The Delhi High Court while dismissing the writ petition in respect of the Income Tax Demand against BT India.
The question which arose for consideration is: whether the proceedings under Sections 201(1) and 201(1a) of the Income Tax Act, 1961 could have been initiated without the concerned officer determining the jurisdictional issue as to whether the remittances made were chargeable to tax.
Mr. Ajay Vohra, learned Senior Counsel, who appears on behalf of the petitioners, i.e., the deductors, says that this was the issue which the concerned officer ought to have decided at the very threshold.
On the other hand, Mr. Aggarwal, who appears on behalf of the revenue submitted that there are several recipients in relationwhose deductions had to be made by the petitioners apart from BT Plc. It is also Mr. Aggarwal’s submission that in two assessment years i.e., 2012-2013 and 2013-2014, the petitioners have taken recourse to the remedies available under the Act.
Mr. Aggarwal goes on to submit that only a show-cause notice has been issued and therefore, this Court ought not to interfere at this stage in exercise of powers under Article 226 of the Constitution.
The division bench of Justices Rajiv Shakdher and Talwant Singh said that the record shows that the application of AAR was admitted as far back on August 7, 2015. Therefore, a large part of the problem, to say, has its genesis in the AAR not acting with due alacrity.
However, the court after having regard to the submissions of the parties, was of the view that, for the moment, the captioned writ petitions can be disposed of with the various directions.
Firstly, the concerned authority will adjudicate the impugned show cause notices qua which we are told that the petitioners have filed their replies.
Secondly, while carrying out the adjudication, the concerned authority will in the first instance determine as to whether or not the jurisdictional facts obtain in the matter i.e. whether the remittances in issue are chargeable to tax.
Thirdly, the concerned authority will, therefore, in the first instance pass an order on this aspect of the matter.
Fourthly, the concerned authority in this behalf will give personal hearing to the authorized representative of the petitioner, which will include the advocate engaged by the petitioner.
Fifthly, a speaking order will be passed and a copy of the same will be furnished to the petitioner.
Sixthly, the petitioner will have liberty to assail the same as per law by taking recourse to an appropriate remedy.
Seventhly, in case, the order passed is adverse to the interests of the petitioner, the same will not be given effect for four weeks, commencing from the date the said order is served on the petitioner. Lastly, in case, the concerned authority feels it is necessary to await the decision of the AAR in the matter concerning BT Plc, it will be free to take this aspect into account as well.
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