The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT), Ahmedabad bench has held that the service tax demand cannot be based on the TDS/26AS Statement under the Income Tax Act, 1961.
The assessee, Forward Resources Pvt Ltd., has challenged the service tax demand contending that the Commissioner apart from other documents, also relied upon the TDS /26AS Statement. The said statement under provisions of the Income Tax Act, 1961 is an Annual Consolidated tax statement.
Holding that the demand for services tax is not sustainable on the basis of TDS /26AS statements, a bench of Mr. Ramesh Nair Member (Judicial), and Mr. Raju Member (Technical), has held that the income tax and service tax are two different/ separate and independent Acts and their provisions operating in two different fields.
“Therefore by relying on the 26AS /TDS Statement under the Service Tax Act, the demand of service tax cannot be made. We also find support from the decision of M/s Ved Security Vs. CCE, Rachi -III 2019(6) TMI 383 CESTAT, Kolkata wherein it was held that the value of taxable services cannot be arrived at merely on the basis of the TDS statements filed by the clients inasmuch as even if the payments are not made by the client, the expenditure is booked based on which the form 26AS is filed, which cannot be considered as the value of taxable services for the purpose of demand of Service tax,” the Tribunal said.
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