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Whether Appellant was liable to deduct Tax at Source in terms of Section 194E of the Act in case ofpayments made to the Non- Resident Sports Associations?

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Sec. 115 BBA (1)(b) of Income Tax Act, 1961 – Non-resident – The ITO issued a notice to the Office of assessee asking it to show-cause why actions under Section 20(I)/194E of the I.T. Act, 1961 would not be taken against assessee for its failure to deduct taxes from the payments made by it in accordance with the provisions of Sec. 194E. The assessee represented before the ITO but the ITO did not agree with the contentions of assessee. Finally, the ITO passed an order under Sec. 20(I)/194E and held that the assessee was liable to pay under Sec.201(I) the amount it had failed to deduct from the payments under consideration and furthermore held that the assessee was also liable to pay interest on the said amount under Sec. 291(1A) from the date of tax was deductible upto the date of actual payment. The ITO computed the total short deduction u/s. 194E to be Rs. 2,18,293,00.00. ITAT set aside the order passed by the CIT(A) and restored the matter back to his file for re-deciding the issue. CIT(A) finally passed his appellate order which was challenged before ITAT decided the appeal of the assessee holding that:-should have deducted tax at source in respect of this portion of the payment made by it to that particular association and the order under Sec. 201 would be considered to be valid in respect of the payment to each such country in the above manner”. High Court affirmed the view taken by the Tribunal.
Supreme Court dismissed the appeal of the assessee holding that:–that the payments made to the Non-Resident Sports Associations in the present case represented their income which accrued or arose or was deemed to have accrued or arisen in India. Consequently, the Appellant was liable to deduct Tax at Source in terms of Section 194E of the Act –  PILCOM [2020] 271 TAXMAN 200 (SC)

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