DISTRIBUTORS INDIA (SOUTH) Vs. UNION OF INDIA

JUDGEMENT

(1.) Heard Shri Desh Deepak Chopra, Senior Advocate assisted by Sri. Shailesh Verma, Advocate, the learned counsel for the petitioner and Shri Manish Misra, Advocate, the learned counsel for the respondents.

(2.) By means of this writ petition filed under Article 226 of the Constitution of India, the petitioner has challenged the validity of a notice dtd. 26/3/2021 issued by the Income Tax Officer, Range-5, Ayakar Bhawan, 5, Ashok Marg, Lucknow under Sec. 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') proposing to assess/reassess the income/loss for the assessment year 2013-14.

(3.) The petitioner's case is that it is a registered partnership firm. It has entered into agreements with various Pharmaceutical and FMCG (Fast Moving Consumer Goods) Companies for providing Carrying and Forwarding Agents (C&F Agents) services. As per the terms of the agreements, the petitioner incurs various business expenses on behalf of the principal companies and while reimbursing the expenses, the principal companies deduct TDS. However, the reimbursement of expenses is not the petitioner's income and, therefore, it is not reflected in the petitioner's books of accounts as receipts from C&F business. Some of the companies have deducted TDS under different heads like Sec. 194 H of the Act that is meant for income from brokerage and commission and Sec. 194 J that is meant for fee for professional and technical services.