The Income Tax Appellate Tribunal, (ITAT), Delhi, ‘D’ Bench, has, on Friday held that no TDS can be imposed upon the payments made to the agents of a foreign shipping company, dismissing an appeal filed by the revenue in this regard.
The aforesaid ruling was made by the tribunal when an appeal was preferred by the dept.against the order of the Commissioner Of Income Tax ( Appeals),(CIT(A)) – 30, New Delhi , pertaining to the assessment year 2012-13, on the ground that the CIT (A) ,has erred in holding the agents of Foreign Shipping Companies to whom payments were made by the assesse, to be covered by the provisions of section 172 read with Clause 5 of Circular No. 723 , making the assesse non liable for tax deduction on the same.
The contentions of the assesse that the provisions of section 194C of the Act do not apply to it, for the reason of it being covered by the provisions of section 172 read with Clause 5 of Circular No. 723, though not accepted by the Assessing Officer, (A.O), was well received by the CIT (A), and on the aggrieved appeal being filed by the revenue due to the same, the Tribunal observed as below, dismissing the revenue’s appeal:
“The aforementioned Circular clearly states that provisions of section 172 applies to payments made to agents of foreign shipping companies and therefore, provisions of section 194C of the Act do not apply. Since the aforementioned Circular has been followed by the ld. CIT(A), we do not find any reason to interfere with the findings of the ld. CIT(A).
In the result, the appeal of the Revenue in ITA No. 1006/DEL/2020 is dismissed.”
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