HC junks Vodafone plea against I-T demand

The Delhi High Court on Friday dismissed Vodafone's plea challenging a demand of over Rs 7.57 crore imposed on it by the Income Tax (IT) department for not deducting TDS (tax deducted at source) for the assessment year 2013-14 on discount given to distributors towards sale of recharge coupons.

A bench of Justices S Muralidhar and Najmi Waziri said, "Considering the quantum of the demand, the court is not inclined to interfere with the order."

"What is the difficulty in paying Rs 7.5 crore?" the court asked Vodafone and added that it was a small amount for the telecom major.

The company had challenged the June 29, 2016 order of the Commissioner of Income Tax (TDS) declining to interfere with the May 10, 2016 decision of the Additional Commissioner of IT (TDS) who had rejected Vodafone's plea for staying the demand of Rs 7,57,50,048 issued by the assessing officer on March 31, 2015.

The June 29 order had come on Vodafone's revision petition against the May 10 decision which too was challenged by the company.

Vodafone had contended it has deposited 78% coming to about Rs 33 crore of the total demand of Rs 43.56 crore for the financial years from 2006-07 to 2012-13 and thus, no coercive action be taken against it.

It had said it had contended before the IT department that no such demand can be raised where distributors have paid the taxes.

It had argued before the IT department that the deductor cannot be treated as an assessee-in-default till it was found that the recipient (distributors) had also failed to pay the taxes.