IN HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision : 18.9.2019 ITA No.409-2019 (O&M) Punjab Infrastructure Development Board Appellant Versus Commissioner of Income Tax-(TDS) Respondent ITA No.407-2019 (O&M) Punjab Infrastructure Development Board Appellant Versus Commissioner of Income Tax-(TDS) Respondent ITA No.413-2019 (O&M) Punjab Infrastructure Development Board Appellant Versus Commissioner of Income Tax-(TDS) ...... Respondent CORAM : HON'BLE MR.JUSTICE AJAY TEWARI : HON'BLE MR. JUSTICE HARNARESH SINGH GILL Present : Mr. Deepak Aggarwal, Advocate for appellant. 1 of 8 ITA No.409-2019 (O&M) 2 ITA No.407-2019 (O&M) ITA No.413-2019 (O&M) AJAY TEWARI, J. (Oral) 1. CM-19272-CII-2019 in ITA-409-2019 This is application for placing on record copy of judgment in ITA No. 73 of 2016 dated 20.12.2016 passed by this Court. For reasons recorded in application, same is allowed and abovesaid judgment is taken on record. 2. Main Cases This order shall dispose of abovesaid appeals since common question of facts and law are involved therein. For sake of convenience facts are taken from ITA No. 409 of 2019. 3. This appeal has been filed under Section 260A of Income Tax Act, 1961 against order dated 29.3.2019 of Income Tax Appellate Tribunal, Division Bench 'B' Chandigarh (ITAT) upholding order of Assessing Officer. 4. following question of law was framed by ITAT :- Whether assessee namely Punjab Infrastructure Development Board (hereinafter referred to as PIDB) was required to collect TCS (tax collect at source) as per provisions of Section 206 C (1C) of Income Tax Act, 1961. 5. Brief facts of case are that Punjab Legislature had passed Punjab Infrastructure (Development and Regulation), Act, 2002 (hereinafter referred to as 'the Act') and had constituted statutory Board called PIDB (the appellant-Board before us). Under powers granted to it, appellant-Board had entered into concession agreement with Concessionaires to develop different highways. 2 of 8 ::: Downloaded on - 28-09-2019 12:21:59 ::: ITA No.409-2019 (O&M) 3 ITA No.407-2019 (O&M) ITA No.413-2019 (O&M) Concessionaire was entitled to collect toll from vehicles entering that particular stretch of highways. Out of tolls collected, Concessionaire had to deposit fee. issue involved in present case is that Assessing Officer noticed that appellant-assessee had received certain amounts from contractor/concessionaire in entering into concession agreement, but being 'Person Responsible' (PR) it failed to collect TCS and held responsible under provisions of Section 206 C (1C) of Act. various authorities having held against it, appellant is before this Court. 6. Learned counsel has argued that bare perusal of various provisions of Act clearly reveal that appellant-Board is merely nodal agency as confirming party and agreement has been entered between Government of Punjab and Concessionaire and Board does not deal with Concessionaire on principle to principle basis but acts only as agent to Government. He has referred to following Section :- 20. Functions and Powers of Board (1) Subject to limitations specified in sub section (3), Board shall be apex body in State of Punjab for overall planning for development of infrastructure sectors and infrastructure projects. (2) Board shall:- (i) act as nodal agency to co-ordinate all efforts of State Government regarding development of infrastructure sectors, involving private participation and funding from sources other than those provided by State budget and will,- (a) identify infrastructure projects for private 3 of 8 ::: Downloaded on - 28-09-2019 12:21:59 ::: ITA No.409-2019 (O&M) 4 ITA No.407-2019 (O&M) ITA No.413-2019 (O&M) participation19; (b) promote competitiveness and progressively involve private participation while ensuring fair deal to consumers; (c) identify bottlenecks in infrastructure sectors and recommend to State Government, policy initiatives to rectify same; (d) select, prioritise and determine sequencing of infrastructure projects; (e) formulate clear and transparent policies related to infrastructure sectors so as to ensure that project risks are clearly identified and allocated between stakeholders; and (f) identify sectoral concessions to be offered to concessionaires to attract private participation and secure availability of viable infrastructure facilities to consumers; (ii) prepare internally or through external consultants or service providers engaged for purpose, all necessary documents including bid or tender documents, draft contracts including various contractual arrangements and incentives to be offered by State Government; (iii) create Fund to be known as Punjab Infrastructure Initiative Fund, which shall vest in Board to carry out pre- feasibility and feasibility studies and preparing of reports for proposed infrastructure projects, along with collection of relevant data. Punjab Infrastructure Initiative Fund will have contributions from Development Fund, budgetary resources of State Government, public bodies and multilateral lending agencies and financial institutions; (iv) assist public infrastructure agencies and concessionaires in obtaining statutory and other approvals; (v) recommend grant of concessions to public infrastructure agency in accordance with provisions of 4 of 8 ::: Downloaded on - 28-09-2019 12:21:59 ::: ITA No.409-2019 (O&M) 5 ITA No.407-2019 (O&M) ITA No.413-2019 (O&M) this Act, rules and regulations made there under; (vi) assist in determining level and structuring of investments of State Government and public bodies into infrastructure projects with private participation including holding investment or part thereof; (vii) create special purpose vehicles for implementing infrastructure projects in terms of section 38 in co- ordination with State Government or public infrastructure agencies; and (viii) manage and administer Development Fund and Punjab Infrastructure Initiative Fund. (3) Board shall not play any role in infrastructure projects undertaken by State Government exclusively through its budgetary provision (4) In order to carry out its functions consistent with provisions of this Act, Board shall have powers to do all or any of following, namely:- (i) acquire, hold, develop or construct such property, both movable and immovable, as Board may deem necessary for performance of any of its activities related to development of infrastructure sectors or infrastructure projects; (ii) advise or recommend to State Government acquisition of land under Land Acquisition Act, 1894 for purposes of infrastructure projects; (iii) lease, sell, exchange, or otherwise make allotments of property referred to in clause (i) to concessionaire and to modify or rescind allotments, including right and power to evict allottees concerned on breach of any of terms or conditions of such allotment; (iv) borrow and raise money in such manner as Board may think fit and to secure repayment of any money borrowed, raised or owing by mortgage, charge, standard security, lien or other security upon whole or any part of 5 of 8 ::: Downloaded on - 28-09-2019 12:21:59 ::: ITA No.409-2019 (O&M) 6 ITA No.407-2019 (O&M) ITA No.413-2019 (O&M) Board's property or assets (whether present or future), and also by similar mortgage, charge, standard security, lien or security to secure and guarantee performance by Board of any obligation or liability, it may have undertaken or which may become binding on it. (v) constitute Project Management Team and one or more Advisory Committee or Committees or Sectoral Sub- Committee or Project Implementation Sub-Committee, or engage suitable service providers or advisors or consultants to advise Board for efficient discharge of its functions; (vi) enter into and perform all such contracts as it may think necessary or expedient for performing any of its functions; and (vii) do such other things and perform such other acts as it may think necessary or expedient for proper conduct of its functions and for carrying into effect purposes of this Act. 7. In particular, learned counsel has emphasized on opening part of Sub Section 2 of Section 20 of Act (supra) wherein it has been mentioned that Board will act as nodal agency to co-ordinate all efforts of State Government regarding development of Infrastructure Sectors... It is his contention that this statutory stipulation as well as terms of concession agreement clearly lend themselves to this view. 8. In our opinion, these appeals must fail. Tribunal has noticed not only above quoted provisions of Section 20 of Act, but has also noticed provisions of Clause (i), (iii) and (iv) of Sub Section (4) of Section 20 of Act (supra) and has come to conclusion that despite stipulation in statute regarding Board as being nodal agency, subsequent provisions clearly reveal that appellant is 6 of 8 ::: Downloaded on - 28-09-2019 12:21:59 ::: ITA No.409-2019 (O&M) 7 ITA No.407-2019 (O&M) ITA No.413-2019 (O&M) acting on principle to principle basis and even contrary stipulation in concession agreement does not take away this essential characteristic. Moreover, if argument of learned counsel is to be accepted, then it would result in anomalous situation because as per Section 206 C (1C) of Act, any person who grants lease or licence is same person who collects concession fee. But as per case of appellant in present case, grantor is Government while concession fee is to be collected by appellant. Thus appellant can well foist liability on Government and Government can foist liability on appellant. This stipulation could result in leakage of tax. We find judgment of Tribunal to be well considered and confirm finding that mere usage of term 'nodal agency' or 'confirming party' would not determine facts of present case. It may be apposite to mention here that this possibility was envisaged by Division Bench of this Court adjudicating upon previous round of litigation pending between between parties in ITA No. 73 of 2016 decided on 20.12.2016 titled as Commissioner of Income Tax (TDS)-1 Chandigarh vs.M/s Punjab Infrastructure Dev. Board, Chandigarh. when it held as follows :- 7. If we answer questions of law in favour of assessee, entire matter ends there. If, however, we answer question in favour of Revenue, as we have, it would be necessary to remit matter to Tribunal to decide assessee's main contention that provisions of Section 194C are not applicable to case at all. We refrain from answering that question in this appeal as in our view, it ought to be decided by Tribunal in first 7 of 8 ITA No.409-2019 (O&M) 8 ITA No.407-2019 (O&M) ITA No.413-2019 (O&M) instance. There is possibility of questions of fact arising. For instance, it would be necessary to consider whether assessee was merely nodal agency for Government of Punjab or whether it was acting on its own on principle to principle basis with concessionaire. answer to this issue may not depend only upon terms of agreement. 9. In view of these circumstances, appeals stand dismissed. 10. Since main cases have been dismissed, pending CM, if any, also stands disposed of. (AJAY TEWARI) JUDGE (HARNARESH SINGH GILL) JUDGE 18.9.2019 anuradha Whether speaking/reasoned - Yes/No Whether reportable - Yes/No 8 of 8 Punjab Infrastructure Development Board v. Commissioner of Income-tax-(TDS)