Delhi High Court - Orders
M/S Dabur India Ltd vs Commissioner Of Income Tax Tds & Anr on 17 January, 2023
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~42 to 47, 50 & 51
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 493/2023 & CM Nos.1971-72/2023
M/S DABUR INDIA LTD ..... Petitioner
versus
COMMISSIONER OF INCOME TAX TDS & ANR.... Respondents
+ W.P.(C) 499/2023 & CM Nos.1983-84/2023
M/S DABUR INDIA LIMITED ..... Petitioner
versus
COMMISSIONER OF INCOME TAX (TDS) & ANR... Respondents
+ W.P.(C) 500/2023 & CM Nos.1985-86/2023
M/S DABUR INDIA LTD ..... Petitioner
versus
COMMISSIONER OF INCOME TAX TDS & ANR... Respondents
+ W.P.(C) 501/2023 & CM Nos.1987-88/2023
M/S DABUR INDIA LTD ..... Petitioner
versus
COMMISSIONER OF INCOME TAX TDS ..... Respondent
+ W.P.(C) 502/2023 & CM Nos.1989-90/2023
DABUR INDIA LIMITED ..... Petitioner
versus
COMMISSIONER OF INCOME TAX (TDS) & ANR. ..Respondents
W.P.(C) 493/2023 & connected matters page 1 of 8
Signature Not Verified
Digitally Signed By:TARUN
RANA
Signing Date:19.01.2023
16:13:03
+ W.P.(C) 503/2023 & CM Nos.1991-92/2023
DABUR INDIA LTD ..... Petitioner
versus
COMMISSIONER OF INCOME TAX (TDS) & ANR... Respondents
+ W.P.(C) 526/2023 & CM Nos.2115-16/2023
M/S DABUR INDIA LTD ..... Petitioner
versus
COMMISSIONER OF INCOME TAX (TDS) & ANR... Respondents
+ W.P.(C) 527/2023 & CM Nos.2117-18/2023
M/S DABUR INDIA LTD ..... Petitioner
versus
COMMISSIONER OF INCOME TAX (TDS) & ANR.. Respondents
Present : Mr M.P. Rastogi and Mr Manu K. Giri, Advs. for petitioner.
Mr Puneet Rai, Sr. Standing Counsel with Ms Adeeba Mujahid,
Adv. for the Revenue.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MS. JUSTICE TARA VITASTA GANJU
ORDER
% 17.01.2023 [Physical Hearing/Hybrid Hearing (as per request)] CM No.1972/2023 in W.P.(C) 493/2023 CM No.1984/2023 in W.P.(C) 499/2023 CM No.1986/2023 in W.P.(C) 500/2023 CM No.1988/2023 in W.P.(C) 501/2023 CM No.1990/2023 in W.P.(C) 502/2023 CM No.1992/2023 in W.P.(C) 503/2023 CM No.2116/2023 in W.P.(C) 526/2023 CM No.2118/2023 in W.P.(C) 527/2023
1. Allowed, subject to just exceptions.
W.P.(C) 493/2023 & connected matters page 2 of 8 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:13:03 W.P.(C) 493/2023 & CM No.1971/2023 W.P.(C) 499/2023 & CM No.1983/2023 W.P.(C) 500/2023 & CM No.1985/2023 W.P.(C) 501/2023 & CM No.1987/2023 W.P.(C) 502/2023 & CM No.1989/2023 W.P.(C) 503/2023 & CM No.1991/2023 W.P.(C) 526/2023 & CM No.2115/2023 W.P.(C) 527/2023 & CM No.2117/2023 [Applications filed on behalf of the petitioner seeking interim relief]
2. Issue notice.
2.1. Mr Puneet Rai accepts notice on behalf of the respondents/revenue.
3. Mr Rai has returned with instructions. Mr Rai says that, in view of the time-bound directions that we intend to pass, counter-affidavits are not required to be filed in the above-captioned writ petitions.
4. Thus, with the consent of the learned counsel for the parties, the above-captioned writ petitions are taken up for hearing and final disposal, at this stage itself.
5. These writ petitions, in effect, assail the order passed by the Commissioner of Income Tax (TDS), whereby the petitioner's application for complete stay on the demand(s) raised by the Assessing Officers (AOs) was rejected. The impugned order, instead, granted stay subject to payment of 15% of the demand.
6. The AOs, in each of the cases which are the subject matter of the above-captioned writ petitions, have, broadly, concluded that the petitioner should have deducted tax at source with regard to the free samples of goods provided to its distributors and stockists under the extant sales promotion scheme.
W.P.(C) 493/2023 & connected matters page 3 of 8 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:13:03
7. The provision, which, according to the AOs, gets attracted in such circumstances is Section 194H of the Income Tax Act, 1961 [in short "Act"].
7.1 Besides this, in some Assessment Years (AYs), it appears that the petitioner has not deducted tax at source in the payments made with regard to commission, professional fee and qua those payments which have been made to contractors. The relevant details with regard to the demand raised and the orders passed under Section 201(1)/201(1A) of the Act, which concern periods which fall within the ambit of each of the above-captioned writ petitions, are set forth hereafter :
W.P.(C) AY FY Demand raised Impugned Impugned order in Whether written Order before W.P.(C) submissions have been CIT(TDS) filed in the appeal passed under before CIT (A).
Section
201(1)/201(A)
493/2023 2015- 2014- Rs.3,81,34,303/- 04.08.2021 16.12.2022 Filed
2016 2015
499/2023 2014- 2013- Rs.2,60,67,970/- 08.09.2020 16.12.2022 Filed
2015 2014
500/2023 2016- 2015- Rs.2,31,24,244/- 04.08.2021 16.12.2022 Filed
2017 2016
501/2023 2019- 2018- Rs.1,43,11,939/- 04.08.2021 16.12.2022 Filed
2020 2019
502/2023 2020- 2019- Rs.1,50,82,843/- 04.08.2021 16.12.2022 Not filed
2021 2020
503/2023 2017- 2016- Rs.1,57,72,539/- 04.08.2021 16.12.2022 Filed
2018 2017
526/2023 2018- 2017- Rs.2,10,18,046/- 04.08.2021 16.12.2022 Not filed
2019 2018
527/2023 2013- 2012- Rs.2,30,55,435/- 08.09.2020 16.12.2022 Filed
2014 2013
W.P.(C) 493/2023 & connected matters page 4 of 8
Signature Not Verified
Digitally Signed By:TARUN
RANA
Signing Date:19.01.2023
16:13:03
8. It is contended by learned counsel for the petitioner that appeals against each of the orders passed by the AOs, have been preferred with the Commissioner of Income Tax (Appeals) [in short, "CIT(A)"]. Therefore, learned counsel for the petitioner says that pending the decision in the appeals, the demand raised against the petitioner should not be enforced, inter alia, for the reason that Section 194H would have no applicability in the instant case. The cost of free samples cannot be construed as either commission or brokerage. It is only when any person, not being an individual or Hindu Undivided family, is responsible for making a payment to a resident which is in the nature of commission or brokerage, only then, at the time of crediting such income or making payment, tax at source is required to be deducted.
9. It is also contended by the learned counsel for the petitioner that, In any event, the demand with regard to withholding tax cannot be raised against the petitioner, although, there may be other consequences such as payment of interest and prosecution for the alleged infractions of the provisions of the Act.
10. As indicated hereinabove, in each of these matters, an application for complete stay on the demand was moved, which has been disposed of via order dated 16.12.2022, by granted stay subject to payment of 15% of the demand. The petitioner, thus, assails, in the above-captioned writ petitions, the said order passed, as noticed right at the beginning, by the Commissioner of Income Tax (TDS).
11. Learned counsel for the petitioner says that the in six (6) out of the eight (8) cases, written submissions have been filed and nothing further W.P.(C) 493/2023 & connected matters page 5 of 8 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:13:03 needs to be stated by the petitioner, unless a query is raised by the Appellate Authority, i.e. CIT(A). Learned counsel for the petitioner also says that the petitioner would be quite satisfied if CIT(A) were to pass an order based on the written submissions already filed, with regard to the six (6) cases, referred to above.
12. Insofar as the remaining two (2) cases are concerned, i.e., W.P.(C)No.526/2023 and W.P.(C)No.502/2023, the petitioner would file its written submissions within two (2) weeks of notice being issued in the pending appeals.
13. We may also note that Mr Rai argued that the petitioner be called upon to pay 15% of the demand, as directed in the order 16.12.2022, in at least two (2) out of the eight (8) cases, in which notice has not been issued and written submissions have not been filed.
14. We are unable to accept the contention of Mr Rai for two reasons.
Firstly, the issue involved in all the appeals pending consideration before the CIT (A) is common. Six (6) of eight (8) appeals are ripe for a decision. The decision in these appeals would also govern, even according to Mr Rai, the remaining two (2) appeals. Secondly, Mr Rai has been unable to point out any provision in the Act, wherein demand can be raised against the petitioner with regard to withholding tax, for the failure to deduct the same at source. Furthermore, the petitioner's contention that the cost of free samples handed over to its vendors cannot be construed as commission or brokerage, is also required to be examined in the pending appeals. At worst, the petitioner is an assessee in default, therefore, only consequences provided in the Act will attach to it. Under Section 191 of the Act, the W.P.(C) 493/2023 & connected matters page 6 of 8 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:13:03 liability for tax, prima facie, would rest on the assessee i.e., the vendors in this case.
14.1. That said, we do that not do not want to express any final view on the merits of this aspect of the matter, since the appeals are pending consideration before the CIT (A).
15. Given the aforesaid position, we are of the view that the best way forward in these cases would be to direct the CIT(A) to dispose of the six (6) appeals in which written submissions have already been filed. 15.1. It is ordered accordingly.
16. Insofar as the remaining two (2) appeals are concerned, reference to which is made hereinabove, the CIT(A) should issue notice within the next five days, whereupon the petitioner should file its written submissions, as early as possible, though, not later than two (2) weeks from the date of receipt of notice.
16.1. CIT(A) will, then, dispose of the eight (8) appeals pending before it within the next eight (8) weeks.
17. Pending the disposal of the appeals, the impugned order in the above- captioned writ petitions i.e., the order dated 16.12.2022, shall remain stayed.
18. Once CIT(A) passes an order in the pending appeals, the fate of the petitioner will be governed by the order that would be passed by the CIT(A).
19. Needless to add, the petitioner will have liberty to take recourse to an appropriate remedy, albeit, as per law, if it is aggrieved by the order passed by the CIT(A).
20. The above-captioned writ petitions are, accordingly, disposed of in the aforesaid terms. Consequently, the pending applications shall also stand W.P.(C) 493/2023 & connected matters page 7 of 8 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:13:03 closed.
21. It is, however, made clear that nothing stated hereinabove will affect the outcome of the appeals preferred before the CIT (A).
22. The parties will act based on the digitally signed copy of the order passed today.
RAJIV SHAKDHER, J TARA VITASTA GANJU, J JANUARY 17, 2023 aj Click here to check corrigendum, if any W.P.(C) 493/2023 & connected matters page 8 of 8 Signature Not Verified Digitally Signed By:TARUN RANA Signing Date:19.01.2023 16:13:03