Facts of the Case

The petitioner, BT (India) Private Limited, filed multiple writ petitions challenging a common order dated 26.08.2021 and the issuance of show cause notices under Sections 201(1) and 201(1A) of the Income Tax Act, 1961.

The dispute arose following a survey conducted under Section 133A on 06.03.2019, wherein it was alleged that the petitioner made payments to non-residents (notably BT Plc, UK) without deduction of tax at source (TDS).

The petitioner contended that such payments were not chargeable to tax in India and hence no TDS obligation under Section 195 arose.

Earlier, the High Court (order dated 19.03.2021) had directed the tax authorities to first determine whether the remittances were chargeable to tax (jurisdictional fact) before proceeding under Section 201.

Issues Involved

  1. Whether payments made to a non-resident (BT Plc) were chargeable to tax in India.
  2. Whether failure to deduct TDS under Section 195 justified proceedings under Sections 201(1) and 201(1A).
  3. Whether the Assessing Officer complied with the High Court’s earlier directions regarding jurisdictional determination.
  4. Whether writ petitions were maintainable when alternative appellate remedies were available.

Petitioner’s Arguments

  • The impugned order failed to comply with the High Court’s earlier direction to first determine taxability of remittances.
  • Payments made to BT Plc were not taxable in India; hence no TDS liability arose under Section 195.
  • An application before the Authority for Advance Rulings (AAR) on taxability was already pending and should have been awaited.
  • The proceedings were barred by limitation.
  • The jurisdictional condition for invoking Section 201 was not satisfied.

Respondent’s Arguments

  • The impugned order was passed in compliance with the High Court’s earlier directions.
  • The petitioner has an effective alternative remedy by way of appeal and therefore writ jurisdiction should not be invoked.
  • Similar issues for earlier Assessment Years (2012–13 and 2013–14) were already under appeal before the CIT(A).
  • The petitioner cannot simultaneously agitate identical issues in multiple forums.

Court’s Findings / Order

  • The Court observed that the petitioner had already availed appellate remedies for similar issues in earlier assessment years.
  • It held that it would not be appropriate to entertain the writ petitions at this stage.
  • The Court granted liberty to the petitioner to challenge the final order through appropriate statutory remedies.
  • It clarified that no opinion was expressed on the merits of the case.
  • Result: Writ petitions dismissed with liberty to pursue alternate remedies.

Important Clarification

  • The Court emphasized the principle of alternate efficacious remedy, discouraging writ jurisdiction when statutory appeal mechanisms are available.
  • It reiterated that jurisdiction under Section 201 depends on prior determination of taxability, but declined to interfere at the current stage due to pending appellate remedies.

Relevant Sections Involved

  • Section 195 – TDS on payments to non-residents
  • Section 201(1) – Assessee in default
  • Section 201(1A) – Interest on failure to deduct TDS
  • Section 133A – Survey proceedings
  • Section 245Q – Application before Authority for Advance Rulings (AAR)

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2021:DHC:3132-DB/NAC30092021CW111212021_140037.pdf

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