ALSTOM RAIL TRANSPORTATION INDIA PRIVATE LIMITED V. DEPUTY COMMISSIONER OF INCOME-TAX (TDS)

SCA/12647/2019

AI Insights

The case involves M/S. Bombardier Transportation India Pvt Ltd, which was acquired and renamed to Alstom Rail Transportation India Pvt Ltd, contesting a demand for TDS under Sections 201(1) and 201(1A) of the Income Tax Act. The petitioner had remitted a substantial amount to Bombardier Transportation Canada INC, part of which was not subjected to TDS, claiming exemption under the 'make available clause' of the Double Taxation Avoidance Agreement. After a series of appeals and administrative complaints, the petitioner sought a refund of Rs.50 lakhs paid under protest, which was delayed by procedural requirements and technical issues at the Deputy Commissioner of Income Tax's office.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 725740 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 23-01-2023
• Assessment Year: misc
• Other Referred Cases: Vodafone Idea Ltd. V/s Commissioner of Income Tax [2019] 267 Taxman 408
• Laws Referred To: Double Taxation Avoidance Agreement, Section 201(1), Section 201(1A)
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VARUN PATEL
• Assessee Lawyers: B S SOPARKAR
• Keywords: Assessment Year 2013-14; Income Tax; Make available clause; Refund; TDS
• Section: 201(1); 201(1A)

Judgement Text

"C/SCA/12647/2019 ORDER DATED: 23/01/2023 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 12647 of 2019 ========================================================== M/S. BOMBARDIER TRANSPORTATION INDIA PVT LTD Versus DEPUTY COMMISSIONER OF INCOME-TAX (TDS) ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE SANDEEP N. BHATT Date : 23/01/2023 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. We have heard the learned counsel on the draft amendment. Draft amendment is permitted to be carried out forthwith. 2. The original petitioner company-Bombardier Transportation has been acquired by the present petitioner with the change of the name which has taken over all the responsibilities of the erstwhile company. Thus, the petitioners in place of M/s Bombardier Transportation India Private Limited would be Alstom Rail Transportation India Private Limited. Page 1 of 8 C/SCA/12647/2019 ORDER DATED: 23/01/2023 3. It is engaged in the business of manufacturing of trains. In the financial year 2012-13, the petitioner remitted Rs.35,09,92,996/- to the Bombardier Transportation Canada INC for certain expenses. The tax was deducted on payment of Rs.16,45,31,524/-, but the tax was not withheld on the payments of Rs.16,41,18,167/-. This according to the petitioner, on account of availability of `make available clause’ under Double Taxation Avoidance Agreement, vide order under Section 201(1) and 201(1A) dated 20.2.2015, the DCIT International taxation was of the opinion that the petitioner ought to have deducted the tax on payment of Rs.16.41 crore and raised the demand under Section 201(1) and 201(1A) for a sum of Rs.2,29,49,177/- and Rs.52,78,311/- respectively. The petitioner made payment of Rs.50 lacs under protest on 18.3.2015 and filed appeal before the Commissioner of Income Tax (Appeals) (`CIT(Appeals)’). 4. The CIT(Appeals) allowed the same on 21.12.2015. The demand was made nil on 12.1.2016. Page 2 of 8 C/SCA/12647/2019 ORDER DATED: 23/01/2023 5. The appeal to the Income Tax Appellate Tribunal (ITAT) by revenue was dismissed on 3.1.2017. The refund was requested for the sum of Rs.50 lacs paid under protest. Letter was also communicated to Joint Commissioner of Income Tax (international taxation) on 1.7.2016. 6. It seems the complaint to the CPGRAM for refund on 19.6.2017 which provided the reply on 11.7.2017 and 2.8.2017 directing the effect to be given to the appeal. Again the petitioner approached on 16.10.2017 the CPGRAM that it was made to run from pillar to post. 7. On 20.2.2018, the petitioner received the letter from the respondent seeking the details which had been provided to the DCIT on 7.3.2018. On 16.4.2018, it communicated for filing the fresh online application in Form 26B on the TRACES so that the office of the Deputy Commissioner of Income Tax is unable to process the request as certificate of no demand outstanding against PAN/ TAN was needed from the jurisdictional AO alongwith the details of the bank account. Page 3 of 8 C/SCA/12647/2019 ORDER DATED: 23/01/2023 8. This, according to the petitioner, has been done for which the communication had been addressed to the Deputy Commissioner of Income Tax on 28.1.2020 pointing out that the company again applied for online application on form 26B for assessment year 2013-14. The challan of Rs.50 lacs had reflected unconsumed for the amount of maximum refund allowed was shown as nil and entire amount shown as remaining available balance. 9. We find the very contents in e-mail sent on 27.1.2020 addressed to TDS helpline, where the grievance is raised that for the assessment year 2013-14, the TDS of Rs.50 lacs had been paid, the order had been pronounced in favour of the companies of ITAT, a written request to the assessing officer was made along with form 26B, however, it was not processed and the assessing officer had asked to file form 26B for processing refund of Rs.50 lacs. However, while submitting form 26B, another grievance is that the refund amount is reflected as nil though the entire amount is not utilized. Page 4 of 8 C/SCA/12647/2019 ORDER DATED: 23/01/2023 10. Even if there is nothing to show as to how the communication has gone on 30.1.2020, reflecting the same, the fact remains that the e-mail sent on 27.1.2020 has gone through the electronic mode and there cannot be any doubt with regard to its reaching the person whose e-mail id is provided. Nothing appears to have been done thereafter. 11. The Bombay High Court in case of Vodafone Idea Ltd. V/s Commissioner of Income Tax reported in [2019] 267 Taxman 408, was considering a case of a refund where the assessee suffered sizeable deduction of tax at source. The refund of huge amount had arisen on account of the computer glitch at the Central Processing Centre which was conveyed by the department that the assesse’s refund claimed could not be withheld. The department was directed to release the refund with statutory interest after manually quantifying the same. “7. When material facts are nt disputable, we do not see any reason why the petitioner should not get the refund which flows from the order of assessment. The department does not dispute that the demands for other assessment Page 5 of 8 C/SCA/12647/2019 ORDER DATED: 23/01/2023 years of the petitioner are presently not enforceable. That being the position, the refund of the petitioner arising out of the order of assessment for the said assessment year 2014- 15, cannot be withheld, that too on the ground of technical difficulty of the system not accepting such a declaration of stay of the demands and giving effect to such position. 8. The computer system and auto generation or any difficulty in doing so in a particular case, cannot override the correct legal position. In the present case, the correct legal position is that the petitioner must receive the refund. Whatever the technical difficulties in releasing the refund, the department must sort it out. If for some reason of technical glitch the system in the present case fails to permit the payment of refund, the concerned authorized officer must manually do so. We, therefore, direct the respondents to release the petitioner’s refund amount of Rs.224,28,74,090/- with statutory interest, which shall be done within a period of two weeks from the date of receipt of this order. 9. Before closing, we observe that this situation cannot be peculiar to the petitioner alone. Surely, before the department, there would be large number of cases of assessees where the refund claim out of an order of assessment or appellate order arises as against which the same assessee may have demands for other assessment Page 6 of 8 C/SCA/12647/2019 ORDER DATED: 23/01/2023 years, recovery of which, may have been suspended. In all such cases, similar difficulty may be faced by the department. We except the department to address this larger issue so that similar disputes do not have to travel to the High Court for resolution.” Except the fact that there was no form filled by the petitioner in form 26B for the department to process the refund of Rs.50 lacs, no other ground is emerging. 13. Learned advocate Mr.Patel, on instructions, volunteered that within three months, it shall be in a position to complete the same noticing the fact that the company has changed its name with all its past and future liabilities. Of course, it has been given e-pan number and it is the same pan number which was with M/s Bombardier Transportation, however, necessary procedure shall need to be completed by the petitioner and name change with supporting documents shall go to the concerned officer-ACIT Income Tax Vadodara both e- copies and physical copies through registered letter within one week from the date of receipt of this order. Let process be completed in a three months’ period, after receipt of such copies. If not done within three months, Page 7 of 8 C/SCA/12647/2019 ORDER DATED: 23/01/2023 the amount of compensation to be paid shall be Rs.1 lacs. 14. This petition stands disposed off in above terms. (SONIA GOKANI, J) (SANDEEP N. BHATT,J) SRILATHA Page 8 of 8 "