Karnataka High Court
The Medi Assist India Tpa (P) Ltd vs Deputy Commissioner Of Income Tax (Tds) on 14 March, 2012
Equivalent citations: 2012 (2) AIR KAR R 631
Bench: N.Kumar, Ravi Malimath
_ 1 _
IN THE HIGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 14"' DAY OF MARCH 2912'
PRESENT
THE HON'BLE MR. JuSTIcE..4H;,K'uM:A,R---.
AN? « t t . 1
THE HON'BLE MR.JustTIV¢pE RAVT' i~1_AL1MAT,H
WRIT ARREALViT"NaOi--454'4% O--F','2O'09(T-IT)
WRIT APPEAL.NQS.4V5'4'5~4548.&_é§:4-9{'5vO OF 2Oo9(T-IT)
WRIT.PE1TITIOli_NQ.S.6385-6386 OF 2010 &
i \/\:_'..fPTN'OS.,64~7f-:1,--'6~473 OF«2O1o(T-IT)
wA.Mos_.4AS'744 &«45v4_.';;.'454§ & 4549-so OF 2009:
BETW'EEN:' 1
1. The Medi Assist India"TPA (P) Ltd.,
§S'niJ.pa Vidya', 3'" 'Floor,
":-.1o,..49,.__I Maih' Read,
'Sa"rai<ki"I.ndustria| Layout,
~I1Ix.S_ta,q'e, 'J.P.Nagar,
Ba"i'1g'aJ_OFe'-4' 560 078.
A ' "Represented by its
'~.ChE__ef Executive Officer,
Sri B_.Madhavan,
.. Aged about 54 years,
_ "S/O Sri M.Balasubramanian.
2. The Association of Hospitals
amended as per
Having its Registered office court order dated,
At Bombay Hospital, 14"' Floor,
New Wing, 12, New Marine Lines,
Mumbai -- 400 020,
Represented by its President,
Col. Manesh S.Masand.
(By Sri Sarangan, Sr.Counsel for Sl'r~.*.1t,V._ani " R' v
Sri K.P.Kumar, Advocate for'M/.s_.Kingv-& . A '
Patridge, Advocates)
AND:
1.
Deputy Commissioner»
Income
Circle--1,8(.1),5jNo.5.9',« 47", Flo_orf,* .
HMT B:l1av_,an, "BellaryIfRo'ad.,,,«
Bangalo'r.e'"---- 1560 Cl_,3'2. *
. The C.omVm'i"ssVi.oVrser'of"Income Tax (TDS)
Cir'c.le--18V(1.), 'l59,l'i'4§"...Floor,
HMT Bghalvan', B'e.l,la.ry"'--Road,
Bangalore"--.560 0_32~*."
._ ...':,_dCen.tral_ Board 'o-f----Direct Taxes
V' Represented by Under Secretary,
'~ T "O T.D"ivi's.i,on, 4"' Floor,
._ "'.__J.eev.an_ De'e'p Building,
A , Parlia'men't Street,
""---New Delhi -- 110 001.
uniori Of India
"Ministry of Finance,
A 'Department of Revenue,
Represented by
18.02.2010,"=_:'f.._
_-,__ ;LAPéeLLANTS=_d
4 F COMMQNf_f
(By Sri K.P.Kumar, Sr.Counsel for M/s.King & Patridge,
Advocates) I
AND:
1. The Deputy Commissioner of
Income Tax (TDS) . -r
4"' Floor, No.59, HMT Bhavan, 2
Bellary Road,
Bangalore -- 560 032.
2. The Central Board 'o_f:D_irect;.fra>&es-i
Ministry of Finance, .' A V °
North Block,..Rajpath~--v. _ '
New Delhi ~--._11_o ofo1 , V
Represen.ted;?ri'e.rein.by its 3 V
Chairrr:ian.;q "
...RESPONDENT5
(By Sri"MohVaTn Parasaran"-Addl'["S'o'l'icitor General, with Sri D;L.Chidan.an...da,, Ad_y'0cate.'for Sri M.V.Seshachala and Sri K.\'/._Ara_vind, A,"d.yocate,s)_, A **** T_hes_e \Alri'tvv-Petitions filed under Article 226 of the .A C«onsti,tution"'of India praying to quash the 1" Respondents gordegr "d4a't.e_d .n..?v1"."O1.1O vide Annexures--P & Q passed under Sections. and 201(1A) of the Act for the Financial Years 2oo8-o9 (March 2oo9) and 2009-10 (April, May and 'jurnge 2009) and the consequent demand Notice dated it =_21--.Oé1.201O vide Annexures-- R & S demanding a sum of i,/ Rs.4,23,18,325/-- and Rs.11,71,38,698/- for the Financial Years 2008-2009 (March 2009) and 2009-1O(AypVri».l_{"'ilYlay and June 2009) respectively.
These Writ appeals and Wr_iJt...P,€_3titio-n's'coming for final hearing this day, KUMAR J.,ideliyered't_h{e_fo.llowi-enpwgvwzfa .é JUDG'M:'_i"_*i_l_I 3 The appellants passed by the learned Single Judge. set aside the order of authority holding th€a.tV.VS~eV:itiyQ.ii the facts of this case.
In 6386/2010 the petitioner has challenged" passed by the assessing autljioflty. l.?low_e\/er, in view of the orders passed directing ti'u'ibhin;j' of.__those Writ Petitions with the above Writ Ap'pela'lsftbleyflare placed before us for consideration.
" In substance what is challenged in the Writ A' '.._Peti.tions is the order passed by the assessing authority. lit/i the order passed by the learned Single Judge and permit the appellants to prefer a statutory appeal and urgegfall'-~the grounds which they had urged before the Judge and other grounds which a,ccordin_-g"'to".:t_ij.eVrn rsotu considered by the learned appellate authority. In view'. of the fact tha*t;tlA:{etpetitioner.i"
has an alternative and effica:ci'o..us-remedy_weygvyvdecline to entertain the Writ 'p'egi*rn:i't.»'the petitioner to prefer a statutory appeal.a'nd'V'-Vchcayllengge'.{the said order on all in accordance with law.
.'§ 3,' ° proceedings apart from the assessment%ovrder._ an_d"~.-the order passed by the learned Siyl:l_§:!e§_;gJA"udVyge t'h'evv-appellants and the petitioner have also ' .ch"a!len.ged_'"the-.Circular No.8/2009 issued by the Board on i24i"i'No'vén¢i5e*e}, 2009, regarding the applicability of the proyisivotnsv under Section 194(i) of the Income-Tax Act, if A:19i6-1', in the course of transactions by the third party administration (PPP Hospitals) etc. After hearing the \i/ learned counsel appearing for the parties rega4rdVin_c:ji~.Vthe validity of the said Circular, we decline same. All that is to be said is thatthe app'e!l.ajte "aut<hVority'~~ . shall decide the appeals keepingigin miprivdli't,h.e_'l'aw."if-elf when the orders passed by those authorities'VdA'o_:ag_ainét assessees, it is open to the to"chall':end]e not only the said order but _tr§_e question if they choose to do so. it h C C
4. the Circular it is made cle{e3.,;4.i5.'.o:w.V»V be calculated. The the said Circular instead of calculatingj the date of payment of the tax by4§th'e_ded.ucte_es'y the interest is calculated up-to the due o'l.*:"f§l:i'rig._ of return. In fact this Court had an occasion question in the case of SOLAR AUTOl§_i'OBli_lES INDIA (P) LTD., vs.DEPUTY ._coMivn--ssIoNER OF INCOME--TAX reported in 2011-TIOL-- it ';_V815'5--HC--KAR--IT where at para--9 it is held as under:--
W/C. "9. In so far as payment of interest"-,j under Section 194A is concerned, the interest:-tT."'vv.
is payable for the period it is not paid 'V' deduction. The principal liability of is that of the creditor and'Ja"Vs'ta«tut-ory' V' cast on the debtor to deduc't.Vta;.'§lon if of interest payable and'«-.r_emit'the sarne' tjo~»the5 company irrespective ofl'lia_Vbi/ity of' principal debtor. Unless" the principalVV'''debtor ' files the return and pays'. . -ta'X,_ then' the _ vicarcious liability exists one'-thhejjpersonsfvvhyo'.should have deducted" 'source jv ve deducted at s-:our'ce..'"""The 're~vei214e.cannot collect tax on vVinterestv"fr:o-tn'._both._tne p.r.inc'ipa/ and the agent. ajn _that;'¢on'tex"t,,_""-the forder passed by the at/th'orities."hloldir:.§j'that the assessee is liable to pay inte/fesz~i,_fror'n the date of default till the date ofltheorder is erroneous. However, the akuthhorities have to find out whether the V -- :clr.r;f':o';'l?or_vlj;.as filed the returns and paid the tax. A Ifhé filed the returns and paid the tax, the liability of the assessee ceases from the day they have paid the tax. That exercise is H possible only after verifying the records of both the assessee and the creditor of the assessee. V
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To that extent the impugned order passed is set aside. Accordingly, the appeal is paVrtiyi7._V allowed and the matters are remitted the Assessing Authority to underta.'l:<:e exercise and find out the J/iahi/ity_.'o'finterest',V _ payable by the assessee. accotrdingly; A is No Costs, ', 1 ' '-- --. "
Even otherwise the law is wVe!.!l:s'ettled. th.at'th.e payment of interest under the in nature. The authorities sha'i'l,§_'re--do""th1e calculating the interest apd dernand if they choose to recQ_V--€T_\thfé' "vxio.ulVd}meet the ends of justice. With:V"t,%he--. the Writ Petitions and Writ Appeals aer_e"dispQsed i A .:I't*A.th.e:"'appeals are filed within 30 days from the date ~.ot.--..receip't~..0t;;.'copy of this order, the appellate authority 'withoult going into the question of limitation. shall e'-nate'r'tain the appeal and decide the appeal on merits ll./I
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The parties to bear their own costs. Rsk