A single judge bench of the Calcutta High court on hearing the writ petition filed by the Mjunction Services Ltd.directed the Central Board of Direct Taxes (CBDT) to consider and dispose the representation regarding section 194-O within six months.
The issues raised by the MSL’s were, according to Section 194-O of the Income Tax Act they are not required to deduct tax and deposit to the Government, since the sale of goods or provision of services does not take place and/or through the petitioner company platform and/or purchaser of the goods or recipients of the services does not make payment to the petitioner company or the sale of goods or provision of services.
When the petitioner’s client uses the software sold/licenses by it to them or procuring their requirement of goods and services and alternatively to declare the aforesaid provision as ultra vires and unconstitutional.
Petitioner is also aggrieved by inaction on the part of the CBDT and sitting over and not disposing the representations of the petitioner for redressal of its grievances in this regard, made under Section 194-O(4) of the Act.
Considering the submission of the parties, Justice Mohammed Nizamudin directed the CBDT to consider and dispose the matter within a period of six weeks from the date of communication of the order.
The court also held that the petitioner can’t skip from depositing TDS which it will receive from the e-commerce participants/customers/buyers. And also made it clear that CBDT shall not treat the petitioner in default till the disposal of the matter.
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