HC directed revenue to restrain from passing penalty order during pendency of ‘Uber’ appeal against TDS demand

HC directed revenue to restrain from passing penalty order during pendency of 'Uber' appeal against TDS demand

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HC directed revenue to restrain from passing penalty order during pendency of ‘Uber’ appeal against TDS demand

HC directed revenue to restrain from passing penalty order during pendency of ‘Uber’ appeal against TDS demand

[2019] 103 taxmann.com 336 (Bombay)

IT : Where on account of assessee’s failure to deduct tax at source, AO raised demand under section 201 and during pendency of appellate proceedings, he initiated penalty proceedings under section 271C, revenue was to be directed that so long as appeal was pending before Tribunal, revenue authorities should be restrained from passing any order imposing penalty on assessee under sections 271C and 206AA

Section 271C of the Income-tax Act, 1961 – Penalty – For failure to deduct tax at source (Pendency of appeal, effect of) – Assessment year 2018-19 – Assessee-company provided marketing and support services to one Uber B.V., a Dutch Company – Dispute between assessee and department related to question of deducting tax at source by assessee while making payments to Uber BV taxi drivers of fare after deducting commission – Assessing Officer held that assessee was required to deduct TDS which assessee had failed to do – He, therefore, raised demand in terms of section 201 – During pendency of appeal, assessee prayed for stay of principal tax demands – Tribunal passed interim order requiring assessee to deposit certain amounts pending appeal subject to which remaining tax would not be recovered – In meantime, Assessing Officer initiated penalty proceedings under section 271C – Assessee submitted that Assessing Officer had to be prevented from proceeding further with penalty proceedings to avoid multiplicty of legal proceedings – It was noted that in similar circumstances prevailing in earlier assessment years, Co-ordinate Bench of Tribunal had passed an order that so long as appeal was pending before Tribunal, revenue authorities should be restrained from passing any order imposing penalty on assessee under sections 271C and 206AA – Whether in absence of any change in circumstances, following aforesaid order of Co-ordinate Bench, Assessing Officer was to be directed not to pass final order of penalty till assessee’s appeals before Tribunal for earlier assessment years were disposed of – Held, yes

Uber India Systems (P.) Ltd.

 

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