TDS not applicable to Uber India on payments made to driver-partners: ITAT [Read Order]

The Mumbai Bench of Income Tax Appellate Tribunal (ITAT) has held that Tax Deducted at Source (TDS) would not be applicable to Uber India on payments made to the driver partners.

The assessee, Uber India Systems Pvt. Ltd, was in charge of managing the operations of Uber BV when it was established in India in 2013. Legal ownership of the software programme known as the Uber App belonged to Uber BV, a company that was established in the Netherlands. This smartphone app's core services included transportation, where a passenger would request a ride and a driver or vehicle owner would accept the request.

Additionally, the assessee was responsible for collecting fare payments from passengers, gathering commission, and paying drivers for rides. Using the Uber App, the entire order's process was completed.

A TDS verification survey was conducted to ascertain the TDS defaults. During the course of verification carried out and on the basis of subsequent examination conducted in respect of the assessee, substantial defaults in the deduction of tax at source within the meaning of Section 201(1)/201(1A) of the Income Tax Act, 1961 were noted and the assessee was treated as assessee in default for failure to deduct tax at source under Section 194C of the Income Tax Act, 1961.

Hiten Chande appeared on behalf of the assessee and Ankush Kapoor appeared on behalf of the revenue.

The Division Bench of Prashant Maharishi, (Accountant Member) and Sandeep Singh Karhail, (Judicial Member) dismissed the appeal filed by revenue referring to the decision in assessee’s own case Uber India Systems Private Ltd vs JCIT-TDS, which rendered similar findings in respect of payment made to driver partners on behalf of the Uber BV for the transportation services.

The Bench held that the assessee could not be treated as a "person responsible for paying‟ for the purpose of Section 194C read with Section 204 of the Income Tax Act, 1961 in respect of payment made to driver partners on behalf of the Uber BV for the transportation services. Accordingly, the coordinate bench held that the assessee could not be treated as an “assessee in default‟ under Section 201(1)/201 (1A) of the Income Tax Act.

To Read the full text of the Order CLICK HERE

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