By TIOL News Service

ERNAKULAM, SEPT 06, 2018: THE ISSUE AT HAND BEFORE THE BENCH IS - Whether the Tribunal can abandon its role as fact-finding authority & mechanically follow a decision of the Apex Court, without distinguishingthe facts in both the cases. NO IS THE VERDICT.

The bench also observed that the Supreme Court's powers to issue directions cannot be assumed by the Tribunal to issue directions in a similar manner. It also held that the Tribunal could have disposed of the matter itself as the requisite facts were available to it.

Facts of the case

On assessment for the relevant AY, the Revenue alleged that the assessee failed to deduct TDS in respect of several transactions entered into by it. It was also alleged that the assessee was delayed in deducting TDS in certain instances. The transactions involved payment against contracts, commission, rent, salary, professional and consultancy charges, payment of uplink charges, payment of backhaul link usage charges, equipment hire charges and camera rental payments. The Revenue also imposed penalty u/s 271C. On appeal, the Tribunal remanded the matter.

On appeal, the High Court held that,

++ the Tribunal being the fact finding authority ought to have looked into facts without making a remand on the basis of the directions issued by the Supreme Court. The Tribunal being a creature of the statute, cannot adopt the directions issued by the Supreme Court without looking into the distinction on facts, on which the directions were issued as against the facts available in the case before it. The Supreme Court's powers to issue directions cannot be assumed by the Tribunal to issue directions in a similar manner. The issues could be dealt with by the Tribunal itself;

++ on the tax deduction from payment of contracts, commission, rent, salary, professional and consultancy charges for the financial years 2003-04 to 2007-08, the assessee shall produce sufficient evidence before the Tribunal as has been laid down in Circular No.275/201/95-IT (B) dated 29.1.1997. The Tribunal shall look into it and after verification, pass appropriate orders as per the directions of the Supreme Court in Hindustan Coca Cola Beverage P. Ltd. v. Commissioner of Income Tax. Regarding the payments of uplink charges and backhaul link usage charges, the Tribunal shall examine an expert as produced by the assessee and the Department shall be permitted to cross examine the expert as also produce any further evidence or witnesses on their behalf. It is made clear that there can be no liability on hire charges and camera rental payments for the financial years 2003-04 to 2006-07. The order of the AO as confirmed by the appellate authority is deleted for the said years. The Tribunal shall pass appropriate orders as per the directions issued. The Income Tax Appeals are remanded for fresh consideration. However, the rental charges and hire or equipment charges shall be sustained only for the financial year 2007-08, the assessment year of which is 2008-09. However, the assessee shall be given an opportunity to produce sufficient evidence as per the circular on which appropriate orders shall be passed on the liability of the assessee.

(See 2018-TIOL-1841-HC-KERALA-IT)