Appeal details
Counselvise Citation
[2019] 115 COUNSELVISE.COM (IT) 5650 (ITAT-BANGALORE)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 year(s) 9 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
01-10-2019
Appeal Filed By
Assessee
Order Result
Partly Allowed
Bench Allotted
B
Assessment Year
2011-2012
Appeal Filed On
27-12-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI B.R BASKARAN, ACCOUNTANT MEMBER AND SMT. BEENA PILLAI, JUDICIAL MEMBER ITA NO.2886/BANG/2017 ASSESSMENT YEAR: 2011-12 THE KARUR VYSYA BANK LTD., BELLARY BRANCH, BELLARY. PAN BLRKO 7236 F. VS. THE ASST. COMMISSIONER OF INCOME-TAX TDS CIRCLE, HUBLI. APPELLANT RESPONDENT APPELLANT BY : SHRI ANANTHAN, C.A RESPONDENT BY : SHRI R.N SIDDAPPAPJI, ADDL. CIT (DR) DATE OF HEARING : 10.07.2019 DATE OF PRONOUNCEMENT : 01.10.2019 O R D E R PER B.R. BASKARAN, ACCOUNTANT MEMBER THE ASSESSEE HAS FILED THIS APPEAL CHALLENGING THE ORDER DATED 31-10-2017 PASSED BY LD CIT(A), GULBARGA AND IT RELATES TO THE ASSESSMENT YEAR 2010-11. THE ASSESSEE IS AGGRIE VED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE DEMAND RAIS ED UPON THE ASSESSEE U/S 201(1) AND 201(1A) OF THE ACT AND ALSO IN REFUSING TO CONDONE THE DELAY IN FILING APPEAL BEFORE HIM. 2. THE ASSESSEE HEREIN IS A BANK. THE REVENUE CARRIED OUT SURVEY OPERATIONS U/S 133A OF THE ACT. IT WAS NOTI CED THAT THE ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE U/S 194A OF THE ACT FROM THE INTEREST PAYMENT MADE BY IT ON TERM DEPOSITS IN SOME CASES. IN ITA NO.2866/BANG/2017 PAGE 2 OF 19 SOME OTHER CASES, IT WAS NOTICED THAT THE ASSESSEE HAD DEDUCTED TDS @ 10% FROM INTEREST PAYMENT MADE TO SOME OF THE DEPOSITORS WHO HAVE NOT FURNISHED PAN NO., IN WHICH CASE, THE TDS IS REQUIRED TO BE DEDUCTED @ 20%. THE ASSESSEE SUBMITTED THAT IT HAD OBTAINED FORM NO.15G AND FORM NO.15H FROM THE DEPOS ITORS AND ON THE STRENGTH OF THE SAME, IT HAD NOT DEDUCTED TA X AT SOURCE. IT WAS NOTICED THAT THE ASSESSEE BANK HAS NOT FURNISHE D ONE COPY OF FORM NO.15G AND FORM NO.15H TO THE JURISDICTIONAL C OMMISSIONER OF INCOME TAX AS REQUIRED UNDER THE ACT. FURTHER, AS MENTIONED EARLIER, SOME OF THE FORM NO.15G AND FORM NO.15H DI D NOT CONTAIN PAN NUMBER OF THE DEPOSITORS. ACCORDINGLY, THE AO TOOK THE VIEW THAT THE FORM NO.15G AND FORM NO.15H ARE NOT VALID. 3. THE TAX AUTHORITIES ALSO NOTICED THAT THE ASSESSEE HAS PAID COMMISSION (BOTH FINANCIAL & NON-FINANCIAL) TO THE NATIONAL FINANCIAL SWITCH (NFS), WHICH IS MAINTAINED BY THE NATIONAL PAYMENTS CORPORATION OF INDIA (NPCI) WITHOUT DEDUCT ING TAX AT SOURCE FROM THE ABOVE SAID COMMISSION PAYMENT. IT WAS SUBMITTED THAT THE NPCI IS REGISTERED U/S 12AA OF THE ACT AND HENCE ITS INCOME WAS EXEMPT. THE AO DID NOT AGREE WITH THE S AID SUBMISSIONS. 4. IN RESPECT OF PAYMENT MADE TOWARDS ATM SECUR ITY, THE ASSESSEE HAD DEDUCTED TAX AT SOURCE AT THE END OF Y EAR, INSTEAD OF DEDUCTING TAX EVERY MONTH. 5. IN VIEW OF THE ABOVE CITED DEFAULTS, THE AO TREATED THE ASSESSEE HAS ASSESSEE-IN-DEFAULT AND RAISED DEMAND U/S 201 (1) AND ITA NO.2866/BANG/2017 PAGE 3 OF 19 INTEREST U/S 201(1A) OF THE ACT TO THE TUNE OF RS.3 ,73,453/- FOR SHORT DEDUCTION/NON-DEDUCTION OF TAX AT SOURCE. BE FORE LD CIT(A), THE APPEAL WAS FILED BELATEDLY. THE LD CIT(A), HOW EVER, REFUSED TO CONDONE THE DELAY. THE LD CIT(A) ALSO PROCEEDED TO DECIDE THE APPEAL ON MERITS AND CONFIRMED THE DEMAND RAISED UP ON THE ASSESSEE. HENCE THE ASSESSEE HAS FILED THIS APPEAL BEFORE US. 6. THE LD A.R PLACED HIS RELIANCE ON THE DECISI ON RENDERED BY HON'BLE SUPREME COURT IN THE CASE OF IMPROVEMENT TR UST VS. UJAGAR SINGH & ORS (2010-TIOL-46-SC-LMT) AND SUBMITTED THA T THE LD CIT(A) WAS NOT JUSTIFIED IN REFUSING TO CONDONE THE DELAY. HE SUBMITTED THAT THE ASSESSEE BANK WAS CONSTRAINED TO COMPLETE THE AUDIT AS SOON AS POSSIBLE AFTER THE CLOSURE OF THE FINANCIAL YEAR. HENCE THE OFFICIALS AND AUDITORS WERE BUSY IN AUDIT WORKS, WHICH HAS RESULTED IN A DELAY OF ABOUT TWO MONTHS IN FILI NG APPEAL BEFORE LD CIT(A). HE SUBMITTED THAT THERE WAS REASONABLE CAUSE FOR THE ASSESSEE IN FILING THE APPEAL BELATEDLY AND ACCORDI NGLY PRAYED THAT THE DELAY MAY BE CONDONED. 7. THE LD D.R, ON THE CONTRARY, SUBMITTED THA T THE ASSESSEE DID NOT FURNISH PROPER REASONS FOR THE DELAY IN FILING APPEAL BEFORE LD CIT(A). 8. WE HAVE HEARD THE PARTIES ON THIS PRELIMINA RY ISSUE. WE NOTICE THAT THE ASSESSEE IS A BANK AND ITS ACCOUNTS ARE REQUIRED TO BE AUDITED IMMEDIATELY AFTER THE CLOSURE OF THE FIN ANCIAL YEAR. ACCORDINGLY IT WAS STATED THAT THE DELAY HAS OCCURR ED ON ACCOUNT OF AUDIT WORKS, SINCE THE ASSESSEE/AUDITOR WAS BUSY IN AUDIT. IN OUR ITA NO.2866/BANG/2017 PAGE 4 OF 19 VIEW, THE REASON FURNISHED BY THE ASSESSEE FOR THE DELAY CONSTITUTES REASONABLE CAUSE AND ACCORDINGLY WE CONDONE THE DEL AY IN FILING APPEAL BEFORE LD CIT(A). 9. WE HAVE NOTICED EARLIER THAT THE LD CIT(A) HA S ALSO ADJUDICATED THE ISSUES ON MERITS. THE LD A.R PLACED HIS RELIAN CE ON THE FOLLOWING DECISIONS TO SUBMIT THAT THE NON-FURNISHI NG OF COPIES OF FORM NO.15G AND FORM NO.15H TO THE COMMISSIONER OF INCOME TAX WOULD NOT MAKE THE ASSESSEE LIABLE TO DEDUCT TAX AT SOURCE. (A) DCIT VS. VIJAYA BANK, KOTHAGUDEM (2014)(11) TMI 717 ITAT, VISAKHAPATNAM. (B) VIJAYA BANK, GUARGAON BRANCH VS. ITO (2014 (3) TMI 539 ITAT, DELHI) (C) PUNJAB NATIONAL BANK VS. ITO (2016 (9) TMI 392 ITAT, AMRITSAR) IN THE ABOVE CITED CASES, IT HAS BEEN HELD THAT THE PROVISIONS OF SEC. 197A(1A) MERELY REQUIRES A DECLARATION TO BE FILED BY THE PAYEE OF INTEREST AND ONCE IT IS FILED, THE PAYER OF THE INT EREST HAS NOT CHOICE EXCEPT TO DESIST FROM DEDUCTING TAX AT SOURCE FROM THE INTEREST PAID. IN THE CASE OF PUNJAB NATIONAL BANK (SUPRA), IT HAS BEEN HELD THAT NON-MENTIONING OF PAN IN FORM NO.15G AND FORM NO.15 H IS ONLY A TECHNICAL BREACH, WHEN THE PAYEES WERE HAVING PAN. FOR THE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE DECISION RENDE RED BY AMRITSAR BENCH OF TRIBUNAL IN THE CASE OF PUNJAB NATIONAL BA NK (SUPRA):- 9. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE THROUGH THE MATERIAL PLACED ON RECORD. AS REGARDS THE FIRST ISSUE OF NON DEDUCTION OF TDS ON MONTHLY ITA NO.2866/BANG/2017 PAGE 5 OF 19 AVERAGE BASIS, WE FIND THAT THE CONTENTION OF THE ASSESSEE THAT AT THE END OF FINANCIAL YEAR THERE WA S NO SHORT DEDUCTION OF TDS ON PAYMENT OF SALARY TO VARIOUS EMPLOYEES HAS NOT BEEN CONTROVERTED BY THE AUTHORITIES BELOW. FURTHER, WE FIND THAT THE TDS ON SALARY WAS DEDUCTED ON THE MONTHLY AVERAGE BASIS BY CIRCLE OFFICE OF PERSONS RESPONSIBLE AND IT WAS AUTOMATIC AND THERE IS NO INTERFERENCE BY THE BRACH . WE FURTHER FIND THAT DEDUCTION OF AMOUNT OF TAX FRO M SALARY DEPEND UPON THE VARIOUS SAVING SCHEMES ADOPTED BY VARIOUS EMPLOYEES AND SOME TIME THE EMPLOYEES MAKE DELAY IN SUBMISSIONS OF THEIR SAVING CERTIFICATES. FURTHER WE FIND FROM THE REPLY OF ASSESSEE TO LEARNED CIT(A) THAT THE EMPLOYEES HAD DECLARED THE OTHER INCOME TO THE BANK ONLY IN THE MONTH OF MARCH AND FURTHER THAT SOME TIMES INCREMENT AND PAY PERQUISITES OF EMPLOYEES IS PAID IN THE LAST MONTH AND THEREFORE, ALL THESE REASONS COULD CONTRIBUTE TO SOME SHORT DEDUCTION OF TDS IN SOME EARLIER MONTHS OF THE FINANCIAL YEAR BUT THE F ACT REMAINS THAT AT THE END OF FINANCIAL YEAR THERE WAS NO SHORT DEDUCTION OF TDS. BEFORE LEARNED CIT(A) TH E ASSESSEE HAD RELIED UPON THE CASE LAW DECIDED BY HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. MARUBENI INDIA (PVT.) LTD., IN WHICH IT WAS HELD TH AT WHEN UNDER CERTAIN CIRCUMSTANCES THERE IS SHORT DEDUCTION OF TAX THE ASSESSEE CANNOT BE HELD TO BE IN DEFAULT U/S 201(1) OF THE INCOME TAX ACT, 1961. THE ASSESSEE HAD ALSO FILED THE COPY OF THE JUDGMENT, HOWEVER, THE LEARNED CIT(A) THOUGH OBSERVED THAT ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE IN A NUMBER OF CASES, BUT HE DID NOT ADJUDICATE ON THE ISSUE HOLDING THAT ASSESSEE HAD NOT RAISED THE ISSU E BEFORE HIM. HOWEVER, WE FIND THAT THE NON DEDUCTION OF TDS ON MONTHLY AVERAGE BASIS WAS DUE TO TECHNICAL REASONS AND MOREOVER, THE ISSUE FOR NON DEDUCTION ON MONTHLY AVERAGE BASIS IS DECIDED IN FAVOUR OF ASSESSEE IN THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. MARUBENI INDIA (PVT.) LTD.. WE FIND THAT THOUGH ASSESSEE BEFORE LEARNED CIT(A) HAD NOT RAISED SPECIFICALLY THIS GROUND OF APPEAL, BUT GROUND NO.3 RAISED BEFORE ITA NO.2866/BANG/2017 PAGE 6 OF 19 LEARNED CIT(A) CLEARLY INDICATES THAT ASSESSEE WAS AGGRIEVED WITH THE TOTAL DEMAND RAISED WHICH INCLUDED AMOUNT ON ACCOUNT OF NON DEDUCTION OF TDS ON MONTHLY AVERAGE BASIS AND ASSESSEE DURING APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(A) HAD ALSO MADE ARGUMENTS FOR THE SAME, THEREFORE, LEARNED CIT(A) SHOULD NOT HAVE DISMISSED THE SAME AS NOT RAISED BY ASSESSEE, THEREFORE, WE DELETE THE DEMAND ON THIS ACCOUNT HOLDING THAT THE BREACH WAS MERELY TECHNICAL IN NATURE AND MOREOVER, THE ISSUE IS COVERED IN FAVOUR OF ASSESSEE AS NOTED BY LEARNED CIT(A). IN VIEW OF THE ABOVE, THE GROUND NO.1 IS ALLOWED. 10. AS REGARDS GROUND NO.2, WE FIND THAT ASSESSEE IN PROCEEDING U/S 201(1) AND 201(1A) HAD PROVIDED A LIST OF PERSONS TO WHOM THE INTEREST OF 10,000/- OR MORE WAS PAID AND TDS WAS NOT DEDUCTED ALONG WITH PAN NO. OF ALL DEDUCTEES. THIS IS MENTIONED BY ASSESSING OFFICER AT PAGE 4 OF HIS ORDER AND THEREFORE, THE NON MENTIONING OF TDS WAS ONLY A TECHNICAL ERROR. WE FURTHER FIND THAT THE SAME SUBMISSIONS WERE MADE BEFORE LEARNED CIT(A) AND IT WAS SUBMITTED AS UNDER: 'THERE IS NO PERSONS WHOSE PAN NO. IS NOT AVAILABLE OR IN VALID WITH THE BANK ON THE DATE OF PAYMENT OF INTEREST THERE WILL BE NO REQUIREMENT OF DEDUCTION OF TDS U/S 194A OF THE ACT. THE REQUIREMENTS OF SECTION 206AA IS ALSO FULFILLED ON THE DATE OF SUBMISSION AS THE PAN NO. OF ALL DEDUCTEES ARE AVAILABLE WITH THE BANK ON THE DATE OF SUBMISSIONS OF DECLARATION IN FORM NO. 15G/15H, ON THE DATE WHEN PAYMENT IS MADE.' IT WAS ALSO SUBMITTED TO LEARNED CIT(A) THAT THE LI ST OF PERSONS TO WHOM INTEREST OF 10,000/- OR MORE WAS PAID AND TDS WAS NOT DEDUCTED ALONG WITH PAN OF ALL DEDUCTEES WAS SUBMITTED TO ASSESSING OFFICER AND THIS FACT IS NOTED BY LEARNED CIT AT PAGE-4 OF HIS ORDER. THE FINDING OF LEARNED CIT(A) THAT AR OF THE APPELLANT HAS FAILED TO FURNISH ANY EVIDENCE IN ITA NO.2866/BANG/2017 PAGE 7 OF 19 SUPPORT OF THE CONTENTION THAT THE PAN WERE AVAILABLE WITH THE PERSONS RESPONSIBLE AT THE TIME OF ACCEPTING FORM 15G/1 51-1, IS ONLY A TECHNICAL BREACH IN VIEW OF THE FACT THAT LEARNED CIT(A) PASS ED THE ORDER DATED 26.06.2014 WHEREAS AS PER THE LIST OF PERSONS SUBMITTED TO ASSESSING OFFICER INDICATIN G THE PAN NOS., IT IS OBSERVED THAT PAN NOS. OF ASSESSEES TO WHOM INTEREST WAS PAID WITHOUT DEDUCTION OF TAX WAS ISSUED IN THE YEARS 2008-2011. THE LIST OF SUCH PAYMENTS IS PLACED AT (PB PAGE 1 T O 2). THEREFORE, THE PAN NOS. OF SUCH DEDUCTEES WAS AVAILABLE AT THE TIME OF DEDUCTION OF TDS, AND THEREFORE, THE MENTIONING OF THE SAME ON THE DECLARATIONS WAS ONLY A TECHNICAL BREACH. THE HON'BLE ITAT, VISHAKHAPATNAM BENCH IN THE CASE OF DOLT CIRCLE-3(1), (TDS) VIJAYAWADA VS. M/S VIJAYA BANK, KOTHAGUDEM UNDER SIMILAR FACTS AND CIRCUMSTANCES HAS DECIDED THE ISSUE VIDE PARA7 WHICH IS REPRODUCED BELOW. 7. WE HAVE HEARD THE SUBMISSIONS OF THE PARTIES, PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS OTHER MATERIALS ON RECORD. IT IS THE CLAIM OF THE DEPARTMENT THAT THE ASSESSEE HAS NOT BEEN ABLE TO SUBMIT DECLARATIONS IN FORM 15G IN ALL THE CASES AT THE TIME OF SURVEY. WHEREAS, THE ASSESSEE HAS ASSERTED THAT DURING THE PROCEEDING BEFORE THE ASSESSING OFFICER, DECLARATIONS OF THE DEPOSITORS IN PRESCRIBED MANNER WAS FILED IN CASES WHERE TAX HAS NOT BEEN DEDUCTED. ON A PERUSAL OF FACTS AND MATERIALS ON RECORD, IT IS CLEAR THAT EVEN ASSUMING THAT AT THE TIME OF SURVEY, ALL THE DECLARATIONS COULD NOT BE BROUGHT TO THE NOTICE OF THE DEPARTMENT FOR WHATEVER MAY BE THE REASONS, BUT FACT REMAINS THAT DURING THE PROCEEDING BEFORE THE ASSESSING OFFICER, THE ASSESSEE HAS FURNISHED DECLARATIONS IN THE PRESCRIBED FORMAT IN RESPECT OF INTEREST PAYMENT/CREDIT MADE TO DEPOSITORS WHEREIN TAX WAS NOT DEDUCTED AT SOURCE. THE ASSESSING OFFICER HAS REJECTED THE DECLARATION FORMS BY ITA NO.2866/BANG/2017 PAGE 8 OF 19 ASSUMING THAT THE ASSESSEE HAS NOT OBTAINED THOSE FORM PR/OR TO THE DATE OF PAYMENT/CREDIT OF INTEREST. IN OUR VIEW, THE REJECTION OF THE DECLARATIONS ON MERE PRESUMPTION AND SURMISES BY HE ASSESSING OFFICER IS NOT CORRECT. FACT REMAINS THAT THE ASSESSEE HAS SUBMITTED THE DECLARATION FORMS BEFORE THE ASSESSING OFFICER. THEREFORE, INSTEAD OF POINTING OUT CERTAIN DEFECTS, DEFICIENCIES/TECHNICAL OBJECTIONS, THE ASSESSING OFFICER SHOULD HAVE ACCEPTED THE DECLARATION. ONCE A DECLARATION IS RECEIVED FROM THE DEPOSITOR IN THE PRESCRIBED MANNER, THE DEDUCTOR IS UNDER A STATUTORY OBLIGATION NOT TO DEDUCT TAX. THEREFORE, THE ASSESSEE CANNOT BE PENALIZED OR SADDLED WITH LIABILITY U/S 201(1) OR 201(1A) OF THE ACT WHEN THE DEPOSITORS TO WHOM INTEREST HAS BEEN PAID/CREDITED HAVE FURNISHED DECLARATIONS IN THE PRESCRIBED MANNER REQUESTING NOT TO DEDUCT TAX. IN THESE CIRCUMSTANCES, WE AGREE WITH THE CONCLUSION OF THE LD. CIT THAT MERELY BECAUSE THERE ARE SOME TECHNICAL DEFECTS IN THE DECLARATION OR THEY HAVE BEEN RECEIVED AFTER THE DATE OF CREDIT OF INTEREST TO THE ACCOUNT OF THE PAYEE THEY CANNOT BE REJECTED. IT IS ALSO A FACT THAT THE VIEW TAKEN BY THE LD. CIT(A) IS IN CONSONANCE WITH THE DECISION OF ITAT JODHPUR BENCH IN THE CASE OF INCOME TAX OFFICER VS. PEARL ORGANIC COATING, REPORTED IN (2004) 84 TTJ (JD) 802 AND THAT OF THE HON'BLE MADRAS HIGH COURT IN CASE OF VIJAY HEMANTH FINANCE AND ESTATE LIMITED VS. /TO AND ANOTHER, REPORTED IN (1999) 238 ITR 282 (MAD). THE LD. D.R. HAS NOT BROUGHT TO OUR NOTICE ANY CONTRARY DECISION. IN AFORESAID VIEW OF THE MATTER, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN DELETING THE DEMAND RAISED BY THE ASSESSING OFFICER. ACCORDINGLY, WE UPHOLD THE ORDER OF THE CIT(A) BY DISMISSING THE GROUNDS RAISED.' ITA NO.2866/BANG/2017 PAGE 9 OF 19 RESPECTFULLY FOLLOWING THE ABOVE WE DELETE THE DEMAND CREATED BY AUTHORITIES BELOW. IN VIEW OF THE ABOVE, GROUND NO.3 IS ALSO ALLOWED. 11. IN NUTSHELL, THE APPEAL FILED BY ASSESSEE IS ALLOWED. 10. IN OUR VIEW, THE RATIO OF ABOVE SAID DECISIO N CAN BE CONVENIENTLY APPLIED IN THIS CASE ALSO. IN THE INST ANT CASE, THE ASSESSEE HAS FURNISHED A STATEMENT SHOWING THE DETA ILS OF INTEREST PAID ON TERMS DEPOSITS. A PERUSAL OF THE SAME WOUL D SHOW THAT THE ASSESSEE HAS FURNISHED PAN NUMBER OF MOST OF THE DE POSITORS. ACCORDINGLY WE ARE OF THE VIEW THAT THIS ISSUE REQU IRES RE- EXAMINATION IN THE LIGHT OF PRINCIPLES DISCUSSED AB OVE. ACCORDINGLY WE SET ASIDE THE ORDER PASSED BY LD CIT(A) AND REST ORE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO EXAMINE TH IS ISSUE AFRESH BY FOLLOWING THE DISCUSSIONS MADE SUPRA. 11. THE NEXT ISSUE RELATES TO NON-DEDUCTION OF T AX AT SOURCE FROM THE COMMISSION PAYMENT MADE TO NPCI. THE LD A.R PL ACED HIS RELIANCE ON THE DECISION RENDERED BY CO-ORDINATE BE NCH IN THE CASE OF THE ACIT VS. M/S CORPORATION BANK (ITA NO.1264 ( BANG)2013 AND 1352 (BANG) 2013 DATED 11.03.2015), WHEREIN IT WAS HELD THAT THE PAYMENT MADE TO NFS COULD NOT BE CONSIDERED AS COMMISSION OR BROKERAGE LIABLE FOR DEDUCTION AT SOURCE. FOR T HE SAKE OF CONVENIENCE, WE EXTRACT BELOW THE RELEVANT DISCUSSI ONS MADE BY THE CO-ORDINATE BENCH IN THE ABOVE SAID CASE:- 24. WE HAVE PERUSED THE ORDERS AND HEARD THE RIVAL CONTENTIONS. SECTION 194H OF THE ACT DEALS WITH COMMISSION AND BROKERAGE. AO HAS NOT SPECIFIED IN I TS ORDER AS TO UNDER WHAT HEAD HE CLASSIFIED THE PAYME NTS ITA NO.2866/BANG/2017 PAGE 10 OF 19 MADE BY THE ASSESSEE TO M/S NFS. HE SIMPLY STATED THAT THE PAYMENTS WERE IN RESPECT OF SERVICE USED B Y THE ACCOUNT HOLDERS OF THE BANK AND THEREFORE, SECT ION 194H OF THE ACT STOOD ATTRACTED. WHETHER SECTION 19 4H OF THE ACT WAS ATTRACTED ON BANKING SERVICES PROVID ED BY BANK TO ITS CLIENTS WAS AN ISSUE HAD CAME UP BEF ORE THE HONLE DELHI HIGH COURT IN THE CASE OF JDS APPA RELS PVT.LTD (SUPRA) THEIR LORDSHIPS HELD AS UNDER; 6. SECTION 194H OF THE ACT READS AS UNDER:- 'COMMISSION OR BROKERAGE. 194H. ANY PERSON, NOT BEING AN INDIVIDUAL OR A HIND U UNDIVIDED FAMILY, WHO IS RESPONSIBLE FOR PAYING, ON OR AFTER THE 1ST DAY OF JUNE, 2001, TO A RESIDENT, ANY INCOM E BY WAY OF COMMISSION (NOT BEING INSURANCE COMMISSION REFERRED TO IN SECTION 194D) OR BROKERAGE, SHALL, AT THE TIME OF C REDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE T IME OF PAYMENT OF SUCH INCOME IN CASH OR BY THE ISSUE OF A CHEQUE OR DRAFT OR BY ANY OTHER MODE, WHICHEVER IS EARLIER, D EDUCT INCOME-TAX THEREON AT THE RATE OF TEN PER CENT : PROVIDED THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION IN A CASE WHERE THE AMOUNT OF SUCH INCOME O R, AS THE CASE MAY BE, THE AGGREGATE OF THE AMOUNTS OF SUCH I NCOME CREDITED OR PAID OR LIKELY TO BE CREDITED OR PAID D URING THE FINANCIAL YEAR TO THE ACCOUNT OF, OR TO, THE PAYEE, DOES NOT EXCEED FIVE THOUSAND RUPEES : PROVIDED FURTHER THAT AN INDIVIDUAL OR A HINDU UNDI VIDED FAMILY, WHOSE TOTAL SALES, GROSS RECEIPTS OR TURNOV ER FROM THE BUSINESS OR PROFESSION CARRIED ON BY HIM EXCEED THE MONETARY LIMITS SPECIFIED UNDER CLAUSE (A) OR CLAUS E (B) OF SECTION 44AB DURING THE FINANCIAL YEAR IMMEDIATELY PRECEDING THE FINANCIAL YEAR IN WHICH SUCH COMMISSION OR BROKERAGE IS CREDITED OR PAID, SHALL BE LIABLE TO D EDUCT INCOME-TAX UNDER THIS SECTION: PROVIDED ALSO THAT NO DEDUCTION SHALL BE MADE UNDER THIS SECTION ON ANY COMMISSION OR BROKERAGE PAYABLE BY B HARAT SANCHAR NIGAM LIMITED OR MAHANAGAR TELEPHONE NIGAM LIMITED TO THEIR PUBLIC CALL OFFICE FRANCHISEES. ITA NO.2866/BANG/2017 PAGE 11 OF 19 EXPLANATION.--FOR THE PURPOSES OF THIS SECTION,-- (I) 'COMMISSION OR BROKERAGE' INCLUDES ANY PAYMENT RECEIVED OR RECEIVABLE, DIRECTLY OR INDIREC TLY, BY A PERSON ACTING ON BEHALF OF ANOTHER PERSON FOR SERVI CES RENDERED (NOT BEING PROFESSIONAL SERVICES) OR FOR A NY SERVICES IN THE COURSE OF BUYING OR SELLING OF GOODS OR IN R ELATION TO ANY TRANSACTION RELATING TO ANY ASSET, VALUABLE ART ICLE OR THING, NOT BEING SECURITIES; ( ) THE EXPRESSION 'PROFESSIONAL SERVICES' MEANS SERVICES RENDERED BY A PERSON IN THE COURSE OF CARR YING ON A LEGAL, MEDICAL, ENGINEERING OR ARCHITECTURAL PROFES SION OR THE PROFESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR SUCH OTHER PROFESSION AS IS NOTIFIED BY THE BOARD FOR THE PURPOSES OF SECTION 44AA; (II) THE EXPRESSION 'SECURITIES' SHALL HAVE THE MEANING ASSIGNED TO IT IN CLAUSE (H) OF SECTION 2 O F THE SECURITIES CONTRACTS (REGULATION) ACT, 1956 (42 OF 1956) ; (III) WHERE ANY INCOME IS CREDITED TO ANY ACCOUNT, WHETHER CALLED 'SUSPENSE ACCOUNT' OR BY ANY OTHER N AME, IN THE BOOKS OF ACCOUNT OF THE PERSON LIABLE TO PAY SU CH INCOME, SUCH CREDITING SHALL BE DEEMED TO BE CREDIT OF SUCH INCOME TO THE ACCOUNT OF THE PAYEE AND THE PROVISIO NS OF THIS SECTION SHALL APPLY ACCORDINGLY.' 7. SECTION 194H OF THE ACT APPLIES TO INCOME BY WAY OF COMMISSION OR BROKERAGE EXCLUDING INSURANCE COMMISSION REFERRED TO IN SECTION 194D OF THE ACT. TAX AT SOURCE IS TO BE DEDUCTED AT THE TIME OF CREDIT OF S UCH INCOME TO THE ACCOUNT OF THE PAYEE OR AT THE TIME OF PAYME NT OF SUCH INCOME IN CASH OR BY WAY OF CHEQUE/DRAFT OR ANY OTH ER MODE. THE EXPLANATION CLAUSE (I) STATES THAT FOR THE PURPOSE OF THIS SECTION, CO MMISSION OR BROKERAGE INCLUDES ANY PAYMENT RECEIVED OR RECEI VABLE DIRECTLY OR INDIRECTLY BY A PERSON ACTING ON BEHALF OF ANOTHER PERSON, (I) FOR SERVICES RENDERED, NOT BEING IN THE NATURE OF PROFESSIONAL SERVICES; (II) ANY SERVICE RENDERED IN THE COURSE ITA NO.2866/BANG/2017 PAGE 12 OF 19 OF BUYING OR SELLING OF GOODS; AND, (III) IN RELATI ON TO ANY TRANSACTION RELATING TO ANY ASSET, VALUABLE ARTICLE OR THING, NOT BEING SECURITIES. THE EXPRESSION SECURITIES HAS BEEN DEFINED CLAUSE (III) TO THE EXPLANATION. 8. THE HIGH COURT OF GUJARAT IN AHMEDABAD STAMP VENDORS ASSOCIATION VERSUS UNION OF INDIA [2002] 25 7 ITR 202 EXAMINED CLAUSE (I) OF THE EXPLANATION AND WHETHER IT WOULD BE APPLICABLE TO PERSONS CARRYING ON THE BUSINESS OF S TAMP VENDORS WHO PURCHASE STAMPS FROM THE GOVERNMENT TRE ASURY AND SELL THEM TO THE PUBLIC. THE GUJARAT HIGH COURT DREW A DISTINCTION BETWEEN A CONTRACT OF SALE AND A CONTRA CT OF AGENCY BY WHICH AN AGENT IS AUTHORIZED TO BUY OR SE LL ON BEHALF OF THE PRINCIPAL. IN A CASE OF AGENCY, THE A GENT IS NOT THE OWNER OF THE PROPERTY AND DOES NOT SELL THE SAM E OF HIS OWN ACCORD BUT AS PER THE DIRECTIONS AND INSTRUCTIO NS OF THE PRINCIPAL, WHO IS THE OWNER OF THE PROPERTY. THE PR OFIT AND LOSS IS THAT OF THE PRINCIPAL, AND WHAT IS PAID TO THE AGENT IS THE COMMISSION OR BROKERAGE. THE EXPRESSIONS 'COMMISSION' AND 'DISCOUNT' WERE DISTINGUISHED AFTE R MAKING REFERENCE TO THE DEFINITIONS IN THE BLACKS LAW DICTIONARY. THE EXPRESSION 'DISCOUNT', IT WAS OBSER VED, IS AN ALLOWANCE OR DEDUCTION MADE FROM THE GROSS SALE ON ANY ACCOUNT WHATSOEVER. A 'DEDUCTION' NORMALLY REPRESENTS A REDUCTION IN THE ORIGINAL PRICE OR A D EBT SUCH AS IN CASE OF SECURITIES (E.G. TREASURY BILLS), WHI CH ARE ISSUED BELOW THE FACE VALUE AND ARE REDEEMED AT THE FACE VALUE. COMMISSION, IT WAS HELD, IS A REWARD PAID TO AN AGENT AS WELL AS TO A SALESMAN, EXECUTOR, TRUSTEE, BROKER OR BAILEE AND IS CALCULATED AS A PERCENTAGE OF THE AMO UNT OF THE TRANSACTION OR ON THE PROFIT OF THE PRINCIPAL. IT IS A FEE PAID TO AN AGENT OR AN EMPLOYEE FOR GENERATING A PI ECE OF BUSINESS OR PERFORMING A SERVICE. IN SUCH CASES, NO RMALLY, THERE EXISTS A FIDUCIARY DUTY, WHICH HAS TO BE DISC HARGED BY THE PERSON TO WHOM COMMISSION IS PAID. THE FOLLOWIN G EXCERPT FROM THE DECISION OF THE BOMBAY HIGH IN HAR IHAR COTTON PROCESSING FACTORY VERSUS CIT, (1960) 391 IT R 594 (BOM.) WAS REFERRED TO WITH APPROVAL:- ITA NO.2866/BANG/2017 PAGE 13 OF 19 'THE EXPRESSION 'COMMISSION' HAS NO TECHNICAL MEANING BUT BOTH IN LEGAL AND COMMERCIAL ACCEPTATIO N OF THE TERM IT HAS DEFINITE SIGNIFICATION AND IS UNDERSTOO D AS AN ALLOWANCE FOR SERVICE OR LABOUR IN DISCHARGING CERT AIN DUTIES SUCH AS FOR INSTANCE OF AN AGENT, FACTOR, BROKER OR ANY OTHER PERSON WHO MANAGES THE AFFAIRS OR UNDERTAKES TO DO SOME WORK OR RENDERS SOME SERVICE TO ANOTHER. MOSTLY IT IS A PERCENTAGE ON PRICE OR VALUE OF UPON THE AMOUNT OF MONEY INVOLVED IN A TRANSACTION. IT CAN BE FOR A VARIETY OF SERVICES AND IS OF THE NATURE OF RECOMPENSE OR REWARD FOR SU CH SERVICES. 'REBATE', ON THE OTHER HAND, IS A REMISSI ON OR A PAYMENT BACK AND OF THE NATURE OF A DEDUCTION FROM THE GROSS AMOUNT. IT IS SOMETIMES SPOKEN OF AS A DISCOU NT OR A DRAW-BACK. THE DICTIONARY MEANING OF THE TERM INCLU DES A REFUND TO THE PURCHASER OF A THING OR COMMODITY OF A PORTION OF THE PRICE PAID BY HIM. IT IS NOT CONFINED TO A T RANSACTION OF SALE AND INCLUDES ANY DEDUCTION OR DISCOUNT FROM A STIPULATED PAYMENT, CHARGE OR RATE. IT NEED NOT NEC ESSARILY BE TAKEN OUT IN ADVANCE OF PAYMENT BUT MAY BE HANDE D BACK TO THE PAYER AFTER HE HAS PAID THE STIPULATED SUM. THE REPAYMENT NEED NOT BE IMMEDIATE. IT CAN BE MADE LAT ER AND IN CASE OF PERSONS WHO HAVE CONTINUOUS DEALINGS WIT H ONE ANOTHER IT IS NOTHING UNUSUAL TO DO SO.' IMPORTANTLY, THE GUJARAT HIGH COURT HELD THAT THERE SHOULD BE AN ELEMENT OF AGENCY IN ALL THE THREE SIT UATIONS AS ENVISAGED IN CLAUSE (I) OF THE EXPLANATION TO SECTI ON 194H OF THE ACT. 9. ON APPEAL BEFORE THE SUPREME COURT, THE DECISION WAS UPHELD BY A SHORT ORDER, WHICH IS REPO RTED AS (2012) 348 ITR 378 (SC), OBSERVING THAT THE STAMP V ENDORS HAD PURCHASED STAMPS IN BULK AND HAD RECEIVED A CAS H DISCOUNT. THE SUPREME COURT CONCURRED WITH THE JUDG MENT OF THE HIGH COURT THAT THE TRANSACTION WAS OF SALE AND SECTION 194H OF THE ACT HAD NO APPLICATION. THUS, HOLDING T HAT A CONTRACT OF AGENCY DID NOT EXIST. 9. SIMILAR VIEW HAS BEEN EXPRESSED BY THE KERALA HIGH COURT IN KERALA STATE STAMP VENDORS ASSOCIATIO N VERSUS OFFICE OF THE ACCOUNTANT GENERAL AND OTHERS (2006) 282 ITR 7 (KERALA), WHEREIN IT HELD:- ITA NO.2866/BANG/2017 PAGE 14 OF 19 'NO DOUBT, PAYMENT OF COMMISSION OR BROKERAGE IN RELATION TO SALE OR PURCHASE OF GOODS ALSO WOULD AT TRACT DEDUCTION OF TAX AT SOURCE UNDER SECTION 194H OF TH E ACT. HOWEVER, SUCH SITUATION ARISES ONLY WHEN THERE IS INVOLVEMENT OF SERVICES OF A THIRD PARTY ON PAYMENT OTHER THAN THE SELLER AND THE PURCHASER OF GOODS OR WHEN THE RECIPIENT OF THE BENEFIT MARKETS GOODS AS 'AGENT' O F THE OWNER AND NOT AS INDEPENDENT DEALER.' 11. ALLAHABAD HIGH COURT IN CHIEF TREASURY OFFICER VERSUS UNION OF INDIA (2013) 355 ITR 484 HAS HELD T HAT THE WORDS 'BY A PERSON ACTING ON BEHALF OF ANOTHER PERS ON' IMPLY ELEMENT OF AGENCY AND MUST BE PRESENT IN ALL SUCH SERVICES OR TRANSACTIONS IN ORDER TO FALL WITHIN TH E EXPRESSION 'COMMISSION' AND 'BROKERAGE'. REFERENCE WAS MADE TO DEFINITION OF THE TERM 'AGENT' IN THE INDIAN CONTRA CT ACT AND THE IMPLICATION THEREOF AND IT WAS OBSERVED THAT TH E CONTRACT BETWEEN A PRINCIPAL AND AN AGENT PRIMARILY IS A CON TRACT OF EMPLOYMENT TO BRING ABOUT A LEGAL RELATIONSHIP WITH A THIRD PARTY AND THE AGENT EITHER ACTUALLY OR BY LAW IS HE LD TO BE AUTHORIZED OR EMPLOYED BY THE FIRST I.E. THE PRINCI PAL, WHOM HE REPRESENTS. REPRESENTATIVE CHARACTER AND DERIVAT IVE AUTHORITY ARE DISTINGUISHING FEATURES OF AN AGENT. IT WAS ACCORDINGLY HELD THAT PROVISIONS OF SECTIONS 194H O F THE ACT WERE NOT ATTRACTED IN THE CASE OF STAMP VENDORS. 12. THE EXPRESSIONS 'COMMISSION' OR 'BROKERAGE' ARE WORDS OF GENERAL AND COMMON PARLANCE USED BOTH COMMERCIALLY AND BY THE COMMON MAN ON THE STREET. C LAUSE (I) EXPRESSLY SEEKS TO DEFINE THE EXPRESSION 'COMMI SSION' OR 'BROKERAGE' BUT STATES THAT IT WILL INCLUDE PAYMENT S RECEIVED OR RECEIVABLE, DIRECTLY OR INDIRECTLY BY A PERSON A CTING ON BEHALF OF ANOTHER IF THEY FALL IN THE THREE CATEGOR IES. A DEFINITION MAY BE EXHAUSTIVE OR RESTRICTIVE OF ITS COMMON MEANING OR MAY BE AN EXTENSIVE ONE. INDEED, THERE A RE DECISIONS WHICH OBSERVE THAT USE OF THE WORD 'INCLU DES' IN THE CLAUSE CAN SHOW LEGISLATIVE INTENT TO ENLARGE T HE MEANING OF THE WORDS OR PHRASES OCCURRING SO AS TO NOT ONLY MEAN AND COMPREHEND SUCH THINGS AS THEY SIGNIFY ACCORDIN G TO ITA NO.2866/BANG/2017 PAGE 15 OF 19 THEIR NATURE AND IMPORT, BUT ALSO THINGS WHICH THE INTERPRETATION CLAUSE DECLARES THAT THEY SHALL INCL UDE. (SEE CIT VERSUS TAJ MAHAL HOTEL, (1971) 3 SCC 550). BUT, THIS MAY NOT ALWAYS BE THE CASE AND IN CERTAIN CASES, TH E EXPRESSION 'INCLUDES' HAS BEEN CONSTRUED AS 'EQUIVA LENT TO' AND, THEREFORE, GIVEN A NARROWER MEANING (SEE SOUTH GUJARAT ROOFING TILES MANUFACTURERS ASSOCIATION VER SUS STATE OF GUJARAT AND OTHERS AIR 1977 SC 90). THUS, THE WORD 'INCLUDES' CAN BE USED IN THE SENSE OF THE WOR D 'MEANS'. THE DEFINITION CLAUSE IN SUCH CASES IS TRE ATED AS AN EXHAUSTIVE ONE (SEE RESERVE BANK OF INDIA VERSUS PE ERLESS GENERAL FINANCE AND INVESTMENT COMPANY LTD. (1987) 1 SCC 424). THUS, IN A PARTICULAR CONTEXT THE WORD 'I NCLUDES' WHEN USED, MAY ONLY MEAN 'COMPRISE OF' OR 'CONSIST OF'. 13. IT IS APPARENT FROM THE DECISION OF THE SUPREME COURT IN THE CASE OF AHMEDABAD STAMP VENDORS ASSOCI ATION (SUPRA) THAT CLAUSE (I) OF THE EXPLANATION TO SECTI ON 194H OF THE ACT HAS BEEN READ AS EXHAUSTIVE AND NOT AS EXPA NSIVE. THIS IS THE REASON WHY THE SUPREME COURT IN THE SHO RT ORDER DREW DISTINCTION BETWEEN A TRANSACTION OF SALE AND A CONTRACT OF AGENCY AND ALSO BETWEEN DISCOUNT AND COMMISSION/BROKERAGE. OTHERWISE, THE EXPRESSION 'AN Y SERVICE RENDERED IN THE COURSE OF BUYING OR SELLING OF GOODS' POSSIBLY WOULD HAVE ENCOMPASSED AND INCLUDED THE 'DISCOUNT' GIVEN TO THE STAMP VENDORS, WHO RENDER S ERVICE DURING THE COURSE OF BUYING AND SELLING OF GOODS, I .E. THE STAMP PAPERS. 14.CONTENTION COULD BE RAISED THAT PAYMENT RECEIVED OR RECEIVABLE DIRECTLY FOR INDIRECTLY FOR ANY SERVICES IN COURSE OF BUYING OR SELLING OF GOODS NEED NOT ARISE OUT OF A CONTRACT OF AGENCY OR FROM A RELATIONSHIP OF A PRINCIPAL AND AN AGENT. THE SAID CONTENTION HAS TO BE REJECTED IN VIEW OF T HE AFORESAID JUDGMENTS, WHICH POSITIVELY HOLD THAT THE THREE SEPARATE CONDITIONS WHEN TAX AT SOURCE IS REQUIRED TO BE DEDUCTED WOULD ONLY APPLY PROVIDED THE RECIPIENT IS ACTING ON BEHALF OF ANOTHER, I.E. RELATIONSHIP OF A PRINCI PAL AND AN AGENT EXISTS AND NOT OTHERWISE. THIS INTERPRETATION HAS BEEN ITA NO.2866/BANG/2017 PAGE 16 OF 19 CONSISTENT AND UNIFORMLY APPLIED WHILE INTERPRETING CLAUSE (I) OF THE EXPLANATION TO SECTION 194H OF THE ACT. APPROPRIATE IN THIS REGARD WOULD BE TO REFER TO THE DECISION OF THE HIGH COURT OF DELHI IN COMMISSIONER OF INCOM E TAX VERSUS IDEA CELLULAR LIMITED, (2010) 325 ITR 148 (D ELHI) WHEREIN EXPLANATION CLAUSE (I) TO SECTION 194H OF T HE ACT HAD COME UP FOR CONSIDERATION AND ON INTERPRETATION IT WAS HELD THAT IT WOULD APPLY ONLY IF PAYMENT WAS RECEIV ED OR RECEIVABLE DIRECTLY OR INDIRECTLY BY A PERSON ACTIN G ON BEHALF OF ANOTHER PERSON FOR (I) SERVICES RENDERED (NOT BEING PROFESSIONAL) AND (II) FOR ANY SERVICES IN TH E COURSE OF BUYING OR SELLING OF GOODS OR IN RELATION TO ANY TR ANSACTION RELATING TO AN ASSET, VALUABLE ARTICLE OR THING. TH E JUDGMENT RECORDS THAT THE COUNSEL FOR BOTH THE PARTIES, I.E. THE REVENUE AND THE ASSESSEE, HAD AGREED THAT THE ELEME NT OF AGENCY WAS TO BE ESTABLISHED IN ALL THE AFORESAID CIRCUMSTANCES (SEE PAGE 156 PLACITUM 9 OF THE ITR CITATION). THUS, THIS CONTENTION IF RAISED WOULD NO T STAND JUDICIAL SCRUTINY ON THE PRINCIPLES OF CONSISTENCY AND CERTAINTY. EVEN OTHERWISE, THE VIEW EXPOUNDED AND A CCEPTED IS PLAUSIBLE, BESIDES BEING REASONABLE. 15. APPLYING THE ABOVE CITED CASE LAW TO THE FACTUA L MATRIX OF THE PRESENT CASE, WE FEEL THAT SECTION 194H OF THE ACT WOULD NOT BE ATTRACTED. HDFC WAS NOT ACTING AS AN AGENT O F THE RESPONDENT-ASSESSEE. ONCE THE PAYMENT WAS MADE BY H DFC, IT WAS RECEIVED AND CREDITED TO THE ACCOUNT OF THE RESPONDENT- ASSESSEE. IN THE PROCESS, A SMALL FEE WAS DEDUCTED BY THE ACQUIRING BANK, I.E. THE BANK WHOSE SWIPING MACHINE WAS USED. ON SWIPING THE CREDIT CARD ON THE SWIPING MAC HINE, THE CUSTOMER WHOSE CREDIT CARD WAS USED, GOT ACCESS TO THE INTERNET GATEWAY OF THE ACQUIRING BANK RESULTING IN THE REALISATION OF PAYMENT. SUBSEQUENTLY, THE ACQUIRING BANK REALISED AND RECOVERED THE PAYMENT FROM THE BANK WH ICH HAD ISSUED THE CREDIT CARD. HDFC HAD NOT UNDERTAKEN ANY ACT ON 'BEHALF' OF THE RESPONDENT-ASSESSEE. THE RELATIONSH IP BETWEEN HDFC AND THE RESPONDENT-ASSESSEE WAS NOT OF AN AGENCY BUT THAT OF TWO INDEPENDENT PARTIES ON PRINC IPAL TO PRINCIPAL BASIS. HDFC WAS ALSO ACTING AND EQUALLY PROTECTING THE INTEREST OF THE CUSTOMER WHOSE CREDI T CARD WAS USED IN THE SWIPING MACHINES. IT IS NOTICEABLE THAT THE BANK IN ITA NO.2866/BANG/2017 PAGE 17 OF 19 QUESTION OR THEIR EMPLOYEES WERE NOT PRESENT AT THE SPOT AND WERE NOT ASSOCIATED WITH BUYING OR SELLING OF GOODS AS SUCH. UPON SWIPING THE CARD, THE BANK MADE PAYMENT OF THE BILL AMOUNT TO THE RESPONDENT- ASSESSEE. THUS, THE RESPO NDENT ASSESSEE RECEIVED THE SALE CONSIDERATION. IN TURN, THE BANK IN QUESTION HAD TO COLLECT THE AMOUNT FROM THE BANKERS OF THE CREDIT CARD HOLDER. THE BANK HAD TAKEN THE RISK AND ALSO REMAINED OUT OF POCKET FOR SOMETIME AS THERE WOULD BE A TIME GAP BETWEEN THE DATE OF PAYMENT AND RECOVERY OF THE AMOUNT PAID. WE ARE OF THE OPINION, THAT THE PAYMENTS MADE BY TH E ASSESSEE TO M/S NFS COULD NOT BE CONSIDERED AS COMMISSION OR BROKERAGE, IN ANY SENSE ALL THESE TER MS. ASSESSEE WAS THEREFORE,NOT BOUND TO DEDUCT TAX ON SUCH PAYMENTS U/S 194H OF THE ACT. DISALLOWANCE U/S 40A(IA) OF THE ACT IS NOT WARRANTED. SUCH DISALLOWA NCE STANDS DELETED. GROUND NO.4 OF THE ASSESSEE IS ALLOWED. CONSISTENT WITH THE VIEW TAKEN IN THE ABOVE CITED C ASE, WE HOLD THAT THE ASSESSEE IS NOT LIABLE TO DEDUCT TAX AT SOURCE FROM THE PAYMENTS MADE NCPI TOWARDS NFS CHARGES. ACCORDINGLY, WE SET ASIDE THE ORDER PASSED BY LD CIT(A) ON THIS ISSUE AND DELETE THE DEMAND RAISED ON THIS PAYMENT. 12. THE ASSESSEE DID NOT ADVANCE ARGUMENTS IN R ESPECT OF THE DEMAND RAISED IN RESPECT OF PAYMENT MADE TOWARDS AT M CHARGES. ACCORDINGLY, WE CONFIRM THE ORDER PASSED BY LD CIT( A) ON THIS ISSUE. ITA NO.2866/BANG/2017 PAGE 18 OF 19 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST OCTOBER, 2019. SD/ - (BEENA PILLAI) JUDICIAL MEMBER SD/ - (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 1 ST OCTOBER, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE. ITA NO.2866/BANG/2017 PAGE 19 OF 19 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. DICTATION NOTE ENCLOSED . 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER .
