9911796707
TMI Blog2023 (7) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... r Section 201(1) and interest under Section 201(1A) of the Act. Petitioner is challenging this order. 2. Petitioner is the agent of one Hapag Lloyd AG with effect from 1st January 2007. Petitioner supports Hapag Lloyd AG (the principal) in booking and collection of freight in India. The principal operates ships in international traffic and owns several ships which transport goods and cargo on international routes. The principal's vessels were incapable of docking at Indian Ports in view of the size and, therefore, the principal has arrangements with other shipowners who have smaller ships to carry the cargo booked by principal from the Indian Port to other Ports where principal's vessels go and pick up the cargo. The principal's ships are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mating the Income Tax Department every time it has remitted freight collected by it to its principal and until the Assessment Year 2019-2020, the Department has never questioned any such non deduction by petitioner when remitting the funds collected on behalf of the principal to the principal. 5. For Assessment Year 2019-2020, petitioner filed its return of income on 30th November 2019 declaring an income of Rs. 10,10,78,510/-. Alongwith the return, petitioner also filed Form 3CEB disclosing all transactions with its principal including the remittances made by petitioner to its principal. Respondents have accepted the return of income filed by petitioner. 6. It is petitioner's case that the principal being a resident of Germany is entitle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 2023, petitioner highlighted the fact that the issue of taxability of freight from transportation undertaken through feeder vessels is no longer res integra, in that the issue has been settled by several orders of the Tribunal from years beginning Assessment Year 2006-2007 as also by the orders of this Court upholding and confirming the orders of the Tribunal. 9. It is petitioner's case that notwithstanding giving a satisfactory explanation, respondent no. 1 passed an order 30th March 2023, which is impugned in this petition, under Section 201 of the Act holding petitioner to be in default of not having deducted tax at source from the remittances relatable to transshipment undertaken through feeder vessels (feeder income) and consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment of the Apex Court in GE India Technology Cen. (P.) Ltd. V/s. Commissioner of Income Tax 327 ITR 456 (SC), Mr. Thakkar submitted that tax deducted at source was liable to be deducted by the payer on the gross amount if such payment included in it an amount which was exigible to tax in India. This was an alternative submission to the submission made by Mr. Thakkar that in any event, petitioner was not making any payment to its principal but was only remitting to the principal the money that belonged to the principal which petitioner had collected in India on behalf of the principal. Mr. Thakkar concluded by submitting that the only basis on which the order has been passed is that the issue as to whether the income of the principal b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. There is no such suspension in the case of petitioner. The Apex Court went on to hold that if this healthy rule is not followed, the result will only be undue harassme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not "acceptable" to the department - in itself an objectionable phrase - and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assessees and chaos in administration of tax laws. (emphasis supplied) 14. Having considered GE India Technology Cen. (P.) Ltd. (Supra), the law is very clear in as much as the payer is bound to deduct tax only if the tax is exigible in India. If t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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