Calcutta High Court Directs CBDT To Dispose Of Representations Under Income Tax Act

Calcutta High Court Directs CBDT To Dispose Of Representations Under Income Tax Act

The Central Board of Direct Taxes could not justify before the court its inaction with regards to the representations made by the Petitioner

The Calcutta High Court directed the Central Board of Direct Taxes (CBDT) to dispose of representations regarding the difficulties faced by the Petitioner – Company due to the new provision of Section 194-O of the Income Tax Act, 1961

A single-judge court of Justice MD. Nizamuddin in the High Court of Calcutta dealt with this petition titled Mjunction Services Ltd & Anr v Union of India & Ors.

The Petitioner – Company being an e-commerce website was affected by the newly inserted provision of Section 194-O of the Income Tax Act, 1961 which casted an obligation on the Petitioner to deduct and deposit Tax Deducted At Source (TDS) on account of sale consideration received from e-commerce participant/customers/buyers. The Petitioner – Company submitted that they had made representations before the Respondent – Central Board of Direct Taxes about why they were not required to deduct tax and deposit the same u/S 194-O of the Act and to further declare the aforesaid provision as ultra vires and unconstitutional. However, the Respondent – Central Board of Direct Taxes did not dispose of the representations of the Petitioner – Company for redressal of its grievances in this regard.

The Respondent – Central Board of Direct Taxes could not justify its inaction with regards to the representations made by the Petitioner – Company.

The Court found the representations of the Petitioner – Company to be relevant as they highlighted several difficulties which the Petitioner was facing in complying with the aforesaid provision of Section 194-O of the Act.

Therefore, the Respondent – Central Board of Direct Taxes was directed to consider and dispose of the aforesaid representations of the Petitioner – Company and to not treat the Petitioner in default till the disposal of the representations.