|
Tax Publishers
ITO v. S.S. Netcom (P) Ltd. [ITA No. 461/Gau/2019,
dt. 18-11-2020] : 2020 TaxPub(DT) 4821 (Gau.-Trib.)
Payments to Tribals whose income is exempt under section
10(26) whether hit by TDS obligation disallowance?
Facts:
Assessee had made payments to certain Tribal vendors on
which no TDS was done. These were disallowed by assessing officer on appeal the
Commissioner (Appeals) allowed the same on the premise that under section
10(26) their incomes were exempt and once there was no tax liability for them
the obligation to do TDS does not arise applying GE India Technology Centre
(P) Ltd. v. CIT, (2010) 327 ITR 456 (SC) : 2010 TaxPub(DT) 2241 (SC) decision.
Aggrieved revenue went in appeal --
Held against the revenue that when the income was exempt in
the hands of the recipient no TDS obligations arose in the hands of the payer.
The order of Commissioner (Appeals) does not call for interference.
Editorial Note: The GE
Technology Apex Court decision was rendered in the realm of section 195
which has a phrase "or any other sum chargeable under the provisions of
this Act", a similar phrase is also seen in section 194C/194J but with a
different wording "of such sum on income comprised therein" or the
word "income" is simply used as in section 194A/194-I. The word income
is referred to in section 2(24) where it is also an agreed fact that incomes
which fall under section 10 are not treated as taxable income or do not fall
under the head of income per se. It was this principle which was drawn
here. Nonetheless TDS being a vicarious responsibility if the actual recipient
has discharged the tax obligation the payer cannot be called to make good the
same tax once again. At best interest loss for time value of money may be
fastened.
|