Wipro Ltd. v. Dy. CIT [ITA No. 581/Bang/2019, dt.
15-10-2020] : 2020 TaxPub(DT) 4245 (Bag.-Trib.)
Retrospective amendment in law -- Imposing TDS obligations
Facts:
Assessee had to pay to Gartner group which was held in
their favour as not akin to royalty vide various verdicts. Subsequent verdicts
came in favour of the department based on retrospective reading of the amended
statute where in such payments were held to be royalty and taxable; these
subsequent verdicts were applied in assessee's case as well holding assessee in
default for non-deduction of TDS under section 201 in the case of earlier years
where the retrospective amendments were not there nor were the later court
decisions which went in favour of the revenue. Assessee did not do TDS on these
payments based on the favourable verdicts which they had obtained for earlier
assessment years and was on bona fide belief that these were not
royalty. On higher appeal -
Held in favour of the assessee that the bona fide belief
of no TDS was applicable was based on favourable verdicts. A retrospective
amendment and a subsequent decision could not have been foreseen by the
assessee on clairvoyance thus no default can be imposed by way of subsequent
amendments/reading of later decisions on the assessee for prior years where
they were on bona fide belief and no TDS was done by them.
Editorial Note: The
principle applied is Lex cogit ad impossibilia -- Law cannot expect one
to perform an impossibility.
Applied:
(a) Teekays Interior Solutions (P) Ltd. (ITA No. 400/Bang/2017)
: 2019 TaxPub(DT) 2477 (Bang-Trib)
(b) Infineon Technologies India (P) Ltd. (IT(TP)A No.
405/Bang/2015)
(c) GE Medical Systems India (P) Ltd. (ITA No.
1368/Bang/2019)
(d) WS Atkins India (P) Ltd. (2015) 41 ITR(T) 397
(Bang.-Trib) : 2015 TaxPub(DT) 3019 (Bang-Trib)