InterGlobe Aviation Ltd., New Delhi V. ACIT, New Delhi

ITA 5347/DEL/2012

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 9552 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 19-06-2017
• Assessment Year: misc
• Appeal Filed On: 18-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA M BISWAS
• Keywords: Additional evidence; Non-deduction of tax; TDS; Set aside
• Section: 194C; 201(1); 250; 201; 207; 194J; 194 I; 194A; 13

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH C : NEW DELHI BEFORE SHRI BHAVNESH SAINI , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.5347/DEL/2012 (ASSESSMENT YEAR: 2010 - 11 ) ITA NO.4449/DEL/2013 (ASSESSMENT YEAR: 2011 - 12 ) INTER GLOBE AVIATION LTD, 124, GROUND FLOOR, CENTRAL WING, THAPAR HOUSE, JANPATH, NEW DELHI PAN: AABCI2726B VS. ACIT, CIRCLE - 50(1), NEW DELHI (APPELLANT) (RESPONDENT) ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 AND 2011 - 12 ) ACIT, CIRCLE - 50(1), NEW DELHI VS. INTER GLOBE AVIATION LTD, 124, GROUND FLOOR, CENTRAL WING, THAPAR HOUSE, JANPATH, NEW DELHI PAN: AABCI2726B (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI ROHIT JAIN, ADV MS. TEJASVI JAIN, CA MS. SOMYA JAIN, CA REVENUE BY: MS. PARAMITA M. BISWAS, CIT DR DATE OF HEARING 09/10 / 201 9 DATE OF PRONOUNCEMENT 07 / 01 / 20 20 O R D E R PER PRASHANT MAHARISHI, A. M. 1 . ITA NO. 5347/DEL/2012 IS FILED BY THE ASSESSEE AND ITA NO. 223/ D EL/2012 BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE - 50(1), NEW DELHI [ THE LD AO ] FOR AY 2010 - 11 AGAINST THE ORDER OF THE LD CIT(A), XXX, NEW DELHI [ THE LD CIT (A)] DATED 29.08.2012 WHEREIN, THE ORDER PASSED BY THE LD ACIT, CIRCLE - 5 0(1), NEW DELHI DATED 23.03.2012 U/S 201(1) AND U/S 201(1A) OF THE INCOME TAX ACT, 1961 [ THE ACT] WAS PARTLY UPHELD. INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 2 2 . WE FIRST COME TO THE APPEAL OF THE ASSESSEE IN ITA NO. 5347/DEL/2012 WHEREIN, FOLLOWING GROUND OF APPEAL WERE RAISED: - 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE ORDER PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS) - XXX, NEW DELHI (ID. CIT(A)) DATED AUGUST 29, 2012 UNDER SECTION 250 OF THE INCOME - TAX ACT (THE ACT) IS ERRONEOUS AND BAD IN LAW TO THE EXTENT IT CONFIRM THE ORDER DATED MARCH 23, 2012 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE 50(1), NEW DELHI (ID. AO) OF HOLDING THE APPELLANT AS ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT, FOR THE ALLEGED FAILURE TO DEDUCT TAX AT SOURCE UNDER THE ACT AND LEVYING INTEREST U/S 201(1 A) OF THE ACT. DEDUCTION OF TAX AT SOURCE ON THE PASSENGER SERVICES FEES (PSF) 2. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THE APPELLANT AS AN ASSESSEE IN DEFAULT UNDER SECTION 201(1) OF THE ACT, FOR THE ALLEGED FAILURE TO DEDUCT TAX AT SOURCE U/S 194C OF THE ACT FROM THE PSF - SECURITY COMPONENT, PAID TO VARIOUS AIRPORT OPERATORS/LICE NSOR , NOT APP R ECIATING THAT THE SAID PAYMENT DID NOT FALL WITHIN AMBIT OF THAT SECTION. V 2.1 THAT WITHOUT PREJUDICE, THE CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT THE AMOUNT OF PSF - SECURITY, CONSTITUTES PAYMENT TO GOVERNMENT AND IS NOT SUBJECT TO TDS HAVING REGARD TO THE PROVISION OF SECTION 196 OF THE ACT. 2.2 THAT THE CIT (A) ERRED ON FACTS AND IN LAW IN HOLDING THE APPELLANT TO BE 'ASSESSEE IN DEFAULT U/S 201(1) FOR THE ALLEGED FAILURE TO DEDUCT TAX AT SOURCE UNDER SECTION 194C OF THE ACT FROM THE AMOUNT OF PSF - FACILITATION. 2.3 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT APPRECIATING THAT S ECTION 194C OF THE ACT HAD NO APPLICATION IN RELATION TO THE PAYMENT FOR VARIOUS FACILITIES PROVIDED BY THE AIRPORT OPERATOR / LICENSORS AT THE AIRPORT TO THE PASSENGERS. 2.4 THAT WITHOUT PREJUDICE, THE CIT(A) ERRED ON FACTS AND IN NOT APPRECIATING THAT T HE APPELLANT BEING ONLY A FACILITATOR AS REGARDS COLLECTION AND PAYMENT OF PSF AMOUNT, WAS NOT REQUIRED TO WITHHOLD TAX THEREFROM AND THE LIABILITY TO DEDUCT TAX AT SOURCE, IF ANY, WAS THAT OF THE PASSENGERS. 2.5 WITHOUT PREJUDICE, THE CIT (A) ERRED ON FA CTS AND IN LAW IN HOLDING THE APPELLANT TO BE ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT, WITHOUT MAKING ANY ENQUIRIES AS TO WHETHER OR NOT THE RESPECTIVE AIRPORT OPERATORS/LICENSORS HAVE INCLUDED THE AMOUNT OF PSF AS THEIR TAXABLE INCOME FOR THE SUBJECT YEAR AND PAID TAX THEREON. 2.6 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY OF INTEREST U/S 201 (1 A) OF THE ACT FOR THE ALLEGED FAILURE TO DEDUCT TAX AT SOURCE ON THE RESPECTIVE PSF PAYMENTS DEDUCTION OF TAX AT SOURCE ON PROVISIONS INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 3 3. T HAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE ORDER OF THE AO HOLDING THE APPELLANT TO BE AN ASSESSEE IN DEFAULT U/S 201(1) OF THE ACT FOR THE ALLEGED FAILURE TO DEDUCT TAX AT SOURCE U/S 194J OF THE ACT IN RESPECT OF THE PROVISIONS MADE BY THE APPELLANT AT THE END OF THE RELEVANT PREVIOUS YEAR WHICH REMAIN TO BE UTILIZED / REVERSED AS ON THE DATE OF THE ORDER OF THE CIT(A). 3.1 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN HOLDING THAT THE PROVISIONS REMAINING TO BE REVERSED IN THE APPELLANT S BOOKS WERE SUBJECT TO TAX DEDUCTION AT SOURCE U/S 194J OF THE ACT, NOT APPRECIATING THAT NONE OF THE EXPENSES, FOR WHICH PROVISIONS WERE CREATED, WERE IN THE NATURE OF FEES FOR TECHNICAL SERVICES. 3.2 THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN NOT A PPRECIATING THAT PROVISIONS CREATED ON ACCRUAL BASIS OF ACCOUNTING DID NOT WARRANT DEDUCTION OF TAX AT SOURCE SINCE THE PARTY TO WHOM THE PAYMENTS WERE MADE AND THE EXACT SUMS WERE NOT IDENTIFIABLE/QUANTIFIABLE AT THE TIME OF MAKING THE PROVISION. 3.3 THA T THE CIT(A) ERRED ON FACTS AND IN LAW IN LEVYING INTEREST UNDER SECTION 201(1 A) OF THE ACT FOR THE ALLEGED FAILURE OF THE APPELLANT TO DEDUCT TAX AT SOURCE IN RESPECT OF THE AFORESAID PROVISIONS. PERIOD OF LEVY OF INTEREST U/S 201(1 A) OF THE ACT 4. THAT THE CIT(A) ERRED ON FACTS AND IN LAW IN CONFIRMING THE INTEREST LEVIED BY THE ASSESSING OFFICER U/S 201(1 A) OF THE ACT, FOR THE PERIOD BEGINNING FROM THE MONTH IN WHICH TAX WAS DEDUCTIBLE UPTO THE END OF THE MONTH IN WHICH THE RETURN WAS DUE TO BE FILED BY THE DEDUCTEES, WITHOUT APPRECIATING THAT INTEREST UNDER THAT SECTION, IF LEVIABLE, WAS REQUIRED TO BE COMPUTED ONLY TILL THE END OF THE RELEVANT PREVIOUS YEAR. 3 . REVENUE HAS PREFERRED APPEAL AND HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1) HOLDING THAT THE PAYMENT OF PSF (PASSENGER SERVICE FEE) MADE TO AIRPORT OPERATORS ARE COVERED U/S 194C AND NOT U/S 194J. AS PER SECTION 194J, THE NATURE OF PAYMENT ON ACCOUNT OF PSF MADE TO AIRPORT OPERATORS BY THE AIRLINE COMPANIES IS TECHNICAL AND, THEREFORE, QU ALIFIES FOR TAX DEDUCTION U/S 194J CONSIDERING THE TWO COMPONENT THEREOF; SECURITY COMPONENT AND (B) FACILITATION COMPONENT. 2) ADMITTING THE ADDITIONAL EVIDENCE IN THE FORM OF CERTIFICATES ISSUED BY VARIOUS AIRPORT OPERATORS TO THE EFFECT THAT THE PSF RE CEIVED FROM THE ASSESSEE HAS BEEN INCLUDED IN THEIR INCOME WHILE FILLING INCOME - TAX RETURN FOR RELEVANT ASSESSMENT YEAR, WHICH IS IN VIOLATION TO THE CONDITION LAID DOWN IN RULE 46A(1). 3) HOLDING THAT LIABILITY TO DEDUCT TAX ON THE PAYMENT WITH REGARD TO CREDIT CARD GATEWAY FACILITY FEE WAS THAT OF THE BANK AND NOT THE APPELLANT. THE LD CIT(A) HAS IGNORED THE PRINCIPAL - AGENT RELATIONSHIP BETWEEN THE ASSESSEE AND THE BANK, WHICH IS THE PRINCIPLE CRITERIA FOR THE APPLICABILITY OF SECTION 194H OF THE IT ACT. INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 4 4) HOLDING THAT THE TAX CAN ONLY BE CHARGED OVER THE UNUTILIZED AMOUNT OF PROVISION, WHICH IS NOT CORRECT AS THE LIABILITY OF ASSESSEE STARTS AS AND WHEN THE PROVISIONS WERE MADE AND THE INTEREST FROM THE DATE OF PROVISION TO THE DATE OF DEDUCTION IS CHA RGEABLE. 4 . GROUND NO . 1 OF THE APPEAL IS GENERAL IN NATURE AND THEREFORE SAME IS DISMISSED. 5 . GROUND NO . 2 IS WITH RESPECT TO TAX DEDUCTION AT SOURCE ON THE PASSENGERS SERVICES FEES. THE FACTS SHOWS THAT THE ASSESSEE IS A PUBLIC LIMITED COMPANY ENGAGED IN THE BUSINESS OF RUNNING A PASSENGER AIRLINE UNDER THE NAME AND STYLE INDIGO. 6 . IT FILED ITS QUARTERLY RETURN OF TAX DEDUCTION AT SOURCE FOR FY 2009 - 10 PERTAINING TO A Y 2010 - 11. IT COLLECTS PASSENGER FEES SERVICES FROM THE PASSENGERS IN THE TICKET. THIS SUM IS PAID TO AIRPORT OWNER/ OPERATOR. PASSENGER SERVICE FEE HAS TWO DIFFERENT COMPONENTS OF SECURITY AND FACILITATION. SECURITY COMPONENT IS UTILIZED FOR EXPENDITU RE IN RESPECT OF AVIATION SECURITY FORCE DEPLOYED AT THE AIRPORT AND FACILITATION IS FOR SERVICES PROVIDED TO THE PASSENGER AT THE AIRPORT. ON VERIFICATION OF THE RETURN IT WAS FOUND BY THE LD AO THAT ASSESSEE HAS PAID PASSENGER SERVICE FEES ON WHICH TAX D EDUCTION AT SOURCE IS NOT APPROPRIATELY MADE. ASSESSEE CONSIDERED THE SECURITY POTION OF PASSENGER SERVICES FEE NOT SUBJECT TO TAX DEDUCTION U/S 194C OF THE ACT BEING PAYMENT MADE TO CISF , WHICH IS A GOVT . THUS, AS PER ASSESSEE, ACCORDING TO SECTION 196 NO TAX IS REQUIRED TO BE DEDUCTED ON SECURITY COMPONENT. THE ASSESSING OFFICER HELD THAT TAX SHOULD HAVE BEEN DEDUCTED U/S 194J OF THE INCOME TAX ACT, 1961. THE AO CONSIDERED THE SECURITY COMPONENT AS PROFESSIONAL FEES U/S 194J. ON THE ISSUE OF SERVICE COMPONENT FEE THE ASSESSEE DEDUCTED TAX @ 2% ON SOME OF THE PAYMENTS, BUT THE LD AO CONSIDERED SUCH PAYMENT ALSO FALLING U/S 194J OF THE ACT. THEREFORE, HE HELD THAT ON TOTAL PAYMENT SHORTFALL OF TAX DEDUCTION AT SOURCE WAS RS. 135659952/ - U/S 201(1) A ND COMPUTED INTEREST U/S 201(1A) OF RS. 40095924/ - . 7 . ON APPEAL BEFORE THE LD CIT (A), HE HELD THAT ON SECURITY COMPONENT ASSESSEE SHOULD HAVE DEDUCTED TAX AT SOURCE AS CISF IS NOT GOVT. HE ALSO INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 5 HELD THAT ON SERVICE COMPONENT TAX SHOULD HAVE BEEN DEDUCTED @ 2 % . THUS, HE HELD THAT ON TOTAL PSF PAYMENTS TAX SHOULD HAVE BEEN DEDUCTED @ 2% CONSIDERING SUCH PAYMENT FALLING U/S 194C OF THE ACT AND NOT @ 10% AS AO CONSIDERED THEM AS FEES FOR PROFESSIONAL SERVICES. 8 . THEREFORE, AGGRIEVED WITH THIS FINDING OF THE LD CIT (A) THE ASSESSEE IS IN APPEAL AS PER GROUND NO. 2 AND AO IS ALSO IN THE APPEAL AS GROUND NO. 1 AND 2 OF THE APPEAL. THE LD AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF ACIT VS. JET AIRWAYS INDIA PVT. LTD 395 ITR 230 WHEREIN IT HAS BEEN HELD THAT THESE ARE NOT THE CHARGES FALLING U/S 194I OF THE ACT. HE SPECIFICALLY REFERRED TO THE ORDER OF THE COORDINATE BENCH IN ITA NO. 5264/MUM/2012 DATED 23.10.2013 IN CASE OF JET AIRWAYS WHICH HAS BEEN UPHELD BY HONOURABLE HIGH COURT. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS UTILIZED THE STANDARD FACILITIES, WHICH DOES NOT FALL INTO DEFINITION OF TECHNICAL SERVICES AND HENCE CANNOT BE S UBJECT TO WITHHOLDING TAX U/S 19 4 J OF THE ACT. H E RELIED UPON THE DECISION OF THE HON'BLE SUPREME COURT IN CIT VS. KOTAK SECURITIES LTD 383 ITR 1. HE ALSO PRESSED IN TO SERVICE GROUND NO 2.5 OF THE APPEAL STATING THAT IF SAME IS INCLUDED IN THE INCOME OF THE OPERATORS OF AIRPORT, ASSESSEE CANNOT BE DE EMED TO BE ASSESSEE IN DEFAULT. 9 . THE LD DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE LD ASSESSING OFFICER. 10 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. A SSESSEE IS ENGAGED IN THE BUSINESS OF TRANSPORT OF PASSENGERS BY AIRCRAFT AND USES AIRPORT. IT COLLECTS FROM PASSENGERS ON BEHALF OF THE AIRPORT OPERATOR A PASSENGER SERVICE FEES. IT HAS TWO COMPONENTS , SECURITY COMPONENTS AND FACILITATION COMPONENTS . ON THE SECURITY SERVICE CH ARGES, ASSESSEE DID NOT DEDUCT TAX AT SOURCE TAKING SHELTER U/S 196 OF THE ACT. HOWEVER, ON FACILITY COMPONENT ASSESSEE HAS DEDUCTED TAX WITH RESPECT TO CERTAIN LICENSEES AND WITH RESPECT TO THE OTHER LICENSEE NO TAX IS DEDUCTED. ACCORDING TO THE LD AO TAX SHOULD HAVE BEEN DEDUCTED ON BOTH THE ABOVE COMPONENTS U/S 194J OF THE ACT. THE LD CIT(A) HELD THAT TAX SHOULD HAVE BE EN DEDUCTED U/S 194C OF THE ACT. UNDOUBTEDLY, THE SERVICES PROVIDED TO THE ASSESSEE ARE NOT ANY SPECIALIZED SERVICES BUT INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 6 ONLY STANDAR D FACILITIES, WHICH ARE AVAILABLE TO ALL THE AIRLINES. THE HON'BLE SUPREME COURT HELD THAT WHERE THERE WAS NOTHING SPECIAL, EXCLUSIVE OR CUSTOMIZED SERVICES RENDERED TO THE ASSESSEE , IT FAILS TO SATISFY THE TEST OF SPECIALIZED , EXCLUSIVE AND INDIVIDUAL REQ UIREMENT OF THE USER , HENCE , SAME DOES NOT FALL WITHIN THE PROVISIONS OF TECHNICAL SERVICES AS PROVIDED U/S 194 J OF THE ACT. NATURALLY, THERE IS A COMPLETE ABSENCE OF ANY DISTINGUISHING FEATURE OR SERVICE WHICH IS PROVIDED TO THE ASSESSEE ESPICIALLY , IT I S AVAILABLE TO ALL THE AIRLINES. IN VIEW OF THIS , THERE CANNOT BE ANY TECHNICAL SERVICES FEES PAYABLE BY ASSESSEE , COVERED U/S 194J OF THE ACT. CERTAINLY, THE SAME PRINCIPLE APPLIES TO PROFESSIONAL SERVICES. IN VIEW OF THIS , WE DO NOT FIND ANY INFIRM ITY IN THE ORDER OF THE LD CIT ( A) HOLDING THAT THE PROVISIONS OF ABOVE SERVICES DO NOT FALL U/S 194J OF THE ACT. SOME OF DECISION RELIED UP ON BY THE LD AR ALSO SUPPORTS THAT VIEW, I.E. IN ACI T VS. SPICE JET LTD 6103/DEL/2015 COORDINATE BENCH HAS HELD THAT ON PSF TAX IS NOT REQUIRED TO BE DEDUCTED U/S 194J OF THE ACT. 11 . FURTHER SEVERAL DECISION RELIED UP ON BY LD AR ALSO SUPPORTS A VIEW THAT PSF IS NOT RENT AND HENCE NOT COVERED U/S 194 I OF THE ACT. I N CASE OF JET AIRWAYS INDIA LTD [ 15 8 TTJ 289 ] THE ISSUE WAS WHETHER THE FACILITATION COMPONENTS AND SECURITY FEES FALLS UNDER THE PROVISIONS OF SECTION 194I OF THE ACT OR NOT. COORDINATE BENCH HELD THAT IT IS NOT A RENT WHICH WAS UPHELD BY THE HONBLE HIGH COURT. FURTHER IN CASE OF GO AIRLI NES LTD THE ISSUE WAS ALSO WHETHER THE TAX ON PSF ARE COVERED BY THE PROVISIONS OF SECTION 194I OF THE ACT OR NOT. SIMILARLY, IN SINGAPORE AIRLINES [ 314/MUM/2014 ] THE ISSUE WAS WHETHER THE PROVISIONS OF SECTION 194I APPLY ON THESE PAYMENTS OR NOT. THEREFOR E, ALL THESE DECISIONS RELIED UPON BY THE ASSESSEE CLEARLY DEALS WITH THE ISSUE THAT PSF CHARGES ARE NOT RENT AND NO TAX IS REQUIRED TO BE DEDUCTED THEREON U/S 194I OF THE ACT. THERE IS NO QUARREL ON THIS ISSUE. 12 . HOWEVER, THE ISSUE BEFORE US IS WHETHER ON PSF CHARGES, TAX IS DEDUCTIBLE U/S 194C OF THE ACT AS HELD BY THE LD CIT(A). THE PROVISIONS OF SECTION 194C PROVIDES THAT ANY PERSONS RESPONSIBLE FOR PAYING ANY SUM FOR CARRYING OUT ANY WORK IN PURSUANCE OF A CONTRACT THE TAX IS REQUIRED TO BE DE DUCTED. IN THE PRESENT CASE WHERE THE SAMPLE BILLS ARE PROVIDED BEFORE US THE SERVICE TAX HAS BEEN CHARGE D BY AIRPORT AUTHORITY OF INDIA ON THE TOTAL SECURITY INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 7 COMPONENT AS WELL AS FACILITY COMPONENT. FOR EXAMPLE BILL DATED 22.06.2010 OF AIRPORT AUTHORITY OF INDIA ON THE ASSESSEE SHOWS THAT RS. 207 IS THE COMPOSITE RATE PER PASSENGER OF PSF CHARGES ON WHICH THE SERVICE TAX IS LEVIABLE. IN THE BILL ITSELF, THE AIRPORT AUTHORITY OF INDIA QUOTE SERVICE TAX REGISTRATION NO. AS WELL PAN. AS PER IN TERMS OF RULE 88 OF THE INDIAN AIRCRAFT RULES THE AIRPORT OPERATOR IS ENTITLED TO COLLECT PSF WHICH PROVIDES AS UNDER: - THE LICENSEE IS ENTITLED TO COLLECT FEES TO BE CALLED AS PASSENGERS SERVICES FEES (PSF) FROM THE EMBARKING PASSENGERS AT SUCH RATE AS THE CENTRAL G OVERNMENT MAY SPECIFY AND IS ALSO LIABLE TO PAY FOR SECURITY COMPONENT TO ANY SECURITY AGENCY DESIGNATED BY THE CENTRAL GOVERNMENT FOR PROVIDING THE SECURITY SERVICES .' 13 . THEREFORE THE SECURITY SERVICES ARE TO BE PROVIDED BY THE AIRPORT OWNERS AND OPERATORS, WHO WILL IN TURN OBTAIN IT FROM ANY GOVERNMENT AGENCY SPECIFIED BY CENTRAL GOVERNMENT. FURTHER, THE FACILITY CHARGES ARE UNDENIABLY, SERVICE PROVIDED BY THE AIRPOR T OPERATORS TO THE PASSENGERS OF THE AIRLINE ASSESSEE. THEREFORE, IT IS APPARENT THAT THESE PARTIES ARE PROVIDING TO THE ASSESSEE SERVICES . THUS, WE DO NOT FIND ANY REASON TO HOLD THAT THE PROVISIONS OF SECTION 194C DO NOT APPLY TO THE PASSENGER SERVICE FEE PAYMENTS. IT IS ALSO RELEVANT TO NOTE THAT SEVERAL PRIVATE COMPANIES AND JOINT VENTURE S OWNED AND OPERATE THE AIRPORTS IN THE COUNTRY. FOR THE FACILITY AND SECURITY OF THE PASSENGERS THE AIRLINES ARE COLLECTING SUCH FEES. ONLY FOR THE SECURITY REASONS CISF , AS DESIGNATED BY CENTRAL GOVERNMENT, IS DEPLOYED AT THOSE AIRPORTS. THE AIRLINE FOR THIS REASON PASSENGER SERVICE FEES IS COLLECTED IN THEIR BILLS BY THE AIRLINE ASSESSEE . AGAINST THIS THE PASSENGERS WHO AVAILED THE SERVICES OF THE ASSESSEE ARE PROV IDED FACILITY AND SECURITY. THEREFORE, THE PAYMENT BY THE ASSESSEE TO THE OWNER OF THE AIRPORT IS FOR THE PURPOSE OF WORK WHICH IS COVERED U/S 194C OF THE ACT. THUS, WE HOLD THAT ASSESSEE SHOULD HAVE DEDUCTED TAX AT SOURCE U/S 194C OF THE ACT. THUS, WE UPH OLD THE ORDER OF THE LD CIT (A) TO THAT EXTENT. 14 . THE NEXT ARGUMENT IS THAT SECURITY PORTION IS PAYABLE BY THE AIRPORT AUTHORITY OF INDIA AND OTHERS TO CISF WHICH IS GOVT. FIRSTLY, THIS ARGUMENT IS FLAWED BECAUSE ASSESSEE DOES NOT PAY ANY SUM TO CISF BUT IT IS PAID BY THE OWNERS AND OPERATORS OF THE AIRPORT. HENCE, IN THE CASE OF THE ASSESSEE IT INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 8 CANNOT TAKE SHELTER U/S 196 OF THE ACT AS THE ASSESSEE IS NOT PAYEE TO CISF BUT AIRPORT OPERATORS PAY IT. THUS, WE UPHOLD THE ORDER OF THE LD CIT (A) TO THAT EXT ENT. 15 . DURING THE COURSE OF HEARING, ASSESSEE SUBMITTED THAT IN GRO UND NO. 2.5 ASSESSEE CONTENDS, WITHOUT PREJUDICE , THAT WITHOUT MAKING ANY ENQUIRY AS TO WHETHER OR NOT THE RESPECTIVE AIRPORT OPERATORS HAVE INCLUDED THE ABOVE SUM OF PSF AS THE I R TAXABLE INCOME THE ASSESSEE CANNOT BE HELD TO BE AN ASSESSEE IN DEFAULT. THE A SSESSEE FURTHER SUBMITTED ADDITIONAL EVIDENCE INVOKING RULE 29 OF THE ITA T RULES BEING CERTIFICATE ISSUED BY COCHIN INTERNATIONAL AIRPORT, MIHAN LTD AND DIAL STATING THAT SECURITY AND FACILITATION FEE RECEIVED BY THEM HAVE BEEN INCLUDED IN THEIR TOTAL INCOME. ADMITTEDLY, FIRST PROVISO IS ADDED U/S 201 OF THE ACT BY FINANCE ACT 2012 W.E.F 01.07.2012 WHICH PROVIDES THAT WHERE AN ASSESSEE FAILS TO DEDUCT THE TAX AT SOURC E, IT SHALL NOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT PROVIDED THE RECIPIENT HAS FURNISHED HIS RETURN OF INCOME TAKING ABOVE SUM IT ITS INCOME AND PAID DUE TAX THEREON. THE COURTS HAVE HELD THAT ABOVE PROVISION APPLIES RETROSPECTIVELY. THEREFORE, THE ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE DESERVES TO BE ADMITTED. TO ENABLE OPERATION OF PROVISION TO SECTION 201 OF THE ACT, RULE 31ACB HAS BEEN INTRODUCED WHICH PROVIDES FORM NO. 26A WITH RESPECT TO THE ABOVE AMENDMENT. IN VIEW OF THIS IF THE ASS ESSEE FULFILS THE REQUISITE CONDITIONS AS PROVIDED IN PROVISO TO SECTION 201, RULE 31ACB IN FORM NO. 26A , THEN ASSESSEE CANNOT BE DEEMED TO BE AN ASSESSEE IN DEFAULT IN TERMS OF SECTION 201 OF THE ACT. THUS, WE ALLOW GROUND NO. 2.5 OF THE APPEAL WITH A DIRECTION TO THE ASSESSEE TO FULFILL REQUISITE CONDITIONS BY FURNISHING NECESSARY DETAILS TO AVAIL BENEFIT OF PR O VISO TO SECTION 201 OF THE ACT WITHIN 3 MONTHS FROM THE DATE OF THIS ORDER . THE LD AO MAY VERIFY THE REQUISITE DETAIL AND PASS THE ORDER IN ACC ORDANCE WITH THE LAW. ACCORDINGLY, GROUND NO. 2 OF THE APPEAL IS PARTLY ALLOWED WITH ABOVE DIRECTION. 16 . THE GROUND NO. 3 OF THE APPEAL IS WITH RESPECT TO DEDUCTION OF TAX AT SOURCE ON YEAR - END PROVISIONS . THE LD ASSESSING OFFICER ON EXAMINATION OF TAX AUDIT REPORT FOUND THAT ASSESSEE HAS NOT DEDUCTED TAX AT SOURCE ON VARIOUS PROVISIONS MADE. THE ASSESSEE SUBMITTED THAT AS IT IS MAKING YEAR END INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 9 PROVISIONS TO MEET COMPLIANCE WITH PROVISIONS OF ACCRUAL SYSTEM OF ACCOUNTING AND NO TAX IS REQUIRED TO BE DEDUCTED AS ASSESSEE IS NOT RESPONSIBLE FOR MAKING PAYMENTS IN ABSENCE OF UNIDENTIFIED PAY. THE LD ASSESSING OFFICER REJECTED THE EXPLANATION OF THE ASSESSEE AND FOUND THAT ASSESSEE SHOULD HAVE DEDUCTED TAX AT SOU RCE ON THE ABOVE SUM AS ASSESSEE HAS MADE ASCERTAINED PROVISION OF EXPENSES. ON APPEAL , LD CIT(A) HELD THAT THE TAX IS REQUIRED TO BE DEDUCTED ON PROVISIONS FOR EXPENSES. HOWEVER, NOTING THE FACT THAT IN THE SUBSEQUENT YEAR THE TAX IS DEDUCTED AS SOON A S THE PROVISIONS ARE UTILIZED WHEN BILLS ARE RECEIVED, HE RESTRICTED THE FAILURE TO DEDUCT TAX TO THE EXTENT OF AMOUNT OF PROVISIONS UNUTILIZED. 17 . THE LD AUTHORISED REPRESENTATIVE SUBMITTED THAT THE PROVISIONS ARE MADE AT THE END OF THE ACCOUNTING YEAR AS A SSESSEE IS OPERATING AT MULTIPLE LOCATIONS. HE SUBMITTED THAT THE PROVISIONS HAVE BEEN MADE ON THE BASIS OF ASCERTAINED LIABILITY. SUCH PROVISIONS ARE REVERSED AS AND WHEN THE BILLS FOR SERVICES ARE RECEIVED. TAX IS DEDUCTED BY ASSESSEE AT THAT PARTICULAR TIME. HE FURTHER STATED THAT AS BILLS ARE NOT RECEIVED, THE PAYEES ARE NOT IDENTIFIED AND THEREFORE, CREDIT FOR TDS CANNOT BE PASSED ON EVEN IF THE TAX IS DEDUCTED. HE FURTHER SUBMITTED THAT WHEN THE BILLS ARE RECEIVED THE TAX IS DEDUCTED THEREON. HENCE, A CCORDING TO HIM TAX IS NOT REQUIRED TO BE DEDUCTED ON YEAR END PROVISIONS. 18 . THE LD DEPARTMENTAL REPRESENTATIVE VEHEMENTLY SUPPORTED THE ORDER OF THE LD ASSESSING OFFICER. IT WAS SUBMITTED THAT PROVISIONS CANNOT BE MADE WITHOUT IDENTIFYING THE PARTY AND THE EXACT QUANTUM OF AMOUNT PAYABLE TO THEM. HENCE, IT WAS SUBMITTED THAT THE PARTY ARE IDENTIFIED AND THE AMOUNT. ARE QUANTIFIED THEREFORE, THE ASSESSEE CANNOT BE SAY THAT PAYEES ARE NOT IDENTIFIED. 19 . WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. ASSESSEE HAS MADE PROVISION FOR AIR PORT EXPENSES OF RS 32314535/ - , AIRPORT HANDLING EXPENSES RS . 14115000/ - , CREW ACCOMMODATION EXPENSE RS 694000/ - , IT COMMUNICATION CHAR GES RS 7021580/ - AND PROVISION FOR O THER EXPENSES RS 74335080/ - . ADMITTEDLY ASSESSEE HAS NOT DEDUCTED TAX AND SOURCE ON THE ABOVE SUM STATING THAT IT IS YEAR AND PROVISION AND THE PEAS ARE NOT IDENTIFIED. IT IS NOT THE CASE OF THE INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 10 ASSESSEE THAT THESE ARE WE ARE ON ASCERTAINED LIABILITIES. A CCORDING TO THE PROVISIONS OF THE INCOME TAX ACT THE TAX IS REQUIRED TO BE DEDUCTED AS AND WHEN ASSESSEE BECOMES RESPONSIBLE FOR PAYMENT OF ABOVE SUM TO OTHER PARTIES. THE CLAIM OF THE ASSESSEE IS THAT IT IS MAINTAINING ITS BOOKS OF ACCOUNT ON ACCRUAL BASI S OF ACCOUNTING AND THEREFORE THE AMOUNT IS REQUIRED TO BE PROVIDED FOR. WHEN THE EXPENDITURE INCURRED BY THE ASSESSEE, THE CORRESPONDING LIABILITY DEFINITELY ARISES FOR PAYMENT OF SUCH EXPENDITURE. THE AMOUNT OF EXPENDITURE INCURRED CAN BE DETERMINED ONLY IF, THERE IS A RECIPIENT IDENTIFIED OF THE SUM, THERE IS A METHODOLOGY AVAILABLE FOR WORKING OUT THE AMOUNT PAYABLE BY THE ASSESSEE TO THE RECIPIENT, THERE IS A CORRESPONDING LIABILITY ARISING OUT OF THE EXISTING CONTRACT OR CUSTOMS BY THE ASSESSEE WITH T HE RECIPIENT. IF GENERALLY THESE INGREDIENTS ARE NOT SATISFIED ASSESSEE CANNOT BE SAID TO HAVE INCURRED THE EXPENDITURE. IN ABSENCE OF ONE OF ONE OF THESE CRITERIA, IF PROVISION IS MADE, IT IS NOT AN ASCERTAINED LIABILITY BUT AN UNASCERTAINED LIABILITY, WH ICH DOES NOT SATISFIED THE CONCEPT OF ACCRUAL OF EXPENDITURE. THERE MAY BE REASONS FOR RECEIVING THE BILLS BY THE SERVICE PROVIDERS AFTER CERTAIN TIME LAG BUT THAT DOES NOT ABSOLVE THE ASSESSEE FROM THE LIABILITY OF DEDUCTION OF TAX AT SOURCE. IN THE PRESE NT CASE THE PROVISION IS MADE UNDER THE SPECIFIED HEAD, PROVISION IS ALSO MADE TO ON CERTAIN BASIS THEREBY ASCERTAINING THE AMOUNT. IT IS NOT THE CASE OF THE ASSESSEE THAT IT HAS MADE AN AD HOC PROVISION. THUS IT CANNOT BE SAID THAT THE PAYEE IS NOT IDENTI FIED. THEREFORE, ACCORDING TO US, THE TAX IS REQUIRED TO BE DEDUCTED ON THE YEAR - END PROVISIONS MADE BY THE ASSESSEE WHICH ARE ASCERTAINED LIABILI TIES. NO DOUBT, THE LEARNED CIT(A) HAS GIVEN THE BENEFIT OF THE ASSESSEE IF TAX IS DEDUCTED BY THE ASSESSEE SU BSEQUENTLY . THEREFORE WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE LEARNED CIT (A) IN HOLDING THAT ASSESSEE HAS FAILED TO DEDUCTED TAX AT SOURCE ON YEAR - END PROVISIONS. THUS THE ORDER OF THE LEARNED CIT (A) IS UPHELD TO THAT EXTENT. 20 . TO SUPPORT ITS CONTEN TION THE ASSESSEE HAS RELIED UPON THE SEVERAL DECISIONS OF VARIOUS COURTS. THE FIRST DECISION RELIED UPON IS OF HONOURABLE DELHI HIGH COURT IN 369 ITR 335 IN CASE OF UCO BANK WHERE THE HONBLE HIGH COURT HAS HELD THAT WHERE THE RECIPIENT OF THE INCOME IS UNIDENTIFIED THE PROVISIONS OF SECTION 194A DOES NOT APPLY. HOWEVER IN THE PRESENT CASE INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 11 ASSESSEE HAS MADE AN ASCERTAINED PROVISION THEREFORE, NATURALLY AT THE TIME OF MAKING OF THE PROVISIONS T HE PAYEES IDENTIFIED BECAUSE THE PROVISION IS MADE ONLY ON THE BASIS OF TERMS AND CONDITIONS AGREED WITH THE RECIPIENT OF THE INCOME. THEREFORE, THE DECISION OF THE HONBLE DELHI HIGH COURT DOES NOT APPLY ON FACTS OF THE CASE. 21 . THE NEXT DECISION RELIED UPON IS OF HONBLE KARNATAKA HIGH COURT IN 383 ITR 59 WHEREIN IT WAS NOTED THAT SUBSEQUENTLY AFTER MAKING THE PROVISION IT WAS NOTICED THAT THE SAID INTEREST WOULD NEVER BE PAID TO SUPPLIERS AND THE CORRESPONDING REVERSAL ENTRIES WERE MADE IN THE BOOKS OF ACCO UNT. IN THESE FACTS THE HONBLE KARNATAKA HIGH COURT HAS HELD THAT SEX IS NOT REQUIRED TO BE DEDUCTED IS NO INCOME ACCRUED TO THE RECIPIENT. IN THE PRESENT CASE IT IS NOT THE CASE OF THE ASSESSEE THAT ABOUT LIABILITY IS NOT PAYABLE TO THE PARTIES. ASSESSEE HIMSELF AND STATED THAT SUBSEQUENTLY WHEN THE BILLS ARE RECEIVED OF THE SAME PARTIES, THE TAX IS DEDUCTED THEREON. THUS, THE FACTS OF THIS CASE RELIED UPON BY THE ASSESSEE IS NOT APPLICABLE. 22 . THE ASSESSEE HAS FURTHER RELIED UPON THE DECISION OF THE COORDIN ATE BENCH IN 163 ITD 177 IN CASE OF APOLLO TYRES LTD WHEREIN THE FACTS SHOWS THAT THE ASSESSEE MADE AN YEAR - ROUND PROVISION WHICH WAS NEVER SUBSEQUENTLY AND THE DEDUCTION WAS CLAIMED ON THE BASIS OF THE ACTUAL EXPENDITURE INCURRED ON WHEN SUCH EXPENDITURE WERE ACTUALLY INCURRED THE TDS WAS MADE AS PER THE PROVISIONS OF THE LAW. HERE IN THE PRESENT CASE THE ASSESSEE SAYS THAT THE EXPENDITURE HAVE BEEN INCURRED DURING THE YEAR WHEN THE PROVISION ITSELF IS MADE. THEREFORE THE YEAR OF INCURRING OF THE EXPENDITU RE IN THE YEAR OF MAKING THE PROVISION IS SAME. THUS THE FACTS OF THE PRESENT CASE ARE DIFFERENT FROM THE DECISION RELIED UPON BY THE LEARNED AUTHORISED REPRESENTATIVE. 23 . FURTHER THE ASSESSEE HAS RELIED UPON THE DECISION IN CASE OF ALLIANCE MEDIA AND ENTERTA INMENT LTD 163 ITD 627 WHERE THE PAYMENT MADE TO ARTIST WERE PROVIDED HOWEVER THE ASSESSEE COULD NOT IDENTIFY THE PAYEES AN AMOUNT TO BE PAID TO THEM WAS ALSO NOT CRYSTALLISED. IT WAS ALSO IS HELD THAT IT WAS SUBJECT TO NEGOTIATION AND ASSESSEE HAD NO LIAB ILITY TO DEDUCT TAX AT SOURCE IN RESPECT OF THE PROVISIONS OF MADE. IN THE PRESENT CASE THERE IS A CRYSTALLISED LIABILITY ON THE ASSESSEE OF EXPENDITURE INCURRED OTHERWISE THE INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 12 SAME EXPENDITURE COULD NOT HAVE BEEN ACCRUED AS A LIABILITY TO THE ASSESSEE. IT BECOMES AN UNASCERTAINED LIABILITY AND THERE IS NO REQUIREMENT OF LAW TO MAKE A PROVISION FOR UNASCERTAINED LIABILITY, THEREFORE, IT GOES AGAINST THE ORIGINAL ARGUMENT OF THE ASSESSEE THAT ASSESSEE IS MAINTAINING BOOKS ON MERCANTILE SYSTEM OF ACCOUNTING AN D IT HAS TO MAKE A PROVISION FOR SUCH LIABILITIES. THEREFORE THE ABOVE DECISIONS CANNOT COME TO THE RESCUE OF THE ASSESSEE. 24 . THE ANOTHER DECISION RELIED UPON BY THE ASSESSEE IS IN CASE OF PFIZER LTD WHERE IT WAS HELD THAT ASSESSEE DID NOT CLAIM SUCH EXPENDI TURE IS ALLOWABLE EXPENDITURE AND IT WAS DISALLOWED IT UNDER SECTION 40(A)(I) OF THE ACT. THUS IN THAT CASE ASSESSEE HIMSELF ADMITTED THAT EXPOSE DEDUCTIBLE AT SOURCE AND ASSESSEE DID NOT DEDUCT THE TAX ON SUCH EXPENDITURE AND THEREFORE SAME WERE DISALLOWE D. HERE THE ASSESSEE IS DENYING THE LIABILITY FOR DEDUCTION OF TAX AND SOURCE ITSELF AS THE PEAS ARE NOT IDENTIFIED. THEREFORE, THE FACTS OF THAT CASE DO NOT APPLY TO THE FACTS OF THE CASE BEFORE US. 25 . NOW IF THE RECIPIENT OF THE INCOME HAS SHOWN THE ABOVE P ROVISION IN THE INCOME BY FILING THE RETURN OF INCOME AND PAYING TAX THEREON, THE ASSESSEE SHOULD BE GRANTED THE BENEFIT OF THE PROVISO TO SECTION 201 OF THE INCOME TAX ACT. IN VIEW OF THIS, THE ASSESSEE IS DIRECTED TO SUBMIT THE RELEVANT DETAILS IN FORM N UMBER 26A OF THE INCOME TAX ACT RULES BEFORE THE ASSESSING OFFICER. ON RECEIPT OF THE ABOVE INFORMATION FROM THE ASSESSEE, THE AO MAY DETERMINE THE AMOUNT OF DEFAULT BY THE ASSESSEE AND THEN REWORK THE LIABILITY ARISING ON THE ASSESSEE UNDER SECTION 201 OF THE INCOME TAX ACT. IN VIEW OF THIS GROUND NUMBER THREE OF THE APPEAL OF THE ASSESSEE IS ALSO SET ASIDE TO THE FILE OF THE LEARNED AO. 26 . THE FOURTH GROUND OF APPEAL IS WITH RESPECT TO THE LEV Y OF INTEREST UNDER SECTION 201 (1A) OF THE INCOME TAX ACT. THE AO HAS CHARGED THE INTEREST FROM THE. BEGINNING FROM THE MONTH IN WHICH TAX WAS DEDUCTIBLE UP TO THE END OF THE MONTH IN WHICH THE RETURN WAS DUE TO BE FILED BY THE DEDUCTED, WITHOUT APPRECIATING THAT INTEREST UNDER THAT SECTION, IF LEVIABLE, WAS REQUIRED TO BE COMPUTED ONLY TILL THE END OF THE RELEVANT PREVIOUS YEAR. TO EXAMINE THE ABOVE ARGUMENT OF THE ASSESSEE THE PROVISO TO SECTION 201(1A) IS REQUIRED TO BE SEEN WHICH IS ADDED WITH EFFECT FROM 0 1 - 0 7 - 2012 CORRESPONDING TO THE INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 13 PROVISO ADDED TO SECTION 201 OF THE INCOME TAX ACT. ACCORDING TO THAT PROVISO THE INTEREST SHALL BE CHARGEABLE FROM THE DATE ON WHICH SUCH TAX WAS DEDUCTIBLE TO THE DATE OF FURNISHING OF RETURN OF INCOME BY THE PAYEE. HOWEVER AS THE GROUND NUMBER TWO AND THREE OF THE APPEAL OF THE ASSES SEE ARE SET ASIDE TO THE FILE OF THE LEARNED ASSESSING OFFICER, THE ASSESSEE IS AT LIBERTY TO RAISE THE AMOUNT OF CHARGEABILITY OF INTEREST WITH RESPECT TO THE PERIOD, WE ALSO SET ASIDE THIS GROUND OF APPEAL TO THE FILE OF THE LEARNED ASSESSING OFFICER WIT H THE LIBERTY TO ASSESSEE TO RAISE ALL THE PLEAS CHARGING OF INTEREST. ACCORDINGLY GROUND NUMBER FOUR OF THE APPEAL OF THE ASSESSEE IS ALSO SET ASIDE TO THE FILE OF THE LEARNED ASSESSING OFFICER. 27 . ACCORDINGLY ITA NO. 5347/DEL/2012 FILED BY THE ASSESSEE FOR ASSESSMENT YEAR 2010 11 IS PARTLY ALLOWED. 28 . NOW COMING TO THE APPEAL OF THE LEARNED ASSESSING OFFICER WITH RESPECT TO DEDUCTION OF TAX AT SOURCE ON CREDIT CARD GATEWAY FACILITY FEE RAISED AS PER GROUND NUMBER THREE . THE FACTS OF THAT ASSESSEE HAS ENTERED INTO AN AGREEMENT WITH VARIOUS BANKS AND OTHER ENTITIES TO AVAIL CREDIT CARD GATEWAY SERVICES UNDER A NON - EXCLUSIVE AGREEMENT FOR ONLINE BOOKING OF TICKETS BY PASSENGERS USING CREDIT CARDS. AS MANDATED BY THE RESERV E BANK OF INDIA ONLINE CREDIT CARD TRANSACTION MUST BE CREDITED TO SECURE GATEWAYS. ACCORDINGLY, THE AMOUNT OF AIRFARE PAID BY THE TRAVELER THROUGH THE CREDIT CARD IS RECEIVED BY THE BANKS AND THE BANKS LIMIT THE SAME TO THE ACCOUNT OF THE APPELLANT AFTER DEDUCTING THEIR SERVICE FEE. THE BANKS PROVIDE SIMILAR FACILITIES TO OTHER VENDORS. THE FEES CHARGED BY THE BANKS ARE FOR STANDARD CREDIT CARD GATEWAY FACILITY PROVIDED TO VARIOUS VENDORS SUCH AS ASSESSEE. ACCORDING TO THE AO THE ASSESSEE SHOULD HAVE DEDUC TED TAX AND SOURCE OF SUCH PAYMENTS UNDER THE PROVISIONS OF SECTION 194 H OF THE INCOME TAX ACT. THE LEARNED CIT A , ON APPEAL , HELD THAT ASSESSEE IS NOT AN ASSESSEE IN DEFAULT FOR NON - DEDUCTION OF TAX ON THE ABOVE SUM FOR THE REASON THAT BANKS ACTUALLY MADE THAT PAYMENT TO THE APPELLANT AFTER RETAINING THEIR FEES AND THE LIABILITY TO DEDUCT TAX WAS THAT OF THE BANK AND NOT THE APPELLANT. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF THE LEARNED CIT (A) . 29 . WE HAVE CAREFULLY CONSIDERED THE CONTENTIONS RAISED BY BOTH THE PARTIES. THE CIRCULAR DATED 31 DECEMBER 2012 HAS BEEN BROUGHT TO OUR NOTICE WHEREIN INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 14 UNDER SECTION 197A OF THE INCOME TAX ACT NO DEDUCTION IS REQUIRED TO BE MADE ON SPECIFIED PAYMENT WITH RESPECT TO THE CREDIT CARD OR DEBIT CARD COMMISSION FOR T RANSACTION BETWEEN THE MERCHANT ESTABLISHMENT AND THE BANK. IN VIEW OF THE ABOVE CIRCULAR IS APPARENT THAT TAX IS NOT REQUIRED TO BE DEDUCTED ON SUCH PAYMENT. THOUGH THE CIRCULAR IS APPLICABLE WITH EFFECT FROM FIRST DAY OF JANUARY 2013 BUT IT LAYS DOWN THE PRINCIPLE THAT TAX IS NOT REQUIRED TO BE DEDUCTED ON SUCH SUM. THE IDENTICAL ISSUES COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE COORDINATE BENCH IN ITA NUMBER 6103/DEL/2015 FOR ASSESSMENT YEAR 2012 13 IN CASE OF SPICEJET LTD WHEREIN IN PARA NUMBER 6.4 THE COORDINATE BENCH RELYING UPON THE DECISION OF THE HONOURABLE JURISDICTIONAL HIGH COURT HAS HELD THAT ASSESSEE WAS NOT REQUIRED TO DEDUCT EXCEPT SOURCE ON CHARGES WRITTEN BY BANK AND CREDIT CARD AGENCIES OUT OF THE SAME CONSIDERATION OF TICK ET BOOKED THROUGH CREDIT/DEBIT CARDS AND THE PROVISIONS OF SECTION 194H ARE NOT ATTRACTED. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE COORDINATE BENCH WE FIND NO INFIRMITY IN THE ORDER OF THE LEARNED CIT (A) . THE ASSESSEE CANNOT BE HELD TO BE AN A SSESSEE IN DEFAULT WITH RESPECT TO THE ABOVE PAYMENT. ACCORDINGLY GROUND NUMBER TWO OF THE APPEAL OF THE LEARNED ASSESSING OFFICER IS DISMISSED. 30 . GROUND NOS. 1 AND 2 OF THE APPEAL OF THE LEARNED ASSESSING OFFICER ARE WITH RESPECT TO DEDUCTION OF TAX AND S OURCE ON PASSENGER SERVICE FEE. THIS ISSUE HAS BEEN DEALT WITH BY IN DECIDING THE GROUND NUMBER TWO OF THE APPEAL OF THE ASSESSEE. THEREFORE, WE DISMISS THOSE GROUNDS. 31 . GROUND NOS. 4 OF THE APPEAL OF THE AO IS WITH RESPECT TO CHARGING OF INTEREST WHICH IS B EEN SET ASIDE TO THE FILE OF THE LEARNED ASSESSING OFFICER WHILE DECIDING THE GROUND NUMBER FOUR OF THE APPEAL OF THE ASSESSEE WHEREIN WE HAVE REFERRED TO THE FIRST PROVISO TO SECTION 201 (1A) OF THE ACT PROVIDES FOR CHARGING OF THE INTEREST. ACCORDINGLY G ROUND NUMBER THREE OF THE APPEAL OF THE AO IS DISMISSED. 32 . ACCORDINGLY , FOR ASSESSMENT YEAR 201 0 - 11 , APPEAL OF THE ASSESSEE IS PARTLY ALLOWED AND APPEAL OF THE ASSESSING OFFICER IS DISMISSED. 33 . ON SIMILAR LINES AS COMPARED TO ASSESSMENT YEAR 2010 11, THE ASS ESSEE AS WELL AS THE LEARNED ASSESSING OFFICER HAS FILED APPEAL FOR THIS ASSESSMENT INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 15 YEAR I.E. ASSESSMENT YEAR 2011 - 12. THE ASSESSEE IS IN APPEAL IN ITA NO. 4449/ DEL /2013 AND THE REVENUE IS IN APPEAL FILED ITA NO. 5114/ DEL /2013. THERE IS NO CHANGE IN THE FA CTS AND CIRCUMSTANCES OF THE CASE AS WELL AS THE ARGUMENTS OF BOTH THE PARTIES. 34 . NOW WE COME TO THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2011 - 12. GROUND NUMBER ONE OF THE APPEAL IS GENERAL IN NATURE AND THEREFORE SAME IS DISMISSED. 35 . GROUND NUMBER TWO RELATES TO THE TAX DEDUCTION AT SOURCE ON PASSENGER SERVICE FEE. THIS GROUND IS IDENTICAL TO THE GROUND NUMBER TWO OF THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 11. THEREFORE, FOR THE REASONS GIVEN WHILE DECIDING THAT GROUND OF APPEAL, WE ALSO SET ASIDE THIS GROUND OF APPEAL TO THE FILE OF THE LEARNED ASSESSING OFFICER WITH SIMILAR DIRECTION. 36 . GROUND NUMBER THREE RELATES TO DEDUCTION OF TAX AT SOURCE ON HERE AND PROVISIONS MADE BY THE ASSESSEE. THIS GROUND IS IDENTICAL TO THE GROUND NUMBER THREE OF THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2010 - 11 WHICH WE SET ASIDE TO THE FILE OF THE LEARNED ASSESSING OFFICER. FOR SIMILAR REASONS WE ALSO SET ASIDE THIS GROUND OF APPEAL WITH SIMILAR DIRECTION TO THE FILE OF THE LEARNED ASSESSING OFFICER. 37 . GROUND NUMBER FOUR IS WITH RESPECT TO THE CHARGEABILITY OF INTEREST UNDER SECTION 201 (1A) OF THE INCOME TAX ACT WHICH IS IDENTICAL TO GROUND NUMBER FOUR OF THE APPEAL OF THE ASSESSEE FOR ASSESSMENT YEAR 2010 11 WHICH HAS BEEN SET ASIDE TO THE FILE OF THE LEARN ED ASSESSING OFFICER. FOR THE SIMILAR REASONS WE ALSO SET ASIDE THIS GROUND TO THE FILE OF THE LEARNED ASSESSING OFFICER. 38 . COMING TO THE APPEAL OF THE LEARNED ASSESSING OFFICER, GROUND NUMBER 1, RELATES TO THE TAX DEDUCTION AT SOURCE ON PASSENGER SERVICE FE E. THIS ISSUE AS ALREADY BEEN DECIDED IN ASSESSMENT YEAR 2010 11. THUS, WE DISMISS THIS GROUND OF APPEAL AS WE HAVE ALREADY HELD THAT TAX IS NOT DEDUCTIBLE AT SOURCE ON PASSENGER SERVICE FEE UNDER SECTION 194J OF THE INCOME TAX ACT BUT UNDER SECTION 194C OF THE ACT. 39 . THE GROUND NUMBER TWO RELATES TO DEDUCTION OF TAX AT SOURCE WITH REGARD TO THE CREDIT CARD GATEWAY FACILITY FEE, WHICH HAS BEEN CONSIDERED IN GROUND NUMBER THREE OF THE APPEAL OF THE LEARNED ASSESSING OFFICER FOR ASSESSMENT INTER GLOBE AVIATION LTD VS ACIT ITA NO.5347& 4449/DEL/2012 ITA NO.223 & 5114/DEL/2013 (ASSESSMENT YEAR: 2010 - 11 TO 2011 - 12 PAGE | 16 YEAR 2010 - 11 WHEREI N WE HAVE DISMISSED THAT GROUND. THUS FOR SIMILAR REASONS WE DISMISS GROUND NUMBER TWO OF THE APPEAL OF THE LEARNED ASSESSING OFFICER. 40 . GROUND NUMBER THREE RELATES TO THE CHARGING OF INTEREST UNDER SECTION 201 (1A) OF THE INCOME TAX ACT. WE HAVE SET ASIDE T HIS GROUND OF APPEAL IN ASSESSMENT YEAR 2010 - 11 WHILE DECIDING THE APPEAL OF THE ASSESSEE, BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER THEREFORE FOR SIMILAR REASONS, THEREFORE THIS GROUND OF APPEAL IS DISMISSED. 41 . ACCORDINGLY FO R ASSESSMENT YEAR 2011 - 12 APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND APPEAL FILED BY THE LEARNED ASSESSING OFFICER IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 07 / 0 1/2020 - SD/ - - SD/ - ( BHAVNESH SAINI ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 07 / 01 / 2020 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI