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The Tax Publishers Dy. CIT v. Air India Ltd. [ITA No. 1721/Mum/2015, dt. 29-4-2016] : 2016 TaxPub(DT) 2227 (Mum-Trib) TDS on Passenger service fee (PSF) and amounts held back by credit card companies *Facts:* Assessee airline had to collect and pay passenger service fee (PSF) to the Mumbai airport authority Ltd. and on sale of tickets through credit card the card companies withheld their fee and paid the balance to the assessee on which TDS was applied under section 194C. In a TDS scrutiny assessee was found to have not collected TDS on the said PSF and credit card fee was subject to TDS under section 194H. Thus was deemed to be in default under section 201/201(1A) and penalty under section 271C was also slapped. On appeal the Commissioner (Appeals) negated the assessing officers order. On further appeal: Held in favour of the assessee that no TDS is warranted on PSF and on the credit card payments. The Credit card fee was akin to bank charges so no TDS is warranted on the same. Penalty proceedings quashed. Similar case was dealt in Flash mailer 93 DCIT v. Jet Airways (India) Limited/ITA No.4348/Mum/2014/assessment year 2011-12/ITAT Mumbai/Dated 29-2-2016

The Tax Publishers

Dy. CIT v. Air India Ltd. [ITA No. 1721/Mum/2015, dt. 29-4-2016] : 2016 TaxPub(DT) 2227 (Mum-Trib)

TDS on Passenger service fee (PSF) and amounts held back by credit card companies

Facts:

Assessee airline had to collect and pay passenger service fee (PSF) to the Mumbai airport authority Ltd. and on sale of tickets through credit card the card companies withheld their fee and paid the balance to the assessee on which TDS was applied under section 194C. In a TDS scrutiny assessee was found to have not collected TDS on the said PSF and credit card fee was subject to TDS under section 194H. Thus was deemed to be in default under section 201/201(1A) and penalty under section 271C was also slapped. On appeal the Commissioner (Appeals) negated the assessing officers order. On further appeal:

Held in favour of the assessee that no TDS is warranted on PSF and on the credit card payments. The Credit card fee was akin to bank charges so no TDS is warranted on the same. Penalty proceedings quashed.

Similar case was dealt in Flash mailer 93 DCIT v. Jet Airways (India) Limited/ITA No.4348/Mum/2014/assessment year 2011-12/ITAT Mumbai/Dated 29-2-2016