representation. The respondent disposed of the same on 9th September, 2019. This in the absence of any statutory obligation or judicial directions to dispose of the show-cause notice by 9th September, 2019 itself. The Authority could take time, consider the submissions and call the party for further hearing before passing the impugned order. Undue haste in passing the impugned orders dated 9th September, 2019 on the part of the respondent no.1 was only with the objective of using these orders declaring the Petitioner is an assessee in default, for the purposes of depriving the petitioner of its right to obtain certificates under Section 197 of the Act at Nil rate of tax deduction to be made by its customers. This is evident from the fact that on 29th July, 2019 when the Court set aside the earlier three orders dated 31st May, 2019 issued under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istri, Senior Counsel a/w Ms. Fereshte Sethna, Mr. Mrunal Parekh, Mr. Mansukh Ravaria, Mr. Ameya Pant and Mr. Rishabh Dubey i/b DMD Advocate for the petitioner Mr. P.C. Chhotaray for the respondents P.C. 1. Parties were put to notice that on 15th October, 2019 that this Petition is likely to be disposed of at the stage of admission. Today, at the request of the parties, this Petition is being disposed of finally at the stage of admission. 2. This petition under Article 226 of the Constitution of India challenges three orders dated 9th September, 2019 passed by the respondent no.1 Income Tax Officer under section 201(1) and 201(1A) of the Income Tax Act, 1961 (the Act). The three impugned orders under Section 201(1) and 201(1A) relate to Assessment Years 2017-18, 2018-19 and 2019-20. The demand made consequent to the above orders for the three assessment years aggregates to ₹ 94 crores. (approximately) 3. The identical/ common basis of the three impugned orders adverse to the petitioner is (two fold) as under:- (a) the petitioner did not deduct the tax at source under the appropriate head of technical services unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is available. In support, reliance was placed upon the decision of the Supreme Court in CIT Vs. Chabildas Agarwal, 357 ITR 357 . Thus, according to him, this Petition be dismissed, leaving it open to the Petitioner to avail of the efficacious alternative remedy available under the Act. 6. It is a settled position that non interference on the ground of alternative remedy is a self-imposed restriction, but in some cases, such as breach of principles of natural justice, the Court may entertain a petition. In fact, the decision cited by the respondent of the Supreme Court in Chabildas Agarwal (supra), the Court had recognized certain exceptions to the self-imposed rule of not entertaining a petition where alternative remdy is available and one such exception is where the order has been passed in breach of principles of natural justice. Thus, in this case, we would restrict ourselves only to examining the Petitioner s grievance of breach of principles of natural justice in passing the three impugned orders viz: non-speaking order and improper exercise of jurisdiction to achieve collateral purposes. Therefore, if on examination of the case on the above touchstone alone, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly, 2019 passed in Writ Petition No. 1788 of 2019 set aside the three orders dated 31st May, 2019 and restored the issue to the respondent no.1 - Income Tax Officer (TDS) raised in show-cause notices dated 24th May, 2019 for consideration afresh after sharing the material on which the respondent no.1 seeks to rely upon for passing an order under Section 201(1) and 201(1A) of the Act. The order dated 29th July, 2019 of this Court in Writ Petition No. 1788 of 2019 further directed the petitioner to file its representation along with desired evidence with the respondent no.1 within a period of 6 weeks from 29th July, 2019. This to enable the Respondent No.1 Income Tax Officer to pass a final order on the show-cause notices dated 24th May, 2019. (e) At about the same time, the petitioner also instituted Writ Petition No.1719 of 2019 challenging Certificates dated 4th June, 2019 issued under Section 197 of the Act issued by Respondent No.2 the Dy. Commissioner of Income Tax. The challenge in Writ Petition No. 1719 of 2019 was to the partial rejection of the application for nil tax deduction at source to be done by its customers being rejected and instead directing the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.2 Deputy Commissioner of Income Tax had stated that the time to issue the certificate under Section 197 be extended till a fresh order under Section 201(1) 201(1A) of the Act is passed consequent to the order dated 29th July, 2019 in Writ Petition No. 1788 of 2019. (h) This Court by order dated 3rd September, 2019 in the above Notice of Motion (L) No. 451 of 2019 extended the time to issue orders / certificates under Section 197 of the Act upto 9th September 2019. It further recorded its refusal to link passing of the fresh order under Section 197 of the Act with the orders to be passed in case of assessment for Assessment Year 2017-18 which is an attempt of the Revenue (this in the context of the affidavit filed by the Respondent no.2 Deputy Commissioner of Income Tax, which is in effect the orders passed under Section 201 and 201A of the Act). (i) On 9th September, 2019 the petitioner filed its detailed representation in respect of present proceedings under Section 201(1) and 201(1A) of the Act with the respondent no.1 Income Tax Officer pointing out the reason why, according to the petitioner it is not an assessee in default. In the said represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act could be applied. In fact consequent to the above, the CBDT had issued Instructions bearing No.5/11 dated 30th November, 2011. This was relied upon in the representation to contend that the Assessing Officer has to take the opinion of technical expert and bring it on record to establish that human intervention was necessary so as to provide the service, for tax to be deducted under Section 194J of the Act. No such exercise was done by the Revenue. (iv) In any event, the petitioner did place reliance upon an opinion of a technical expert viz. one Mr. Kamleshwar Bhatt of M/s. I2K2 Network Ltd. to support its contention that the online advertisement as availed by the Petitioner does not require any human intervention or assistance. Thus, it is not a technical service. Therefore, no deduction of tax under Section 194J of the Act is called for. (v) The petitioner has placed reliance upon the decision of the Tribunal in the case of ITO Vs. Right Florist Pvt. Ltd. (2013) 32 taxmann.com 99 wherein identical nature of service was held to not fall under Section 9(1)(vii) of the Act as a technical services. This as on examination of identical services of online ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e India Pvt. Ltd. and other like suppliers under Section 194J of the Act. 8. On examination of the three impugned orders which are identical in nature, we find that it does not consider much less deal with the following contentions of the petitioner :- (i) the petitioner s contention of Supreme Court decision in Bharati Cellular Ltd. (supra) and the consequent CBDT Circular No.5/11 on which the petitioner placed reliance was not even adverted to much less considered. The aforesaid binding decision was ignored without any reason. So also, the petitioner s evidence of an expert was not considered in the impugned order. In fact, it gives no reason why it seeks to ignore the same or why it does not seem it necessary to obtain an evidence of technical expert with regard to human intervention before holding that Section 194J of the Act is applicable as technical service is provided by the media owners. (ii) Section 194C of the Act is the applicable provision, as it is more specific then 194J of the Act. This submission duly supported by CBDT Circular No.720 of 1005 and the decision of this Court in UTV Electronics (supra) holding that between Sections 194 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement of natural justice is only to ensure that the party s stand is effectively dealt with by the authorities under the Act. Mere ritualistic giving of hearing and reproducing the submissions made without understanding the party s case would not satisfy the test of natural justice. In this case, the Adjudicating Authority was of the view that evidence of M/s. Google (I) (P) Ltd., that it had paid the taxes, has not been filed in the appropriate form and manner. In such a case, the authority should ask the party concerned to submit the same in proper form and manner. It is only thereafter that, a view can be taken on the same. The Authorities of the State are not expected to take advantage of a citizen / assessee s ignorance. So also the technical evidence led is ignored without pointing out why it is not acceptable, by cross examining the technical expert or by leading contrary evidence. It is not open to the Authority to ignore the evidence / submissions made by the party as it is not the object of quasi judicial authority to confirm their prima facie view, but the object is to find the correct facts and thereafter apply the law to those facts and take a decision in terms th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at demands are likely to be raised on passing of fresh orders under Section 201(1) and (1A) of the Act, which will impact the certificate to be issued under Section 197 of the Act. Therefore, time may be granted to issue certificates under Section 197 of the Act after orders are passed in Section 201(1) and 201(1A) of the Act. This Court by an order dated 3rd September, 2019 extended the time to issue the certificates under Section 197 of the Act upto 9th September, 2019. Therefore, it did not accept the Revenue s submission to extend the time till orders are passed under Section 201(1) and 201(1A) of the Act. 13. It is in the aforesaid circumstances, we note that when the petitioner filed representation on 9th September, 2019 in respect of the proceedings under Section 201 and 201(1A) of the Act, the respondent no.1 the Income Tax Officer (TDS) in undue haste passed an order determining huge sums payable by the petitioner for the Assessment Years 2017-18, 2018-19 and 2019-20 for failure to appropriately deduct tax. This entire exercise was done in undue haste as the respondent Revenue i.e. Respondent No.2 the Dy. Commissioner of Income Tax was obliged to issue the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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