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The present appeal filed by the assessee is directed against the order passed by the ld. CIT(A)-60, Mumbai, dated 12.12.2019 for A.Y. 2018-19. The assessee has raised the following grounds before us:

"General

1. Treating the Appellant as an 'assessee in default' under section 201(1) of the Act for non- deduction of tax at source under section 194C read with section 206AA of the Act amounting to Rs.102,01,00,959 (which includes Rs. 26,49,49,072 where provisions of section 206AA has been applied), with respect to disbursements made to Driver-Partners on behalf of Uber BV:

19. Not appreciating that the liability to deduct tax is a vicarious liability and the Appellant cannot be treated as an 'assessee in default without establishing/ ascertaining that the Driver-Partners (all who are residents of India), have any tax liability or have already discharged/ paid applicable taxes on their income;

20. Confirming the applicability of withholding tax at the rate of 20% under section 194C read with section 206AA of the Act, even after providing the bank account details of those Driver-Partners for which PAN were not available with the Appellant. Further, the Learned CIT(A), has erred in not providing an opportunity to the Appellant to submit additional PAN's of the Driver-Partners as collated by the Appellant from Uber B V

Uber B.V. (UBV) is an entity incorporated in the Netherland and Uber India System Pvt. Ltd. (UI) is an entity incorporated in India. UBV is the legal owner of an app or mobile software application called the Uber App. Through the app transportation services are provided wherein a passenger wanting a ride is brought in touch with a driver/vehicle owner willing to offer a ride. Uber BV India is involved in the recruitment and training of drivers, getting their verification done from the police acting as the physical point of contact for the users/drives/authorities taking care of legal and statutory responsibility etc. It was also involved in the task of collecting money from the passenger for the ride, collecting commissions and making payment to the drivers for the ride. The Uber operates through an app mostly and can also be accessed from the website. The Uber can be downloaded to the smart phone and passenger above 18 year of age can registered with Uber by providing certain personal information and payment information. After acceptance of the terms and conditions, the passengers/riders/users becomes eligible for a ride or trip through Uber. Once the driver accept, Uber confirm the booking of the passenger and allocates the trip to the driver. The fare is calculated by Uber based on GPS data from the driver's smart phone and accounts for the time spent and distance covered. The assessing officer stated that while logging in, the agreement of Uber BV appears on the screen and by accepting the same, the driver/vehicle owner become party to the agreement. The customer has the option to make payment either using paytm /credit card or in cash. When a payment is made through paytm or credit card, the same is credited to the account of M/s Uber India System Pvt. Ltd. and when the payment is made in cash the same is handed over to the driver. The payment to the driver is made after P a g e |5 Uber India Systems pvt. Ltd. Vs. The DCIT(TDS)-2(3) deducting a service fees for the use of the app and the quantum of the same is 20% of the fare. The amount which have been collected by the driver in cash are deducted from the payout that are to be made then net amount to be paid. The A.O observed that as per the provisions of Sec. 194C of the Act, any person responsible for paying any sum to any recipient (hereinafter in this section referred to as the contractor) for carrying out any work (including supply of labour for carrying out any work) in pursuance of a contract between the contractor and a specified person shall at the time of credit of such sum to the account of the contractor or at the time of payment thereof in cash or by issue of a cheque or draft or by any other mode, whichever is earlier deduct an amount equal to 1% where the payment is being made or credit is being given to an individual or Hindu Undivided Family, 2% where the payment is made or credit is being given to a person other than an individual or Hindu Undivided Family. Therefore, the A.O was of the view that since assesse was making payment to drivers or vehicle owner for carrying out passenger transport services and therefore was liable to deduct tax @ 1% on the amount that has been paid. Further, the deduction need to be done at 20% of the amount paid in case the payment has been made to person without obtaining PAN as prescribed u/s 206AA of the Act. The AO has stated that the payments have been made in pursuance to contract between the driver/vehicle owner and Uber BV this is automatically signed when the drivers logs into the Uber app. Therefore, there is liability for TDS u/s 194C of the Act. The assesse had explained that since the payment was made by an individual to the driver/vehicle owner for the transportation service, there was no liability to deduct tax for Uber. The assesse submitted that it did not provide any transportation service and it was a mere technology platform that had brought the rider/user and the driver together. However, the A.O was of the view that the driver was actually P a g e |6 Uber India Systems pvt. Ltd. Vs. The DCIT(TDS)-2(3) under the control of Uber as he has been contacted for a specific request by Uber and client has not right to select a particular driver. The A.O further stated that what the driver does whom he drives and on what price is as per the instructions of Uber and that makes it clear that the driver is the contractor for Uber doing a work that was contracted to Uber by the passenger. Therefore, in the case of cash payment made by the rider/user the driver is merely collecting money on behalf of Uber and he is not collecting the fare. The AO further stated that there is a contract between Uber and the driver has performed work in pursuance of the same is enough for the purpose of the act to fix liability u/s 194C of the Act. The A.O stated that there is clear case of contract with passenger being sale contracted to the driver for price and the liability for TDS is definite. The applicable Sec. 194C of the Act and the rate at which the deduction is to be made is 1% of the amount paid to the driver and Uber India as the agent of Uber BV will make payment from its local bank account maintained with Deutsch Bank to Indian partners. Even in the case of any dispute on the issue of payment the contact point for the driver for settlement was the Uber India office. The AO further stated that the entity Uber BV is the name sake entity was which merely is party to an agreement by virtue of a legal fiction which has no connection with the real service provided in India. Therefore, the A.O treated that assesse was deemed to be in default u/s 201(1) for an amount of Rs.102,01,00959/- and also deemed to be default u/s 201(1A) for amount of Rs.11,83,55,112/- for A.Y. 2018-19.